6 Reasons Why Investing In Fractional Property Ownership Is The Best Retirement Plan

The internal rate of return (IRR) on fractional assets ranges from 13 to 20 percent, which is greater than most retirement plans.

Share on facebook
Share on twitter
Share on linkedin
6 Reasons Why Investing In Fractional Property Ownership Is The Best Retirement Plan

While there are numerous passive income sources and retirement corpuses, investing properly is the key. Commercial real estate (CRE) fractional ownership is one such asset class that offers an ideal opportunity when analyzing a long-term and reliable investment. In combination with a sound investment plan, commercial real estate (CRE) can be a reliable asset class that provides capital security, regular income (often between 10 and 12 percent), and portfolio diversification, all while reducing possible risks. This article will address all your concerns regarding fractional ownership for senior citizen investors. 

Understanding fractional ownership

In the world of investment, commercial real estate has long been a closely guarded secret. In comparison to other solid asset classes, it has provided returns ranging from 8 to 15 percent each year for decades. However, due to the large ticket size, lack of knowledge, data, and transparency, it has only ever been available to HNIs, private equity companies, and family offices.

Fractional ownership divides a single asset into pieces, allowing investors to gain ownership of a piece or more dependent on their investment. It’s up to the investor to determine what type of asset they want to put their money into, which allows them to craft an investment strategy that fits their risk tolerance. Fractional investment is becoming increasingly popular in the United States and the United Kingdom as a profitable way for individuals to invest a little portion of their money instead of significant quantities in real estate.

Click here to get an in-depth understanding of fractional property investment

Why is fractional ownership an excellent resort for my retirement corpus?

  • Regular Source of Monthly Income:

After retirement, your finances become more of a problem if your regular monthly income quits. As a result, one of the most critical elements of retirement planning is guaranteeing a steady stream of income that will provide sufficient finances long after you retire. Investing in fractions provides a reliable monthly or quarterly stream of passive income, as well as the potential for long-term capital gain. Where the returns are three times higher, ranging from 8% to 12% compared to typical investment products such as real estate or FDs, which offer returns between 2% and 6%.

  • Stable asset class: 

Younger investors may afford to take chances with their assets, but retirees must be cautious. Capital appreciation and rental income are two ways fractional CRE investments pay off. There are several advantages to investing in commercial real estate (CRE), including consistent profits and regular cash flow. The reason for this is that the format does not consume funds for under-construction projects, assuring high occupancy and stable rentals while also providing a steady cash flow. In addition, the asset type is less subject to market shocks than either equity or mutual funds. A retirement portfolio, in particular, requires a steady asset class with little exposure to high risk and erratic returns, which is exactly what it provides.

  • Uncomplicated investments:

It may appear difficult and complicated to include CRE in your investment portfolio because of the complexities involved, but owing to new-age tech players who provide an easy-to-use one window platform, investing in real estate across the country has never been easier. Data-driven selection, strict financial and legal due diligence, and thorough selection criteria are used to eliminate all asset-related risks besides paperwork and site visits. Since retirement is a time of disengagement, no one wants to be bothered with unfamiliar and time-consuming procedures during this time.

Also, Read Why fractional ownership is an intelligent way to own property in modern times!

  • Security of capital

Property has long been regarded as one of the safest forms of investment due to its tangible, physical aspect. As a result, its worth is directly tied to the building’s ongoing operations. Its value does not fluctuate according to the performance of the market like equities or mutual funds do. It’s not like a bank deposit or a bond; this thing has real value.

  • Goldilocks asset:

Fractional property is organized such that it’s neither prohibitively expensive (like buying a house by yourself) nor limitingly small, like the Senior Citizens Savings Schemes (SCSS), which cap investments at 15 lakh. The fractional property allows investors to pick and choose how much they wish to invest up to Rs. 25 lakh. Investment in a single property will assure that a larger share of the rental income, but investing in many properties will diversify your portfolio even further.

Also, Read How fractional ownership is a minimum investment with maximum benefit opportunity

  • Liquidity alternatives and smooth operations:

With fractional ownership, it’s easy to move between different assets. In addition to the benefit of entering CRE investment at a lower investment bracket, investors are not troubled by any overheads. Exiting the building is just as simple and quick. When someone wants to get rid of their stake in a company, all they have to do is notify the investment platform and set up an auction for their stock.

Also, Read The benefits of investing in Fractional ownership for senior citizens 

How much money should retirees put into fractional ownership?

Fractional ownership is considered a low-risk, high-return investment by industry professionals who believe it should be included in everyone’s retirement portfolio. Seniors can put up to 25% of their retirement funds into fractional ownership, which can provide a consistent stream of rental income while also increasing their wealth. The balance, according to experts, can be placed in secure vehicles such as debt mutual funds, money market funds, and government-backed savings plans. According to experts, investors that prefer fractional ownership should only invest in pre-leased Grade A assets to protect their capital. Even though the properties provided on fractional investing platforms have been properly inspected across a wide range of criteria, investors are encouraged to conduct their due research before committing to a purchase.

There is a lot of uncertainty in retirement planning because of the pandemic, and investors have had to rethink their investment possibilities as a result. If investors want to reach their financial goals in the post-Covid world, they’ll have to think hard about how to deal with financial shocks. CRE is a 5 billion dollar business in India, and it’s only going to keep growing. The developing formal economy, as well as high-end commercial buildings, make it an attractive place to invest, allowing you to achieve your financial goals over the long term. Fractional ownership and crowdfunding investors can find high-quality A-grade investment options with Assetmonk India’s fastest-growing real estate platform. We guarantee great liquidity, transparency, and an IRR between 14 and 21 percent. Come visit us and start your investment!!

FAQ'S

Fractional ownership is one of the finest investment options for senior citizens because of the monthly rental income, capital security, hassle-free investment, and lower capital needs.

Up to 25% of retirement assets can be invested in fractional ownership, resulting in a constant stream of rental income and capital gains. The rest of the money can be put into secure products like debt mutual funds, FDs, and government-backed savings plans according to experts.

Related Articles

istockphoto 1313421433 612x612 1

Pradhan Mantri Kisan Samman Nidhi Yojana

What is the Pradhan Mantri Kisan Samman Nidhi Yojana? The Pradhan Mantri Kisan Samman Nidhi Yojana is a plan initiated by the Indian government. It gives income help of as much as Rs. 6000/- annually to all marginal and small farmers. Families of land-owning farmers receive an Rs. 6000/-  cash advantage a year under the Pradhan Mantri Kisan Samman Nidhi Yojana plan. This amount will get paid Rs. 2000/- in 3 equal payments per 4 months. Also, read Saving Schemes in India. The Motive of the Pradhan Mantri Kisan Samman Nidhi Yojana? As we all know, agriculture is the backbone in the Indian economy. So, farmers are an important part of society. But, the economy has socioeconomic gaps between the urban areas with rural areas. So, farmers battle with long-term profitability. This problem has afflicted the majority of India’s people since its freedom. The state and federal governments have worked to solve this challenge. They have also introduced a variety…

Read more
istockphoto 951524746 612x612 1

Post Office Time Deposit

So, what is the Post Office Time Deposit Scheme? India Post provides the post office time deposit as a modest savings program for Indians. Post Office Time Deposit Scheme is a savings account investment provided by India Post. This program gets intended for depositors who desire to make a one-time deposit with an FD of 5-year which is a tax advantage. With a few exceptions, it is identical to a bank fixed deposit. People can create a post office time deposit account by approaching their closest post office or by utilizing India Post’s official app or website. India Post has been in existence since 1854. It is the most globally disseminated postal network, with over 1.55 lakh offices spread over India. Majorly known for mail delivery, India Post also offers these services: Small savings schemes. Postal Life Insurance and Rural Postal Life Insurance Instant money order E-money order. Mutual funds. Services for money transfer Also read Post Office Investments –…

Read more
istockphoto 1364622197 612x612 1

PPF Vs SSY

PPF Vs SSY: What is the difference between the two? Sukanya Samriddhi Yojana Account (SSY) and Public Provident Fund (PPF) are the safest investments. These are accessible to those desiring significant financial development with a low-risk component. So, if you wish to invest in any or both of these schemes, you would investigate and check. Financial objectives, risk tolerance, rate of interest, and versatility should all get addressed. Read SSY – Sukanya Samriddhi Yojana Benefits & Interest Rates. PPF Vs SSY PPF and SSY are solid investment options, although they differ in important ways. The Sukanya Samriddhi Yojana is a female child welfare plan. It helps to safeguard a girl child’s future. But, the PPF is a program that enables depositors to receive zero-tax interest. In India, the Public Provident Fund (PPF) plan provides a long-term investing choice. It provides high profits while also giving tax deductions to the investor. A PPF account may get created in any private or…

Read more
Small Savings Schemes

Small Savings Schemes

Small savings schemes are an excellent way to save money. They offer a good rate of interest and can be used as an alternative form of collateral for investments, bonds, and property. The following schemes are available throughout the country and are some of the most popular ones that you can consider: Post Office Time Deposit Scheme The Post Office Time Deposit Scheme (POSTD) is a small savings scheme launched by the Government of India to provide investment opportunities in the secondary market. The scheme was launched on 15th September, 2015. This scheme is popular in rural as well as remote corners of the country, where the people have limited access to other financial products or alternative investments. The Ministry of Finance sets the interest rates for this scheme based on the performance of government securities, which is generally spread across the yields of the government sector. For 2022, the rates of interest are 5.5%, 5.7%, 5.8%, and 6.7% for…

Read more
istockphoto 1033711098 612x612 1

UAN Helpdesk

What is the UAN helpdesk for PF account holders? UAN is a 12-digit Universal Account Number that is assigned to every PF account holder at the time of joining the first job. The PF number when allocated, is used for each organization through the use of UAN. The new PF identification number that the person is associated with is his UAN in each new company of which an employee is a part. UAN can be described as a code that is used to identify several PF account IDs for an individual participant. It serves as an umbrella for multiple PF IDs assigned to individuals by various organizations. Also read UAN Registration & Activation Process Online. What exactly is UAN Helpdesk? The Employee’s Provident Fund Organization, India has a separate helpdesk online for (Universal Account Number) UAN-related issues and complaints. Users can access the helpdesk online and resolve their issues on their own or contact the executive offline. Employees can also…

Read more
child saving scheme

Child Saving Schemes

A child is the most precious thing in your life, and it’s important that you take care of them. However, it can be hard to know how much money you should save for their future education, health, and insurance needs. There are many different types of child saving schemes available for parents who want to safeguard their children from financial difficulties later in life. Here are some examples: Sukanya Samriddhi Scheme The Sukanya Samriddhi Yojana is a child saving scheme specially made for girl children. It was launched by Prime Minister Narendra Modi on January 22, 2015. The objective of this scheme is to promote the financial inclusion of girls in India by incentivizing them to save money through the Sukanya Samriddhi account. The interest rate ordered by this scheme is 7.6% per annum, and the minimum and maximum investment amounts are ₹250 and ₹1.5 lakh per annum respectively. Also, the maturity period of the Sukanya Samriddhi Scheme depends on…

Read more