Partial Ownership of Real Estate, Partial Investment, Millennials, Generation X, Commercial Real Estate, Capital Gains, PropTech PlatformsThe ownership pattern in the commercial real estate sector has evolved significantly over the years.

Written by Varun Mohan, founder of Definite

The majority of members of Generation X (born between 1965 and 1980) were from middle-class families, who had to struggle hard to earn a living. They started by fulfilling their family responsibilities, saving for their children’s education, and ended up buying an apartment property to make their children live a rent-free life. But this made them confined to the residential markets only, which helped them to own a home.

The next generation, i.e. millennials (born in 1980 and 1996) who are well educated and have lived at home, are considering investing in real estate when they reach or exceed their 30s. However, the huge down payments and the huge amount that is paid into EMIs can take years of their lives. Even after owning a piece of property, they will be charged for property maintenance and other taxes. In practice, it also seems difficult for millennials to invest in a commercial property they have been eyeing for years due to the high ticket price.

However, what if they could own a small portion of their dream real estate that could be rented out to a verified MNC tenant and generate good cash flow?

The ownership pattern in the commercial real estate sector has evolved significantly over the years. Just like timeshare and owning a fraction of an expensive stake, fractional ownership has rebranded the real estate sector built on traditional grounds and emerged as a new way to invest for millennials.

Understanding Fractional Ownership in CRE

Fractional ownership – which is gradually gaining popularity in India – is poised to reduce the financial burden on a single investor or property owner. The concept simply refers to a group in which a group of like-minded people own a commercial property together and become part-owners. This approach to simply purchasing an asset splits the exorbitant cost into multiple parts, allowing millennials to participate in new opportunities at a fraction of the previously required cost.

What is a fractional investment in real estate and how is it different from REIT investments?

For example, an excellent commercial building leased to the tenant can cost Rs 50 crore to the owner/investor. A working professional with an investment of Rs 25 lakh can fulfill his dream of buying this property through fractional ownership and earn similar benefits such as high return in the range of 8-12 per cent, while the asset management is taken care of by an internationally reputable agency and is carried out All activities with the help of technology and artificial intelligence at a click of a button.

Traditionally, investing in the real estate investment sector has been the choice of wealthy and experienced investors. However, with the entry of new PropTech platforms, millennials can come together to buy an asset, enjoy the return, sell their part (whenever necessary), and even enjoy capital gains at exit time.

PropTech – Enable Partial Ownership

Millennials belong to a visually driven generation that has seen the world evolve to become digitally driven. They are tech savvy and always thrive on wealth creation methods. In the midst of the digital transformation of every business sector, technology has also changed the way millennials access CRE.

PropTech’s state-of-the-art platforms have advanced to enable fractional ownership by providing easy access, transparency, and asset management solutions to fractional owners. To be industry trusted, PropTech is backed by industry experts with expertise in CRE and proprietary methodologies. Furthermore, it focuses on the diligent investment structuring process to protect the interests of micro-owners.

PropTech’s fractional ownership has shown tremendous results in securing investments tailored to the needs of investors. In addition, the most reliable of them take advantage of the technology’s potential to diversify investors’ portfolio across different asset classes and locations. Apart from this, it facilitates the process of managing tax deductions for the investors which eliminates the tedious and time consuming tasks on the part of the owners.

away

With so many opportunities to invest in the market, millennials are highly planning to invest in tangible assets instead of intangible assets like stocks, fixed deposits, etc.

Get live stock quotes from BSE, NSE, US market and latest NAV, mutual fund portfolio, see the latest underwriting news, best IPOs, calculate tax by income tax calculator, see top market gainers, biggest losers and best stock funds. like us Facebook social networking site and follow us Twitter.

Financial Express is now available on Telegram. Click here to join our channel And stay up-to-date with the latest Biz news and updates.

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *