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A Beginner’s Guide to investing in fractional ownership in India

investing in fractional

What are some of the best options to invest your hard-earned money in? Most of the experts would suggest real estate alongside other options such as FD, PPF etc. The Real Estate sector is booming in India right now and is expected to hit US$ 1 Bn by 2030. The industry is expected to be 13% of the GDP of India. With the addition of around 200 million sq. ft. in 2019, the total stock of this industry is expected to hit an all-time high of 3.7 trillion sq. ft. Hence, this is an ideal situation to get high returns from the market. And now, with the ascent of fractional ownership in India, those who are willing to own a piece of premium property, but don’t have enough capital accumulated, can also put their money in the sector.

What is Fractional Ownership?

Fractional ownership is a model in which multiple people interested in a specific property come to form a group and own a specific property. For example, if a commercial property is worth 10 Crore and ten people are interested in the property, then they can come together and share the cost as per their need and ability, which as a result, translates into divided costs for each of them. Once all the owners have completed their transaction, and it has been recognized, the whole process of having fractional ownership is complete. 

A principal custodian of the property is decided mutually. The primary custodian represents all the co-owners. Each co-owner is issued a fractional ownership certificate once the property is registered. The advantage of the whole system is that the costs of maintenance, repair and other bills are split amongst the owners. The model has been particularly successful in America, and it is getting a stronghold in Europe. According to the statistics available, the number of fractional ownership in residential property has been increased from 60 to 90 in 2008-09, and there shall be substantial growth in the industry in the next five years. 

The Indian Scenario and the merits it brings

Fractional ownership is in an embryonic stage in India right now. But there are several pros for going with it here. Fractional ownership makes it easier to buy premium properties, which otherwise wouldn’t have been possible. Apart from this, the ownership of the property can be sold or transferred. If the owner doesn’t want to continue with the property, he can sell it to another interested party. Also, the fractional ownership means that the liability is also shared amongst the co-owners. 

One of its most unique features is the secure yield. If the team managing the fractional ownership property is efficient, it will always choose a property that has a good annual rental yield capacity and capital appreciation potential.

Why choose hBits ?

Now when it comes to fractional ownership in India, there are very few companies. hBits is one of them. The company has Grade A Commercial Assets with a stock that exceeds 500 million sq ft. spread across India. The assets are situated in top commercial buildings and IT parks. Built by high-quality developers, the properties are occupied by Grade A tenants and have a rental yield and potential appreciation rate of 12-20%. Here are the few advantages of choosing hBits: 

  • Cashflow: Securing your cash flow in a real estate business is of utmost importance. The case is not that simple as it seems. It is not that you have injected some money into the market and can watch it grow. hBits makes this thing much easier. It deals in Grade A commercial assets having good quality tenants, which are usually companies with sterling credit ratings. It also helps you to secure rental payments by leave and license agreements. On top of all these, you will also be exempted from bearing the cost of fit-outs of premises as the property is already developed and rented out.
  • Capital Appreciation of the property: Through their micro-market selection and supply-demand dynamics, hBits make sure that you own a property that has a potential hike of almost 15% in three years when it comes to contractual agreement. The ownership is hard asset ownership. So you have better protection than other asset classes. 
  • Hassle-Free ownership: All the deals that hBits do include turnkey management, maintenance of property and collection of rent by the expert and experienced team of hBits. It lessens the problems of the customer. 

Fractional ownership with hBits’ innovative platform and its strategic opportunities would certainly yield great profits for the customers. The sector is very fresh and hence has a lot of potential.

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