Welcome to Fractional Ownership!
Fractional ownership is a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, usually a piece of resort real estate. It can be done for strictly monetary reasons, but typically there is some amount of personal access involved. One of the main motivators for a fractional purchase is the ability to share the costs of maintaining an asset that will not be used full-time by one owner.
Fractional investment or ownership is believed to be one of the wisest investment models to indulge in as there is a small investment involved and the returns are really high comparatively.
Fractional Ownership - Commercial Real Estate
The Indian real estate industry is poised for robust growth in 2023. Between 2023 and 2028, the Compound & Annual Growth (CAGR) for the Indian real estate sector is expected to reach 9.2%. However, while commercial real estate (CRE) can be a highly lucrative way to generate passive income and build wealth, it can also be a difficult industry to break into. Screening and doing due diligence on properties, managing tenants, and dealing with maintenance issues are just a few of the many challenges that real estate investors face. Additionally, the high cost of buying a pre-leased commercial property outright can be a significant barrier.
For individuals who want to start small or diversify their investment portfolio, fractional real estate investing can be an attractive option. Fractional real estate investing allows investors to start small, gain experience, and mitigate some of the key risks associated with real estate, while still benefiting from the real estate market growth.
Key Benefits of Fractional Ownership in Real Estate
- Access to high-value properties
Investing in a single property by yourself limits access to Grade A commercial property, which in turn limits rental income potential. Compared to this, fractional investment opens access to the same premium commercial properties with much greater income potential. Thus, fractional ownership provides access to high-yield real estate alternative assets previously only accessible to High-Income Individuals (HNIs) or institutions due to their connections and capital availability.
- Diversification
Diversification through a new asset class helps mitigate risks and strengthen your investment portfolio.
- Lower investment size
The amount required to start investing is much smaller than traditional real estate investment. Investments on The Restack platform starts at INR 10 Lakhs.
- Passive income
Earn steady income through rent from fractional ownership or interest on debentures (NCDs). Since the responsibility of maintenance is on the platform, the investor does not have to worry about day-to-day management of the property.
- Flexibility
The Restack ensures flexibility for investors. Unlike traditional real estate investment that requires complete ownership, fractions are easier to buy and sell. This means that investors can exit after a specific period of time, without the hassle of selling a whole property.
- Minimal effort:
Since platform experts take care of vetting, screening, and property management, investing in fractional real estate takes very little effort for the investor.
