OTHER GROUP COMPANIES
market

Fractional Ownership: A lucrative real estate business

Fractional ownership has emerged as a key source of real estate earning for India’s middle class people. Earlier, this business was essentially small-scale where people formed groups of relatives or friends to make a collective real estate investment.

June 29, 2015 9:10 IST | India Infoline News Service
That real estate business is meant for the rich has been reduced to a flawed notion in our times. Fractional ownership has emerged as a key source of real estate earning for India’s middle class people. Earlier, this business was essentially small-scale where people formed groups of relatives or friends to make a collective real estate investment.
 
Fractional ownership is now an organized market. There are companies, acting as investment platforms, encouraging the general public to invest in properties as joint investors. If the number of investors is less than seven, the arrangement is called as co-ownership. Else, a Special Purpose Vehicle is formed. Every investor becomes a shareholder holding stake corresponding to the amount invested. Commercial real estate being riskier than residential, fractional ownership is found more in the latter segment.
 
Fractional ownership demands limited liability and a minimal investment– as low as five lacs – hence an ideal source of capital appreciation for the middle class. Besides, there’s also the ‘let out’ option that could generate substantial rental income. Exiting the business is easy; the investor can either sell his/her stake or wait for the property sale. Corporatization of this business has ushered in a sense of professionalism and the general public can avail of expert help, whether in grasping business terms, carrying out documentation or exploring attractive opportunities.

OPEN A DEMAT ACCOUNT & Get
FREE Benefits Worth 5,000

FEATURED ARTICLE

BLOGS

Open Demat Account

  • 0

    Per Order for ETF & Mutual Funds Brokerage

  • 20

    Per Order for Delivery, Intraday, F&O, Currency & Commodity