Fractional ownership involves multiple investors pooling their funds to buy shares in a property through a Special Purpose Vehicle (SPV). This SPV acquires the property, and investors earn returns proportionate to their share of ownership. The property could be anything from a commercial property to a residential estate. This investment avenue allows you to earn income from real estate without the hefty upfront costs of sole ownership, thereby making it accessible to retail investors.
Let us go through this blog to understand how you can earn passive income using fractional ownership.
What Are the Different Types of Commercial Real Estate?
The following mentions the different types of commercial real estate via which you can earn passive income:
i. Office Buildings
Office buildings fall into 2 main types: urban and suburban. Urban office buildings are usually found in cities and include high-rise properties and skyscrapers. Suburban office buildings are generally smaller and often situated in office parks.
ii. Retail Spaces
Retail spaces are commercial areas where retailers and restaurants operate. These can be multi-tenant buildings, often anchored by a major tenant to attract traffic or single-use, standalone buildings.
iii. Industrial Properties
Industrial properties vary widely based on their purpose and size. They can be used for storage or as workplaces for various businesses. Generally, these properties are found in low-rise buildings in urban areas or industrial parks. Warehouses, cold storage, research facilities and showrooms are some types of industrial properties.
iv. Hospitality Properties
Hospitality properties offer significant investment potential. These properties serve travellers, providing temporary or short-term accommodations, lodging, entertainment and dining. Hospitality properties include boutique hotels, resorts, short-term rentals and more.
How to Earn Passive Income from Fractional Ownership?
There are various ways to earn passive income, but one of the easiest ways to do so is through a fractional ownership real estate investment platform. Follow the steps mentioned below to start your investment:
Step 1: Determine whether you want to invest in commercial or residential property.
Step 2: After deciding, research properly and select a platform that offers fractional ownership investment opportunities by looking at their past records, regulatory compliance, and more.
Step 3: Explore the different opportunities offered and evaluate the details like the value of the property, available shares, price per share, tenant profile, tenancy terms, rental yield, the platform’s credibility, and more.
Step 4: Complete your KYC process, sign the EOI (Expression of Interest), and deposit 5-10% of your investment amount in the Escrow account. It will help in securing your slot in the investment opportunity.
Step 5: Once your investment opportunity reaches full commitment, you will have to pay the remaining 95-90% of your investment during the drawdown period. After this, sign the private placement and offer documents.Now you will be able to track your investment on the dashboard of the platform and enjoy the monthly returns as one of the benefits.
Now you will be able to track your investment on the dashboard of the platform and enjoy the monthly returns as one of the benefits.
Is Fractional Real Estate Ownership a Good Investment?
Fractional ownership is considered a reliable investment for the following reasons:
- It eliminates the barriers related to real estate investment, like capital risk and the high capital requirement.
- Fractional ownership allows you to participate in real estate investment, earn high returns, and get the benefits of the rising property value of A-grade commercial or residential real estate.
- It allows you to invest in new asset classes and helps you diversify your investment portfolio.
The Bottom Line
Earning passive income using fractional ownership is a smart investment choice. With this approach, you can access high-value commercial properties, enjoy consistent rental returns, and diversify your investment portfolio without hefty upfront costs. It is a great way to grow your wealth while minimising risks associated with traditional real estate investments.
Thus, if you want to avail this opportunity, consider Aurum WiseX as your fractional ownership guide. With our investment platform, you can earn monthly rentals of up to 10% and earn gains from capital appreciation.
Note: All information and/or data from external sources is believed to be accurate as of the date of publication. Note: All information and/or data from external sources is believed to be accurate as of the date of publication.
