Active income is on. All is well!
But is that enough?
We prefer a good life even while we’re working and hence can require passive income.
Sure, we would love passive income with the hope our investment returns to work for us. Some savings give us only interest as returns while some give both, returns and capital appreciation.
We could save in Equities, mutual funds, fixed deposits, ETF’s, REIT, real estate, and so on. Investing is a necessity. Today, with online applications (APPS) one can do a KYC and start investing almost immediately. One needs to beat inflation but also, we need to understand our risk appetite.
The idea is to maximise interest earnings on our investment. Typically, ROI (Return on investment) on Fixed deposit is 5% odd and little more for senior citizens in India. Landlords earn a typical 2% odd on their residential investments as returns and on commercial typically over 5% and rely on capital appreciation on their investment in Real Estate.
Investing in a commercial space gives a better ROI. Fractional real estate investing is what allows many investors to come together to fund such commercial property investments.
What does Fractional Investment and Ownership mean in Real estate?
Fractional ownership in real estate investing is essentially purchasing a portion of an investment property. A group of like-minded investors pool their money together, allowing them to invest in higher-value properties. This allows all stakeholders to share ownership of high value assets without having to pay for the whole investment themselves.
This is for Commercial Real Estate investors. The low cost of investing (around 25 Lakhs INR) and high return has made it one of the best investment options.
ADVANTAGES of Fractional Real Estate Investment or Fractional Ownership?
- Passive income
- Easy diversification of assets
- Low Capital Investing
- Invest in fractions of premium pre-leased commercial properties & earn a monthly Rental yield & build Long-term wealth.
- Long-term Capital Appreciation
- Stable Asset Class
- Ease from managing the asset
- You could have a diversified portfolio
Difference between REIT’s and Fractional Ownership
Real Estate Investment Trust (REIT), is a company that owns, operates, or finances income-producing real estate. REITs often trade on major exchanges like other securities and provide investors with a liquid stake in real estate.
In REIT, we don’t own the commercial property but enjoy the dividends. We can’t put the commercial property for sale.
On the other hand, investors are co-owners in the commercial property as Fractional Owners. Fractional Ownership is a percentage ownership in the commercial property share be it an office space, showrooms in a mall or Warehousing spaces.
For further information, do contact us!
Jyotesh Narang
Managing Partner
Life Inspiration Advisory LLP
Disclaimer: The views expressed in this blog are of the author. Kindly conduct your due-diligence or seek advice from your advisor before investing.
