Fractional Ownership in Real Estate
Table of Content
Fractional Ownership in Real Estate is the emerging real estate investment in India being overseen by Real Estate Regulatory Authority (RERA), and SEBI for fair property selling and buying process and enhancing management of portfolio of shares in real estate. Let’s Explore more about it and make strategic real estate investments with MoneyTree Realty.
Fractional Ownership in Real Estate - Overview
According to the reports published by JLL India, the market of Fractional Ownership in Real Estate is estimated to touch $5 billion by 2030 in market share and increase by tenth-fold of current valuation of around $500 million. Fractional Ownership in Real Estate is the emerging real estate investment in India backed-up by Real Estate Regulatory Authority (RERA), and SEBI for fair property selling and buying process and enhanced management of portfolio of shares in real estate.
Fractional Ownership in Real Estate is a cost-effective property investment that allows you to buy and manage property in shares under the Demat Account. Let’s understand fractional ownership in real estate and get better insights for a strategic investment.
What is Fractional Ownership in Real Estate?
Fractional Ownership in Real Estate refers to buying property for sale in shares under the share ownership model in which multiple individuals collectively own a part of a high-end property and earn a part of its rental yields and ROI. With fractional ownership in real estate, you can purchase a high-end commercial or residential in partnerships of other real estate investors on its price appreciation.
Traditionally you would be required to make an upfront payment while making a real estate investment and tends to have higher risk of loss but with fractional ownership in real estate, backed by RERA and SEBI, you can buy property at much lower rates along with minimal chances of low returns in future.
How Fractional Ownership in Real Estate works?
Fractional Ownership in Real Estate would work under the rules and regulations of Real Estate Regulatory Authority (RERA) and Securities and Exchange Board of India (SEBI), making it a secured and promising investment. The Catalyst Trusteeship Limited would be acting as the trustee of SEBI and would for property valuations, rental expenses, division of property shares, and maintaining the same on Demat Account.
SEBI’s Role in Fractional Ownership in Real Estate
Security and Exchange Board of India was established in 1992 and is responsible for managing and overseeing securities and investments in India. The fractional ownership in real estate would be under the scrutiny of SEBI and the authority is responsible to draft rules and regulation much like it did for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).
RERA’s Role in Fractional Ownership in Real Estate
The RERA Act was passed by the Parliament of India and mandates all the real estate projects to be registered with the authority and bear a unique RERA registration number while marketing and selling of property for sale. The standardised rules and regulation laid out in the Act would also be applicable to fractional ownership in real estate.
Read More: RERA Act 2016
Advantages of Fractional Ownership in Real Estate
Fractional Ownership in Real Estate features an array of advantages over traditional real estate investment. Let’s explore more about advantages of fractional ownership in real estate:
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Affordability of High-end Commercial and Residential Properties: With fractional ownership in real estate, real estate professionals can buy properties in partnership with others and thus making buying real estate more affordable and accessible. It would consequently help investors to diversify their portfolio of properties and get a steady source of passive income.
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Lower Financial Risks: Fractional ownership in real estate exhibits lower risk of loss and shields people from making a financial blunder. This would prompt more to step into the real estate industry of India and make a steady source of wealth creation.
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Promising Price Appreciation and ROI: Fractional ownership in real estate allows multiple people to buy property for sale from leading real estate developers in India that provides best-in-class commercial properties and residential properties. Buying high-end property would lead to a drastic increase in capital appreciation and ROI over time.
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Professional Real Estate Business: Fractional ownership in real estate is being regulated by RERA and SEBI and ensures transparent and efficient property buying and selling experience. Along with it, there are various professional property management companies that handle the daily operations of the property that include maintenance, tenants expenses and management.
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Transparent and Legal Procedures: Real estate investments with fractional ownership are processed under standardised rules and regulation in the RERA Act 2016 and in scrutiny of government agencies like Securities and Exchange Board of India (SEBI).
Fractional Ownership Vs. Traditional Real Estate Investment
Fractional ownership in real estate is the new-age way of buying and selling commercial and residential properties in India under the scrutiny of SEBI and RERA.
In the table below, we compare fractional ownership vs traditional real estate investment:
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Investment Cap |
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Fractional Ownership in Real Estate |
Requires lower capital investment and provides shared ownership |
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Traditional Real Estate Investment |
Requires higher capital investment and provides complete ownership |
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Returns and Risks |
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Fractional Ownership in Real Estate |
Provides shared appreciation and depreciation on capital and returns |
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Traditional Real Estate Investment |
Solo owner of property have to bear capital appreciation and depreciation |
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Property Liquidity |
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Fractional Ownership in Real Estate |
Property shares in fractional ownership are easier to sell and buy hence more liquidity. |
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Traditional Real Estate Investment |
Selling and buying of whole property takes time and hence less liquidity. |
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Returns and Risks |
|
|
Fractional Ownership in Real Estate |
Provides shared appreciation and depreciation on capital and returns |
|
Traditional Real Estate Investment |
Solo owner of property have to bear capital appreciation and depreciation |
Role of FOIC, MoneyTree Realty and Axis Ecorp in Fractional Ownership in Real Estate
MoneyTree Realty in partnership with Axis Ecorp has launched Fractional Ownership Investment Community and currently offering 200 property shares in suites located in North Goa. The commercial property, Axis Blues, is being developed by the leading real estate developer in India - Axis Ecorp. FOIC in North Goa offers strategic real estate investment at ₹15.96 lacs along with assured returns of 8% per annum.
Axis Ecorp
Axis Ecorp is a trusted real estate developer in Goa and offers various luxurious real estate projects such as Axis Blues, Axis Yog Villas, Axis Lake City, Axis KNCZ, AND Axis Lake City Plaza.Axis Blues offers luxury suites in North Goa available as property shares and features strategic fractional ownership in real estate with assured returns on investment and regula rental yields.
MoneyTree Realty
MoneyTree Realty is the leading channel partner in real estate and helps you make strategic real estate investment in commercial property, residential property, and plots for sale. Our real estate consultants provide insights into market trends and help you with a comprehensive property analysis that makes the best real estate property consultant in India. MoneyTree Realty has collaborated with Axis Ecorp and offers fractional ownership in real estate in the city of Goa. Currently there are just 200 property shares available with an investment at ₹15.96 lacs*.
FOIC
FOIC stands for Fractional Ownership Investment Community. It is collaborative work between MoneyTree Realty and Axis Ecorp to sell property shares in real estate at and prompting more people to buy property for sale at lower upfront payment and shared capital appreciation and rental yields in prime location of North Goa.
Future of Fractional Ownership in Real Estate
Fractional Ownership in Real Estate is the coming-of-age real estate investment opportunity that requires less investment cap with multiple people owning shares of a commercial or residential property.
Here, we list out the prospects of future of fractional ownership in real estate:
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It will prompt more people to invest in real estate due to substantial investment cap and shared appreciation and depreciation.
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It will help real estate investors to diversify their portfolio of commercial and residential properties and gain a high rate of investments.
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Various emerging cryptocurrency, blockchains, and NFTs, would be quite beneficial as the demand for fractional ownership in real estate would surge.
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The fractional ownership in real estate would be regulated and monitored by SEBI and RERA and the rules and regulation would be updated regularly to meet its traction and make real estate business in property shares more easier, accessible, safe, and secured.
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The younger generation would have the emerging stake in fractional ownership in real estate due to low-cost entry investment, and wide use of digital platforms.
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Fractional ownership in real estate would allow people to buy high-end properties with reduced risks and assuring high returns and competitive rental yields.
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It would expand the ever-growing real estate industry in India and make it a prominent choice for wealth creation.
Buy Property for Sale, Now!
Are you looking to buy an apartment near Yamuna Expressway, or a house for sale near upcoming Noida International Airport, or a commercial property for sale with competitive rental yields?
If yes, look no further. The professional real estate consultants at MoneyTree Realty help you make strategic real estate investments and grow your asset portfolio with property for sale from leading real estate developers. Our real estate consultants help you buy property for sale that features high capital appreciation and ROI, along with premium and luxury living.
FAQs on Fractional Ownership in Real Estate
What kind of investments does Fractional Ownership cover?
One can invest through the SPV in an under-construction, ready, or rented property that owns the property. The income, expenses, and profits from the property are shared by multiple fractional owners, managed by the Custodian and the Asset Manager, who runs the SPV on a daily basis for an annual fee.
Who is able to invest in Fractional Ownership?
Any resident or non-resident Indian with an INR denominated bank account and proper KYC can invest in fractional ownership by investing in the SPV (i.e., by owning the Equity Shares and the CCDs of the SPV). NRIs can invest in the SPVs through their NRE / NRO accounts. However, coupon payable, the yields payable, and any other amounts payable to the NRIs by the SPVs will have to be paid to the bank account of the NRIs in India and can be repatriated outside of India as per applicable laws.
What is the minimum investment in Fractional Ownership?
The minimum investment can vary based on the specific investment opportunity and could be INR 15 lacs – INR 50 lacs. In some cases, investors may have the option to pay the investment amount in tranches as well.
How are earnings, profits & losses allocated in Fractional Ownership?
All income, expenses, and profits of the SPV will be shared amongst the share convertible debenture holders of the SPV, in proportion to their holding in the SPV.
What are the fees for the Investors in Fractional Ownership?
There are various models of fees in Fractional Ownership. The fees vary depending on the specific investments.
How long does one need to stay invested in Fractional Ownership?
The typical cycle of investment in real estate is 6-8 years to unlock its real value. Fractional Ownership is no different.
