When it comes to investing, almost everyone chooses the conventional options available, that is either gold, mutual funds or real estate. Even when one considers real estate, they are more likely to invest in plots or residential property. Commercial real estate is not an investment option someone would readily go for. And even if they did, the Grade A or premium office spaces cost way too much for one person to invest. As it would cost somewhere in crores and only High Net Worth Individuals could afford. But that is not the case anymore, thanks to fractional ownership in commercial real estate. With the fractional investment system, the investment in Grade A office spaces starts at 25 lakhs and above.
This type of investment in Commercial Real Estate is not only the best but also a pandemic-proof investment option. While this is a very new concept in India, it has been popular in the international market for quite some time now. Let’s get to know how fractional investment in CRE is better compared to any other investment option.
|Conventional Investment||Fractional Investment in CRE|
|Mutual Funds||Mutual funds are a relatively safe investment option if you have a significant understanding of the market. As many factors are hidden or unknown to an investor. Some of which are high annual expense ratios, load charges and returns dilution. Not to mention the investor has no control over their portfolio. As mutual funds are the ones that have all the control. They do all the picking and investing work. While also, there are chances of you losing a part or complete principal amount.||When you make fractional ownership in commercial real estate, there are no hidden factors. It is a safe investment option, given the Grade-A quality of the underlying asset. And unlike mutual funds, the price fluctuations are less likely to differ very often.|
|Gold||Those who think mutual funds are extremely risky and are unable to wrap it around their head, mostly invest in gold. You don’t need much market knowledge, but need to have an understanding of when to buy or sell gold because of the price fluctuations. On the other hand, gold doesn’t provide any kind of cash flow. It just sits in your bank locker, until you decide to sell it. And sometimes people refrain from selling their gold jewellery because of the emotional value it holds. Thus, it is not a very great investment option if you want regular returns.||When you make a fractional ownership in commercial real estate, you are securing your future. This type of investment ensures an increasing rate in cash flow as well as capital appreciation with time. You are sure to receive an increase of up to 15% rental returns every three years, which will be mentioned in the lease. The market is estimated to be worth $5 billion and continues to grow. Fractional investment in CRE is said to be the future in the real estate industry, as it solves the biggest problem, that is high capital investment.|
|Real Estate||Everyone witnessed how the industry came to a standstill during the pandemic. People who had plans of buying residential property types changed their mind. This was due to the uncertainty that COVID-19 brought with itself. Many people vacated their homes and went back to their hometowns, which left properties empty for months together, leaving landlords with no monthly cash flow. Also, when you consider investing in any type of residential property, you should look into how much returns is going to get you and in this case, it is low returns.||Whereas in commercial real estate, the rental agreement lasts a minimum of three years. And you will receive timely payment, as Grade A office spaces are mostly occupied by MNCs, banks and IT companies. You don’t have to worry about how much setting up the office space will cost because companies mostly prefer decorating their own office space.|
|Commercial Real Estate||Commercial real estate is a stable and growing market. Even during the pandemic, it stood the test of time. It wasn’t affected much, even with all the companies providing their employees with the work from home option. As per Housing.com, the vacancy level was as low as 5.6%, as of April 2020. This number is said to be lower than the previous year. This is a great investment option but is too much for an individual to invest in alone. Tech parks and premium commercial spaces could be in the range of a few hundred crores||Fractional investment in CRE is an affordable way to make an investment in premium Grade-A commercial properties and reap the long-term benefits. With the fractional investment, you can invest as little as 20-25 lakhs and enjoy the rental returns as high as 6-10% per annum.|
Fractional ownership in commercial real estate is the best investment option compared to any other investment type, as it offers high returns with low risks. However, ensure you check the location of the office space, local zoning laws, invest in the right stage, the type of tenants it will attract and so on.
YieldAsset, the most trusted platform for secure and high-yield investments, is the leader in hassle-free small investments in Grade A commercial real estate. You can earn a monthly income and build long-term wealth as property prices increase with one of the best commercial real estate investment companies in India. Reach out to the team today to know more about the investment options available.