The fractional ownership of Real Estate in the hospitality and tourism sector is a profitable and good investment. A combination of innovation and technological advancement has given birth to the idea of fractional asset investing. The main idea behind Fractional investment is quite simple; instead of purchasing an entire property, sports collectible, work of art, or share, investors buy a portion of it. With fractional ownership, your share of the property in the hospitality and tourism sector rises as the value of the asset rises. Compared to Traditional Real Estate, the whole ownership comes at very low risk and management cost.
Investment in Traditional Real estate has a very unorganized secondary buying market. The buyer often purchases the property from the Agent and not directly from the owners. Sometimes, there will be more than one agent involved which adds up to the total deal price. This will make the make Traditional Real estate property tough to sell. However, in the case of fractional ownership in the hospitality and tourism sector, a seller has a community of co-owners. This allows sellers to directly sell their share to them hassle-free as well as conveniently. There are numerous advantages to fractional ownership in the hospitality and tourism sector.
For instance, a 1crore property in the tourism sector will be out of reach for average investors. But fractional ownership can allow them to get the property they want in the most desirable location at the price they can afford. Besides, the investors in fractional ownership need not have to worry about the home upkeep and maintenance. Over the past few years, there has been a rise in the fractional ownerships in the tourism sector of Kerala.
Fractional ownership makes long-term ownership a more realistic possibility by sharing the ownership. By owning a home or real estate property in the hospitality and tourism sector through fractional ownership, owners need not worry about the maintenance of the home. The owners need not worry about the essential activities such as turning on the AC and heater, using amenities like the hot tub and pool, opening or closing windows and doors, running the water. Fractional ownership offers an opportunity to identify issues early on and preserve the long-term value of the home. This provides peace of mind to the fractional owners. Rather than a single point of failure Fractional owners essentially have a group that checks on the home, schedules maintenance, shares accountability, and divides the work and chores.
In fractional ownership of real estate property in the hospitality and tourism sector, there will be sharing of the burden of homeownership. Fractional ownership helps to solve the money problem. Fractional investments in the real estate and tourism sector are more affordable than stocks. Fractional investments remove much of the legwork as well as bureaucracy from the equation. Investors simply purchase the desired portion of the property by signing necessary documents and watch as the rental income arrives in their account each month. Fractional ownership of property in the tourism sectormakes portfolio diversification easier. As fractional investments provide you with access to assets that you would not normally have access to, you can effectively expand your portfolio beyond bonds or stocks with minimal effort and at an affordable price. Such an investment is in the real estate and tourism sector offers a rare combination of low risk as well as high returns.
Apart from that, this type of investment makes the lucrative returns of commercial realty easily available to the average retail investor. Moreover, fractional investments in the real estate and tourism sector allow such investors to create an alternate source of income flow. Further, by making fractional investments, the owners get an opportunity to create diversity in their investment portfolio. Often tenants of residential properties in fractional investments usually keep vacating the property regularly. This is an important beneficial aspect of fractional ownership. In normal property ownership, there is a loss of rental income during the period when a new tenant is being searched. The lease of commercial properties or fractional investments in the real estate and tourism sector is generally for three years and longer. This offers consistency of rental income.