For many middle-class investors, purchasing a property outright is regarded as the ultimate investment achievement. However, investing in a typical property may not always result in the best financial returns. Fractional ownership of premium real estate is a smarter option because it combines higher profits, diversified risk, and the prestige of co-owning high-value assets.
This blog compares the advantages of fractional ownership in premium homes versus outright ownership of lower-tier properties, demonstrating why it is time to look beyond traditional real estate investments.
Drawbacks of Owning an Average Property
1. Lower Rental Yields:
- Properties in less desirable areas may struggle to recruit tenants or offer competitive rental prices.
- Rental income may only cover maintenance and loan payback costs, limiting your profits.
2. Slower Appreciation - Properties in non-premium locations tend to appreciate slower than those in high-demand areas.
3. High Maintenance Costs - Owning a home involves continuing costs such as repairs, taxes, and utilities, which can reduce profits.
4. Lack of Diversification - Investing just in a single property leaves you vulnerable to market-specific hazards, such as economic downturns or local oversupply.
The Advantages of Fractional Ownership in Premium Real Estate
1. Affordable Access to High-Value Properties:
- With fractional ownership, you may co-own premium assets like office premises in large areas or luxury villas in holiday spots for as low as ₹1-2 lakhs. This avoids the need for significant capital commitments.
2. Higher Rental Yields:
- Premium properties in prime locations often have higher rental revenue due to high demand from businesses and affluent tenants.
- Fractional ownership assures that you receive proportional rental returns on these high-yield assets.
3. Higher Appreciation Potential:
- Properties in established or quickly rising locations typically increase faster, enhancing the value of fractional shares.
4. Diversification Opportunities:
- Spread your investments among several properties, such as commercial office spaces, retail stores, and residential flats, to reduce risk.
5. Hassle-free Management:
- Platforms such as ASSATZ manage property upkeep, tenant acquisition, and compliance, saving you time and effort.
6. Liquidity and Flexibility:
- Selling fractional shares on secondary markets provides liquidity, unlike outright property ownership.
Real-Life Comparison: Fractional and Full Ownership
- Case Study: Rajesh's Investment Decisions
- Scenario: Rajesh planned to invest ₹20 lakhs in real estate.
- Option 1: Buy a complete residential property in a suburban area with a low rental market.
The outcome:
- Rental income: ₹10,000/month (₹1.2 lakhs/year). Total rental income over 5 years: ₹6 lakhs.
- Annual property appreciation rate: 4%. The total property value after 5 years is ₹24.33 lakhs.
- The total return after 5 years is ₹30.33 lakhs, which includes rent and appreciation.
Option 2: Invest 5 lakhs in fractional shares of four premium properties, such as office premises in Mumbai, a retail shop in Bangalore, a serviced flat in Goa and a co-working space in Dubai.
The outcome:
- Rental income: ₹20,000 per month (₹2.4 lakhs per year). Total rental income over 5 years: ₹12 lakhs.
- Annual property appreciation rate: 8%. After 5 years, the total property worth is ₹29.38 lakh.
- After 5 years, the total return is ₹41.38 lakhs, including rent and appreciation.
Key Benefits of Fractional Ownership
- Shared Risk, Shared Rewards - Your investment is distributed across numerous properties, decreasing reliance on a single asset's performance.
- Premium Locations, Premium Returns - High-value homes in metro cities or worldwide destinations typically yield higher returns than average properties in suburban locations.
- Scalability - Begin with a single fractional investment and reinvest returns to create a diverse portfolio over time.
- Ease of Exit - Compared to selling a full property, fractional shares can be sold swiftly and readily on secondary markets.
Why Fractional Ownership Is Best for Middle-Class Investors
- Accessibility: Invest in premium properties without requiring significant funds.
- Affordability: Begin with tiny investments and gradually increase your portfolio size.
- Professional Management: Platforms such as ASSATZ handle the intricacies, resulting in a flawless experience.
- Transparency: Blockchain-based ownership ensures secure and transparent transactions.
Why Should I Choose ASSATZ for Fractional Ownership?
ASSATZ is a reliable platform for middle-class investors who want to maximise their returns through fractional ownership:
- Curated Properties: Gain access to high-yield commercial, residential, and international real estate opportunities.
- Affordable Investments: Start with ₹1 lakh.
- Hands-Free Management: With expert property management, you can invest without hassle.
- Transparent Systems: Blockchain technology provides safe ownership.
- Growth Potential: Premium homes can generate both rental income and capital appreciation.
Conclusion: Think Beyond Average and Invest in Premium
Owning a stake in premium real estate is a wiser and more rewarding decision than settling for an average home. Fractional ownership provides high rental yields, better appreciation, and diversified risk, all while requiring less capital and work.
Are you ready to start investing in luxury real estate?
Visit www.assatz.in to learn about fractional ownership opportunities and take the first step towards wiser real estate investing today.
Own a share in luxury properties through ASSATZ and uncover the potential of high-value real estate investments. Let's create wealth together!