Capital, A Challenge When Buying Commercial Real Estate: Here’s How Fractional Ownership Solves This
The recent shift in the lifestyle of people after the pandemic has taught us that every conventional form of operation can be altered as per requirements. What it means is that, before the pandemic, most of the community was actively and passively making key decisions about their lives outside the cyber bubble or the internet. But, this is not relevant today as most of the activities can take place online.
Similarly, investments and alternative investments have seen a change in the past couple of years. More and more people are being attracted to investment opportunities and alternative investments, which seems to be a general trend in the developing countries of the world. The stock market, which is the lifeline of external investments, was badly affected due to the pandemic.
This made real estate investment one of the most trending options among new as well as old investors. Most people across the world are probably drawn much closer to alternative investment options such as commercial real estate. Therefore, we’re going to talk about one of the most important necessities for an individual to invest in real estate, which is capital.
We’ll also cover the concept of fractional ownership and how it solves the difficulty faced by investors due to the high magnitude of required capital.
What is fractional ownership?
Real estate investments are usually accompanied by the fact that they need a large amount of capital. But, what most of the new investors out there don’t know is that the concept of fractional ownership is something that can solve all difficulties for the required capital. Also, this concept helps those investors who wish to diversify their investment portfolio.
Is Fractional Ownership solving the problem of capital challenges?
With fractional ownership, any keen investor can invest in alternative investments like real estate without the need to purchase all of the inventory that is being sold. The name itself suggests that potential investors can invest or purchase a fraction of the actual property that is being offered. This is one of the best ways to get your hands on those highly profitable investment options for which the purchase of the whole asset is not possible. It also reduces risk in many ways, for both the investor and the owner of the asset.
Through this, the problem of fractional ownership is solved as the shortage in capital demand cannot be the deal breaker for an interested investor.
The future of fractional ownership in the Indian commercial real estate sector:
“Investing in commercial real estate is getting more popular as a result of increased uncertainty in the stock market and lower yields on bonds and fixed deposits.” Retail investors may now invest lesser sums in India’s burgeoning commercial real estate industry thanks to fractional ownership, allowing them to diversify their income. “The future of fractional investing is bright and sustainable, and as a result, retail investors have hopped on board to ride the surge of safe and stable returns, as well as to broaden their investment portfolio,” adds Mohit Goel, CEO of Omaxe Ltd.
Many industry experts and analysts say that fractional ownership is the next big thing in the commercial real estate industry. This concept is gaining tremendous popularity in the developing countries of the world as more and more people are being attracted to the idea of having a share of wealth in the key economic hubs. It has reduced the challenges that people face while looking for their dream alternative investment option.
Ashish Bhutani, the MD of Bhutani Infra, says that people can now purchase a fraction of a luxury office space that was originally worth 90 crores. Moreover, they can become one of the rightful owners of that property and get returns of as much as 3% of their initial investment, let’s say 10 lakhs. It will be very profitable for them to get even a small amount of 30,000 and be happy to see it grow ever after!
“Fractional ownership ensures an increasing rate of return in the form of rental income and capital gain.” Over the previous five years, commercial property in India has expanded at an annual compounded growth rate (CAGR) of 16%. If you invest in a respected real estate business, you may expect an increase in rental returns in addition to capital growth. This increase is integrated into the lease agreement to safeguard your alternative investments from future inflation and maintain them consistently over time, “says Sagar Saxena.
This is great, isn’t it?
If you’re looking for an alternative investment platform that will help you to make alternative investments in lucrative assets around the country, then Assetmonk is the right choice for you. This platform has everything you need to give boost to your income through a variety of diverse assets. Speaking of fractional ownership, you need not worry!
Assetmonk has the feature of fractional ownership, which will let you be the owner of impressive properties around the major economic hubs of the country. Sign up now and enjoy the benefits of having your portfolio of real estate investments.