Gud Story
  • Home
  • Business
    • All
    • Automotive
    • Crypto
    • Education
    • Entrepreneurs
    • Finance
    • Healthcare
    • Industries
    • Insurance
    • Investment
    • Legal
    • Retail
    • Share Market
    • Startup
    Purpose of a Bar Dispenser

    What is The Purpose of a Bar Dispenser?

    Digital Transformation for Your Business

    2023 is The Year To Make The Digital Transformation for Your Business

    Professional Coaching

    Professional Coaching: Everything You Need To Know

    Personal Injury Lawyers

    What are Personal Injury Lawyers? Do I need them?

    CPVC Pipe

    Why CPVC Pipe is The Best Piping Material and Its Benefits, Types & Applications

    individual retirement account (IRA)

    Some Facts About Bullion and Precious Metals IRAs

    Trending Tags

    • Decor
      • All
      • Design Ideas
      • Events
      • Furniture
      • Gardening
      • Home Repair
      • Housekeeping
      • HVAC Control System
      • Kitchen
      • Painting
      • Pest Control
      Pendant Lights

      Adding Style and Functionality to Your Home with Pendant Lights: A Guide to Choosing and Using Pendant Lights

      CPVC Pipe

      Why CPVC Pipe is The Best Piping Material and Its Benefits, Types & Applications

      Wedding Day Tips

      Great Wedding Day Tips to Set Your Special Day Apart

      Grow and Care Money Tree 

      Easy Steps to Grow and Care Money Tree 

      Domestic and Commercial Cleaning

      The Difference Between Domestic and Commercial Cleaning

      Driveway Paving

      Driveway Paving: How Much Does it Cost to Pave a Driveway?

      Trending Tags

      • Lifestyle
        • All
        • Beauty
        • Culture
        • Drink
        • Fashion
        • Food
        • Hair Care
        • Health
        • Jewellery
        • Make up
        • Parenting
        • Shopping
        • Skin Care
        • Travel
        Things To Do in Las Vegas

        Top 8 Things To Do in Las Vegas at Night

        Hill Country ranches

        4 Picturesque Qualities of Ranches in Hill Country

        Organic Essential Oils

        Why are Organic Essential Oils Better?

        Remove Splinters Under Nail

        Wonderful Ways to Remove Splinters Under Nail

        Express Sympathy

        How to Express Sympathy When Someone Dies

        Camping Gear

        Camping Gear: What To & What Not to Include? 

        Trending Tags

        • Sports
          • All
          • Basketball
          • College Football
          • Cricket
          • Formula 1
          • MLB
          • NBA
          • NCAA
          • NFL
          • NHL
          • WWE
          Improve Yourself As A Cricket Player

          5 Tips To Improve Yourself As A Cricket Player!

          Increase Shooting Percentage

          Increase Shooting Percentage with These Tips

          Best Players in The IPL History

          Top 5 Best Players in The IPL History So Far

          Cricket World Cup 2023

          Information About Cricket World Cup 2023

          Fantasy Cricket Game

          How does Fantasy Cricket Game Unite Fans All Over The World?

          3 Biggest Disappointments from The 2022/23 NFL Season

          Who Were The Three Biggest Disappointments from The 2022/23 NFL Season?

          Trending Tags

          • Gaming
            • All
            • Apex Legends
            • Call of Duty
            • Esports
            • FIFA
            • Fortnite
            • Genshin Impact
            • GTA
            • Guides & Tips
            • League of Legends
            • Overwatch
            • Pokemon
            • Valorant
            Panda Master Casino

            Panda Master Casino: Top 4 Games to Try

            Stylized Game Art

            Reasons Why Mobile Game Developers Should Use Stylized Game Art

            Battlefront 2 Crossplay

            Get To Know Is Battlefront 2 Crossplay?

            Mobile Casino

            ベラジョンカジノ Mobile Casino – The Future of Online Gaming

            Gambling Affiliation on 1xBet

            A Profitable Gambling Affiliation on 1xBet Awaits You

            how to get free roblox gift cards

            What is The Roblox Gift Code, and How to Obtain It?

            Trending Tags

            • Tech
              • All
              • Apps
              • Blockchain
              • Digital Marketing
              • Gadgets
              • How To
              • Mobile
              • NFT
              • PC & Mobile
              • Science
              • Solar Energy
              • Work Life
              Webtoon App Down

              Webtoon App Down: Having Issues? How to Fix Easily?

              Shopify App Store Optimization

              Latest Updates for Shopify App Store Optimization: Complete Guide

              Refurbished Phone

              Why It is Safe To Buy A Refurbished Phone and You Should Get One

              Identify a Toxic Work Environment

              9 Warning Signs to Identify a Toxic Work Environment Before Taking a Job

              IOT and Blockchain

              IOT and Blockchain | The Next Hot Technology?

              IoT App Development

              How Does The Retail Sector Benefit from IoT App Development?

              Trending Tags

              • Entertainment
                • All
                • Anime
                • Biography
                • History
                • Quotes
                • TV & Movies
                Randi B

                Be Who You are To Inspire More People with Randi B

                Robyn Dixon

                Juan Dixon And Robyn Dixon Remarried Legally?

                Ben Grosskopf

                Ben Grosskopf Is Affected By Cancer: Know What Happened

                Winchester House

                Winchester House: True Story of The Real Haunted House Explained

                Sam Smith

                Singer Sam Smith Says That He Was Banned From All Dating Apps

                Special Teacher Turned Adult Entertainer

                Courtney Tillia: A Special Teacher Turned Adult Entertainer

                Trending Tags

                No Result
                View All Result
                Gud Story
                • Home
                • Business
                  • All
                  • Automotive
                  • Crypto
                  • Education
                  • Entrepreneurs
                  • Finance
                  • Healthcare
                  • Industries
                  • Insurance
                  • Investment
                  • Legal
                  • Retail
                  • Share Market
                  • Startup
                  Purpose of a Bar Dispenser

                  What is The Purpose of a Bar Dispenser?

                  Digital Transformation for Your Business

                  2023 is The Year To Make The Digital Transformation for Your Business

                  Professional Coaching

                  Professional Coaching: Everything You Need To Know

                  Personal Injury Lawyers

                  What are Personal Injury Lawyers? Do I need them?

                  CPVC Pipe

                  Why CPVC Pipe is The Best Piping Material and Its Benefits, Types & Applications

                  individual retirement account (IRA)

                  Some Facts About Bullion and Precious Metals IRAs

                  Trending Tags

                  • Decor
                    • All
                    • Design Ideas
                    • Events
                    • Furniture
                    • Gardening
                    • Home Repair
                    • Housekeeping
                    • HVAC Control System
                    • Kitchen
                    • Painting
                    • Pest Control
                    Pendant Lights

                    Adding Style and Functionality to Your Home with Pendant Lights: A Guide to Choosing and Using Pendant Lights

                    CPVC Pipe

                    Why CPVC Pipe is The Best Piping Material and Its Benefits, Types & Applications

                    Wedding Day Tips

                    Great Wedding Day Tips to Set Your Special Day Apart

                    Grow and Care Money Tree 

                    Easy Steps to Grow and Care Money Tree 

                    Domestic and Commercial Cleaning

                    The Difference Between Domestic and Commercial Cleaning

                    Driveway Paving

                    Driveway Paving: How Much Does it Cost to Pave a Driveway?

                    Trending Tags

                    • Lifestyle
                      • All
                      • Beauty
                      • Culture
                      • Drink
                      • Fashion
                      • Food
                      • Hair Care
                      • Health
                      • Jewellery
                      • Make up
                      • Parenting
                      • Shopping
                      • Skin Care
                      • Travel
                      Things To Do in Las Vegas

                      Top 8 Things To Do in Las Vegas at Night

                      Hill Country ranches

                      4 Picturesque Qualities of Ranches in Hill Country

                      Organic Essential Oils

                      Why are Organic Essential Oils Better?

                      Remove Splinters Under Nail

                      Wonderful Ways to Remove Splinters Under Nail

                      Express Sympathy

                      How to Express Sympathy When Someone Dies

                      Camping Gear

                      Camping Gear: What To & What Not to Include? 

                      Trending Tags

                      • Sports
                        • All
                        • Basketball
                        • College Football
                        • Cricket
                        • Formula 1
                        • MLB
                        • NBA
                        • NCAA
                        • NFL
                        • NHL
                        • WWE
                        Improve Yourself As A Cricket Player

                        5 Tips To Improve Yourself As A Cricket Player!

                        Increase Shooting Percentage

                        Increase Shooting Percentage with These Tips

                        Best Players in The IPL History

                        Top 5 Best Players in The IPL History So Far

                        Cricket World Cup 2023

                        Information About Cricket World Cup 2023

                        Fantasy Cricket Game

                        How does Fantasy Cricket Game Unite Fans All Over The World?

                        3 Biggest Disappointments from The 2022/23 NFL Season

                        Who Were The Three Biggest Disappointments from The 2022/23 NFL Season?

                        Trending Tags

                        • Gaming
                          • All
                          • Apex Legends
                          • Call of Duty
                          • Esports
                          • FIFA
                          • Fortnite
                          • Genshin Impact
                          • GTA
                          • Guides & Tips
                          • League of Legends
                          • Overwatch
                          • Pokemon
                          • Valorant
                          Panda Master Casino

                          Panda Master Casino: Top 4 Games to Try

                          Stylized Game Art

                          Reasons Why Mobile Game Developers Should Use Stylized Game Art

                          Battlefront 2 Crossplay

                          Get To Know Is Battlefront 2 Crossplay?

                          Mobile Casino

                          ベラジョンカジノ Mobile Casino – The Future of Online Gaming

                          Gambling Affiliation on 1xBet

                          A Profitable Gambling Affiliation on 1xBet Awaits You

                          how to get free roblox gift cards

                          What is The Roblox Gift Code, and How to Obtain It?

                          Trending Tags

                          • Tech
                            • All
                            • Apps
                            • Blockchain
                            • Digital Marketing
                            • Gadgets
                            • How To
                            • Mobile
                            • NFT
                            • PC & Mobile
                            • Science
                            • Solar Energy
                            • Work Life
                            Webtoon App Down

                            Webtoon App Down: Having Issues? How to Fix Easily?

                            Shopify App Store Optimization

                            Latest Updates for Shopify App Store Optimization: Complete Guide

                            Refurbished Phone

                            Why It is Safe To Buy A Refurbished Phone and You Should Get One

                            Identify a Toxic Work Environment

                            9 Warning Signs to Identify a Toxic Work Environment Before Taking a Job

                            IOT and Blockchain

                            IOT and Blockchain | The Next Hot Technology?

                            IoT App Development

                            How Does The Retail Sector Benefit from IoT App Development?

                            Trending Tags

                            • Entertainment
                              • All
                              • Anime
                              • Biography
                              • History
                              • Quotes
                              • TV & Movies
                              Randi B

                              Be Who You are To Inspire More People with Randi B

                              Robyn Dixon

                              Juan Dixon And Robyn Dixon Remarried Legally?

                              Ben Grosskopf

                              Ben Grosskopf Is Affected By Cancer: Know What Happened

                              Winchester House

                              Winchester House: True Story of The Real Haunted House Explained

                              Sam Smith

                              Singer Sam Smith Says That He Was Banned From All Dating Apps

                              Special Teacher Turned Adult Entertainer

                              Courtney Tillia: A Special Teacher Turned Adult Entertainer

                              Trending Tags

                              No Result
                              View All Result
                              Gud Story
                              No Result
                              View All Result
                              Home Real Estate Commercial Real Estate

                              6 Ways NRIs can Benefit from Fractional Ownership of Commercial Real Estate in India

                              Neetika Mahawar by Neetika Mahawar
                              September 17, 2022
                              in Commercial Real Estate, Investment
                              Reading Time: 9 mins read
                              0
                              Fractional Ownership
                              Share on FacebookShare on Twitter

                              Individual investors with a minimum investment of Rs. 25 lakh can purchase a piece of Grade-A commercial real estate. Yes, anyone may now purchase a piece of Grade-A commercial real estate in major cities and industrial hubs, including opulent office buildings, enormous warehouses, and glamorous towers. Individual investors in India can gain partial ownership of real assets with a minimum investment of Rs. 25 lakh under the idea of fractional ownership of property.

                              In India, any resident or NRI (Non-Resident Indian) can own commercial property. To invest in industrial real estate in India, NRIs must hold an NRO (Non-Resident Ordinary) account. NRIs who wish to invest in commercial real estate in India or have any questions about the subject can immediately book a conversation with an NRI investment specialist.

                              Table of Contents

                              • What is fractional ownership, and how does it work?
                              • What is fractional ownership and how does it work?
                              • Why should non-resident Indians (NRIs) participate in CRE fractional ownership?
                                • 1. Affordability
                                • 2. Asset with a Lower Volatility
                                • 3. Tenants who have stayed for a long time
                                • 4. Rental Profit
                                • 5. High Liquidity
                                • 6. Diversification of a portfolio
                              • Who is eligible to participate in CRE via fractional ownership?
                              • Implications for taxes
                              • Are laws in place to safeguard the interests of investors?
                              • How to Get Out
                              • Is fractional ownership the same as investing in the stock market?
                              • Types of  usage of fractional ownership
                                • A. Using a pay-to-use model
                                • B. Methodology for assigning use

                              What is fractional ownership, and how does it work?

                              A business concept where a real estate asset is divided into pieces and groups of investors pool funds to acquire a property is known as fractional ownership. They all have passive ownership of a high-value asset in common. This structure lowers the cost of owning a piece of ‘Grade-A’ commercial real estate in major cities and industrial centers for an individual investor. 

                              All investors share income and expenditures in accordance with their participation in the asset.

                              What is fractional ownership and how does it work?

                              Typically, ‘Grade-A’ commercial buildings with tenants are advertised for investment on web platforms. For a home valued roughly Rs. 50 crore, an investor can start donating as little as Rs. 25 lakh. A Specific Purpose Vehicle is used to implement fractional ownership for each commercial property (SPV). 

                              ADVERTISEMENT

                              The funds pooled from each investor are directed through the SPV’s trusteeship business or limited liability partnership (LLP). The SPV buys the property, and each fractional owner receives shares in the SPV that owns the property in accordance with his or her contribution to the property.

                              The SPV’s sole purpose is to hold the property for the consumers. On behalf of the consumers, the investment platform is in charge of the SPV and the underlying property. An SPV is used to transfer ownership to fractional owners. Investors must execute SPV agreements in order to be registered with the Ministry of Corporate Affairs’ Registrar of Companies (RoC). The investors receive a copy of all paperwork, including the lease/rental agreement, property sale deed, and SPV agreement copy.

                              You can invest in fractional ownership with the help of online platforms such as Assetmonk. Assetmonk specializes in commercial real estate investments and is India’s fastest-growing wealth-tech platform. Assetmonk, which serves clients from all around the world, uses fractional ownership to offer high-quality investment alternatives at reasonable prices. 

                              NRIs can easily have access to grade-A assets without having to wait for long periods of time. To better understand investor goals such as capital appreciation, passive income and risk reduction, Assetmonk offers investing options based on risk appetites.

                              Also read: What is the Best Real Estate Database Software?

                              Why should non-resident Indians (NRIs) participate in CRE fractional ownership?

                              CRE fractional ownership

                              1. Affordability

                              In Hyderabad, a high-quality office property for sale costs Rs 300 crore. In the vast majority of cases, such an asset is exclusively available to HNWIs. However, with fractional ownership, one can now become a co-owner of a property for as little as Rs 10 lakh and earn a rental ranging from 6% to 10% each year. An investment like this generates a rental income of Rs 60,000-Rs 1 lac per year.

                              2. Asset with a Lower Volatility

                              The real estate business slowed during the global shutdown, but it quickly recovered in Q3. As a consequence, you may count on passive revenue. Year over year, net CRE absorption climbed by 63 percent. Furthermore, the number of new completions rose to 59 percent. Covid-19 caused a decline in the value of real estate across the world.

                              Commercial renting, on the other hand, has expanded as a result of India’s extensive outsourcing activity. Over 63 percent of office space rented in India is used by international companies. It should signal to Indian and non-resident Indian investors that now is the moment to invest in fractional real estate.

                              Commercial property values are expected to skyrocket in the coming years. As a result, it is a great moment to buy fractional ownership.

                              3. Tenants who have stayed for a long time

                              Tenants in residences tend to leave on a frequent basis, resulting in a loss of rental revenue until a replacement tenant can be found quickly. The lease period for a commercial property is three years. The lease can, however, be extended. It just ensures that you have a consistent income. Fractional ownership offers investor safety in this way.

                              Large multinational corporations, banks, and information technology companies with large budgets are among the tenants of high-end homes. They are always on time with their rent payments. Furthermore, because of the time, effort, and money spent turning the apartments into offices, such tenants frequently extend their rental agreements.

                              4. Rental Profit

                              Rental money is deposited directly into the account each month. Unlike savings accounts, you must wait for the investment to mature before reaping the benefits. Fractional ownership of commercial properties offers a high return on investment due to ongoing rental income and appreciation.

                              Commercial property investment in India had expanded at a CAGR of 16 percent over the previous five years. Aside from the value increase, you may expect a 15% increase in rent returns over the following three years if you buy with a respectable fractional ownership company. It’s included into the lease for future inflation protection, ensuring that your investments stay consistent over time.

                              5. High Liquidity

                              Commercial properties are a scarce resource because it is a hard asset. Its value rises over time, giving investors a steady stream of income, long-term growth, and portfolio diversification. Around 75-90 percent of the total office space in India is leased as a result of the rising demand for rental office space.

                              Commercial real estate is a stable and predictable investment since its returns do not fluctuate with the market. Furthermore, according to experts, fractional ownership investments are not locked in, and investors can exit at any time.

                              6. Diversification of a portfolio

                              Fractional ownership allows investors to pick and choose whatever properties they want to invest in. You may increase your safety by diversifying your portfolio by acquiring properties in a variety of locations and industries.

                              Who is eligible to participate in CRE via fractional ownership?

                              Any Indian citizen, even non-resident Indians, can invest in commercial real estate in India if they produce acceptable KYC paperwork. NRIs can use their NRO accounts to invest. Return on investment (ROI) from commercial real estate.

                              Commercial real estate offers relatively better returns than other stable investment options. Commercial property rental yields vary from 8% to 10%, i.e. Rs. 2 lakh to Rs. 2.5 lakh per year for a Rs. 25 lakh investment, with an IRR (internal rate of return) of 16 to 20% after five years.

                              The CRE is not a way to make rapid money. Investors should commit funds with a long-term horizon of at least 3-5 years in mind.

                              Implications for taxes

                              This asset class is not subject to any special rules. Rent collected from a CRE property is taxed like income from other sources under the corresponding tax slab under the present income tax system. Sections 24 and 80C of the Income Tax Act allow for tax deductions on home loans used to purchase real estate. NRI investors may profit from the Double Taxation Avoidance Agreement (DTAA) that they have signed with their current residency nation.

                              Are laws in place to safeguard the interests of investors?

                              Fractional ownership as a business strategy in commercial real estate is a relatively recent notion. The trusteeship company/LLP through which the SPV works, on the other hand, is governed by the Ministry of Corporate Affairs’ Registrar of Companies (RoC). The Real Estate Regulatory Authority must provide a license to the investment site where these services are offered (RERA).

                              How to Get Out

                              The policy on lock-in and departure differs for every investing site. Some portals have a six-month lock-in period, while others don’t have any limits at all. Resale through the investor’s dashboard, private sale (where investors may sell their fractional ownership to anybody on their own subject to KYC and other regulatory standards), and total asset sale (where the entire property is sold) are the three main methods to depart.

                              Is fractional ownership the same as investing in the stock market?

                              Fractional ownership of a commercial property is analogous to investing in the stock market since investors have the opportunity to choose whatever asset they wish to acquire shares of. However, the setup does not correspond to the stock market in practice.

                              Types of  usage of fractional ownership

                              Each member may have different ideas about how to use the item. As a result, fractional owners must come to an agreement on how to utilise the property after acquiring it. Investors’ usage rights are unaffected by the investment component. 

                              There are two primary methods for distributing usage rights, as follows:

                              A. Using a pay-to-use model

                              • Co-owners must pay a daily or weekly use charge to utilize the property.
                              • The rental money and the use charge are utilized to offset the costs.
                              • In the event of a surplus, the profits are shared among the co-owners.
                              • In the event of a cash deficit, all co-owners chip in to cover the costs.

                              B. Methodology for assigning use

                              • For a given amount of time, each owner will have exclusive usage of the asset.
                              • This time frame might be fixed, flexible, or a combination of the two.
                              • During this time, the co-owner is free to utilize the property as he or she pleases.
                              • Each co-purchase owner’s price and usage rights shall be proportional.

                              Commercial real estate is a popular investment option because it is a reliable source of income that is unaffected by market fluctuations and offers higher returns than other solid investments. While fractional ownership of CRE properties is still in its infancy, it is gaining traction. Investors see fractional investments as a cost-effective strategy to diversify their portfolio.

                              The government has yet to enact legislation governing this business model. So, have you begun to consider making changes to your portfolio by investing in commercial real estate in India? Do you have any commercial real estate in your portfolio?

                              Also read: 5 Strategies to Buy a House Before Selling Yours

                              Related Posts

                              individual retirement account (IRA)

                              Some Facts About Bullion and Precious Metals IRAs

                              January 28, 2023
                              Emergency Fund Money

                              How Much Money Does Your Emergency Fund Need?

                              January 25, 2023
                              How Much Should I Invest in Dividend Funds

                              How Much Should I Invest in Dividend Funds? Is Dividend on MF Taxable?

                              January 24, 2023
                              How The Brokerage Calculated

                              How The Brokerage Calculated in The Share Market

                              December 21, 2022
                              ADVERTISEMENT
                              Gud Story

                              Gudstory is the ultimate guide that will keep you updated about almost everything and anything. We aim to provide our readers with an informative detail about the viral stories that have been occurring around us. Here at Gudstory, we focus on delivering our readers with the latest information about everything.

                              The stories that we cover specialize in a wide niche which includes News, Lifestyle, Fashion, Entertainment, Technology, and Women. The purpose of the blogs and articles is to keep you updated using vivid formats and interesting styles so that significant information stays in your mind.

                              Business World

                              • Business
                              • Automotive
                              • Crypto
                              • Education
                              • Entrepreneurs
                              • Finance
                              • Insurance
                              • Investment
                              • Share Market
                              • Healthcare
                              • Industries
                              • Legal

                              Decor

                              • Home Improvement
                              • Design Ideas
                              • Events
                              • Furniture
                              • Gardening
                              • Home Repair
                              • Housekeeping
                              • HVAC
                              • Kitchen
                              • Painting
                              • Pest Control

                              Real Estate

                              • Real Estate
                              • Moving
                              • Construction
                              • Property Loan
                              • Selling a Home
                              • Buying a Home
                              • Commercial Real Estate

                              Company

                              • Advertise
                              • About Us
                              • Contact Us
                              • Home
                              • About
                              • Advertise
                              • Contact
                              • Privacy Policy

                              © 2018-22 Gud Story

                              No Result
                              View All Result
                              • News
                              • Business
                                • Automotive
                                • Education
                                • Finance
                                • Healthcare
                                • Investment
                                • Legal
                                • Real Estate
                                • Startup
                                • Entrepreneurs
                                • Industries
                                • Retail
                              • Decor
                                • Design Ideas
                                • Home Repair
                                • Furniture
                                • Gardening
                                • Kitchen
                                • Housekeeping
                                • HVAC Control System
                                • Events
                              • Lifestyle
                                • Health
                                • Food
                                • Drink
                                • Travel
                                • Beauty
                                • Make up
                                • Hair Care
                                • Skin Care
                                • Fashion
                                • Jewellery
                                • Shopping
                              • Sports
                                • NBA
                                • NFL
                                • College Football
                                • MLB
                                • NHL
                              • Gaming
                                • Esports
                                • Apex Legends
                                • Battlefield
                                • GTA
                                • Call of Duty
                                • Fortnite
                                • Cosplay
                                • CS:GO
                                • FIFA
                                • Genshin Impact
                                • Guides & Tips
                              • Tech
                                • Work Life
                                • Science
                                • Apps
                                • Mobile
                                • Gadgets
                                • Digital Marketing
                                • How To
                                • PC & Mobile
                                • Blockchain
                                • NFT
                              • Entertainment
                                • Biography
                                • TV & Movies
                                • Anime
                                • Quotes
                                • History
                              • Relationship
                              • Women
                              • Animals
                              • Luxury
                                • Billionaires
                                • Leaders
                                • Cars & Bikes
                                • Jets
                                • NCAA
                                • UFC
                                • Culture
                                • Homes
                                • Hotels
                                • Interiors
                                • Formula 1

                              © 2018-22 Gud Story