Are you worried that a recession will ruin your investments? If the idea of a future recession scares you, don’t invest in stocks or other high-volatility securities. Even strong blue-chip stocks can fall during a recession. Instead, you should look at assets that won’t be affected by a recession. But there is no such thing as an investment that is “proof” against a recession. But assets that don’t change much, like fractional ownership commercial real estate, may help your portfolio get through a slump. It can help you make your portfolio less risky and come out of the storm stronger.

Why Buy a Fraction of a Property When the Market is Down?

Stability

Due to portfolio diversification, ease of departure, capital gain and continuous rental income, small investors often control fractions of commercial buildings. India’s commercial real estate market will soon expand by 13-16%, making fractional ownership economical. In 2020, India’s commercial real estate market declined. Q3 was much better. COVID-19 has decreased property prices in London, Dubai and Stockholm. Office leasing grew due to India’s booming outsourcing economy, say analysts. US and European multinationals dominate about 63% of India’s commercial area. It should tell NRI investors it’s time to invest in property.

Diversification

You want to buy property in more than one market, but you don’t have enough money. This is possible if you own a piece of real estate in parts. With shared ownership, for example, you can invest in a home while running a business, renting out houses and paying your mortgage. Since your capital is not linked to a specific property, you can spread it out over many properties, different grades, different locations and even other parts of the same city. Then, you can choose to focus on one area or continue to do different things and make money from the ups and downs of the economy. It makes the market less likely to be unstable. With fractional investment real estate, you can get all the benefits of diversification without putting down big deposits on each property.

Accessibility

Through fractional ownership, anyone can have access to and invest in Chennai’s INR 200 crore office complex. It’s a big investment that most people can’t make because they don’t have enough money. Still, because of fractional ownership, anyone in Chennai can buy a house that looks exactly the same for as little as Rs 10 lakh. Such office buildings can also bring in between 6% and 10% in rental income each year. It brings in rent of between Rs 60,000 and Rs 1 lakh per year. With Rs. 25 lakh, a person can put money into commercial real estate.

Long-Term Leasing Contract

Regular renters leave. Until a replacement is found, the landowner must pay rent. Commercial buildings have 3-year leases. The lease is extendable. Commercial buildings guarantee investors’ income. Large enterprises, IT firms and financial institutions lease these high-end commercial facilities. These companies pay rent promptly. Tenants prolong their leases because of the effort, time and resources invested in turning rooms into workplaces. Investing in a previously leased commercial property might be lucrative.

Rental Income Returns

Rent is routinely paid. You must wait until the investment matures and the lock-in period ends before getting profits. Commercial fractional ownership has a good ROI due to rental income and appreciation. India’s commercial property investment has expanded 16% annually during the past five years. A good fractional ownership organisation may boost rental revenue by 15% within three years. It’s included in the lease contract to protect you against inflationary pressures and keep your investment consistent.

Property Appreciation

Commercial real estate investments can double returns. Fractional ownership offers financial advantages and property appreciation. Commercial property is yours. Your stake will increase. Small investors are becoming interested.

Liquidity

“Real estate is illiquid, so I don’t invest.” We understand. Wait. Real estate is cash-strapped; fractional ownership isn’t. Real estate investments are less liquid than fractional property holdings. It’s rare to be able to sell your investment at any time, making trading less risky. Why? You may sell or give away your property.

As a result, always put your money where it feels right!