16 Aug, 2022
IMPORTANCE OF FRACTIONAL OWNERSHIP
The fractional ownership of Real Estate is a profitable and good investment. A combination of innovation and technological advancement has given birth to the idea of fractional asset investment. The main idea behind Fractional investment is quite simple; instead of purchasing an entire property, investors buy a portion of it. With fractional ownership, your share of the property rises as the value of the asset rises. Compared to Traditional Real Estate, the fractional ownership comes at very low risk and management cost.
Investment in traditional real estate has a very unorganized secondary buying market. The buyer often purchases the property from the agent, not directly from the owners.
Sometimes, there are more than one agent involved which adds up to the total deal price. This makes the real estate property tough to buy. However, in the case of fractional ownership a seller has a community of co-owners. This allows sellers to directly sell their share to them with hassle-free as well as conveniently. There are numerous advantages to fractional ownership in the hospitality and tourism sector.
For instance, a 1 crore property in the tourism sector will be out of reach for average investors. But fractional ownership allows them to get the property they want in the most desirable location at the price they can afford. Besides, the investors in fractional ownership need not to worry about the home upkeep and maintenance.
Fractional ownership makes long-term ownership a more realistic possibility by sharing the ownership. By owning a home or real estate property in the hospitality and tourism sector through fractional ownership, owners need not to worry about the maintenance of the home and other essential activities. Fractional ownership offers an opportunity to identify issues early and preserve the long-term value of the home. This provides peace of mind to the fractional owners. Rather than a single point of failure Fractional owners essentially have a group that checks on the home, schedules maintenance, shares accountability, and divides the work and chores.
Basically, investors purchase the desired property by signing necessary documents and enjoys the appreciation either in form of rental or IRR.
