Many companies in the tourism industry are now unlocking fractional ownership in private as well as residential real estate sectors. It brings to the investors the opportunity to own exclusive luxury vacations as well as residential assets. The fractional ownership model enables like-minded people to become the owner of world-class premium assets and tourism properties at a fraction of its cost. In the arrangement of Fractional Ownership, a group of people shares the costs and use of a property. Besides, each fractional owner will own a percentage or share of the property.
The fractional ownership model provides the investors with several benefits such as Unique Usage Rights, Easy Exchange, Easy Exit or Liquidation, High Rental Yields, and easy Property Management. Moreover, there is no restriction on gifting, selling, and transferring the property. The fractional owners get full freedom of selling their property at their desirable value after the lock-in period. Also, fractional owners can gift it to their family or relatives. Transfer of these properties can also be made via inheritance or self-made transactions by the owner.
Fractional real estate ownership in the hospitality and tourism sector is a method of purchasing an ownership interest of a property with others so costs can be shared with the partners. The Fractional ownership model is most often seen in condo or resort communities. Each owner will be holding an equal part of the real estate title while reducing liability toward taxes and maintenance. The traditional timeshare often limits access to the property to one to two weeks per year. However, fractional ownership allows access to the property for four weeks or more per year, depending on the number of owners.
Profitable investment in the hospitality and tourism sector needs proportionate capital. Further, to earn a proportionate capital the investor needs a profitable investment. The fractional investment in the hospitality and tourism sector is often compared favorably with the other forms of investments like fixed deposits, corporate bonds, and gold, and yet are considered safe and produce a sizable profit. For about the last couple of decades, the concept of fractional ownership has been evolving worldwide. This evolution in fractional ownership has opened the gates for small investments.
This newer way of investing in the high-yielding real-estate sector in the hospitality and tourism sector offers the investors several benefits compared to other forms of investments. In India, fractional ownership is already popular and is bulking further with each day. Fractional ownership in the hospitality and tourism sector is an established market. Besides, anyone with solid mettle and knowledge in the real estate industry knows the importance of it. Initially, investors should identify high-yielding tourism properties based on industry-specific criteria. This involves researching the performance of the property and rigorously performing due diligence about the property. One should also analyze the cash-flows and market scenarios related to the property before purchasing it. It is important to invest wisely and carefully in a
property and then partially own it via a trusting platform. To diversify their ownership, people should ideally invest in multiple properties. This will further drop down the risk of investment. One can earn either through reselling the property they own with a profit margin or through monthly rentals from the property. Fractional investors should consistently lookout for better opportunities to scale their investments. Nowadays, it is very easy to buy, track, identify, and scale investments through several online platforms.
Fractional properties such as Luxury Villas, Holiday Homes, and Studio apartments represent lucrative investment opportunities only if the investors know how to access them. Today, fractional properties in the hospitality and tourism sector offer a plethora of choices as they come in many types and sizes. The rental yields from fractional properties are three times higher when compared to the residential assets. One generally cannot access fractional properties as an individual as these properties are usually maintained and managed by professionals. The fractional investment allows flexibility in one’s investment choices. The investors hold the legal title of the property based on his payment history even after selling them. The fractional investment enables investors to receive a return proportionate to the increase in the value of their property by selling their shares at any point during the investment. In this new age of investment, the model of fractional ownership brings in a sustainable change in the tourism and hospitality sector. This concept drives property developers to build more quality properties. Apart from that, fractional investment motivated mediators to sell and earn money in more manageable and transparent platforms. Fractional ownership is a profitable and less risky form of investment for investors.
