Discover how fractional ownership in real estate allows you to co-own premium properties at a fraction of the cost. Learn how it works, its benefits, and why it’s growing in India.
Fractional ownership in real estate is a mechanism through which expensive properties can be jointly owned by two or more persons, sharing both costs and benefits. In fractional ownership, a group of investors, instead of one individual buying the entire property, will buy shares of the property, usually in shares of 1/8 or 1/10, and co-own the property. The concept tries to give many people entrance into selective real estate such as luxury villas, holiday homes, or commercial spaces which they might not be able to afford.
Each shareholding co-owner has a legal semblance in the property, and the rights and benefits are proportional to the shares. These rights and benefits may include some periods of usage (vacation homes), rental income from the rentals (investment properties) and receipt of proceeds on the sale of the property. Usually, a professional organization will be charged with managing the setup, handling maintenance, bookings, income distribution, and scheduling of usage.
Possibly the biggest advantage of fractional ownership is affordability. Accessibility to real estate investment becomes less weighed upon when investments can be diversified. You would be allowed to invest in parts of multiple properties in different locations instead of carrying all your money and placing it in one. Another benefit is that you receive passive income while enjoying capital appreciation and avoiding the day-to-day running of the property Read More Here.
In India, fractional ownership is getting trendy in holiday locations like Goa, Vengurla, and the Konkan region.
As more platforms are birthed to facilitate and manage, the model is indeed becoming a very clever and cost-effective option for potential investors in real estate and lifestyle buyers.
