Fractional Ownership of Real Estate

Digital Property Buying: as Easy and Secure as Shopping Online.

“Stay home, stay safe” shouldn’t mean that all real estate investing must necessarily come to a standstill. At a time when staying indoors has become the mantra to protect the population from the threat of Covid-19, online property purchase has emerged as the key to sustained ownership of commercial real estate in the midst of the lockdown. The need for venturing outside is completely eliminated with technology enabled online dealing as everything you need to make the right decision is literally at your fingertips.

Online Asset Trading

From stocks and bonds to gold and real estate, all asset types can be traded online nowadays. Equities have been bought and sold online for many years, while investors can also trade in government securities through dedicated online apps like NSE goBID. And gone are the days when buyers had to visit a jeweller or a bank to purchase the yellow metal; technology has now made it possible to invest in ‘digital gold’ of guaranteed purity through common digital platforms such as Paytm and PhonePe.

Although the physical nature of real estate to online purchase is just a matter of awareness, 100% online purchase are now possible in the commercial real estate space with the aid of specialised and secure platforms. Companies operating these platforms perform all the research and due diligence for you so that you can invest safely from comfort of your home.

Online Property Purchase

Property purchase has traditionally required significant physical effort. Activities such as scouting for a location, checking out construction quality, assessing design and layout, inspecting the surrounding areas, and verifying documentation, demand considerable time and energy from the buyer. Issues like maintenance and rent collection require the owner to stay in close proximity of the building even after the purchase. But online trading in real estate is gradually reshaping the industry by removing the need for physical proximity and empowering you to take important decisions based on information on your screen.

Residential Real Estate

Even till a few years ago, purchasing residential real estate meant devoting several days to physically inspecting sundry locations. The advent of the first major online property sites in the mid-2000s made property selection simpler through online listing of inventory. Each listing was accompanied by important details such as pricing, amenities, pictures, and floor plans to make the process as simple as possible for the home buyer. In a recent article by CNBC TV18  “This real estate company sold 500 homes amid coronavirus crisis;” the author has discussed the usefulness of online property buying and how such a medium can be used to reach potential purchasers even in less than ideal scenarios

Many other features have been added to property portals since then including online mapping, virtual 3D tours, video tours, price heat maps etc. Although end-to-end online transaction is yet to become viable in the residential property sector, online portals have had a game-changing impact on the industry by influencing the way customers search for property.

Commercial Real Estate

Unlike residential realty, the more formalised nature of the commercial real estate sector in India is well suited to end-to-end online purchase of inventory through the fractional ownership model. This innovative model is chiefly designed to help in the broad-basing of commercial real estate ownership which comes with massive price tags that put them out of the reach of common people. By allowing investors to own a piece of premium Grade A commercial property at relatively small ticket size, fragmented ownership platforms have opened up the commercial real estate space to ordinary investors by providing high-quality options at affordable prices. 

Fractional ownership platforms not only list various properties on their website but also perform due diligence vis-à-vis each listing. They specialise in vetting properties and conducting due diligence with the help of their own staff. They even manage the property for you and help find lessees when a vacancy arises. The entire process is completely online enabling investors to buy property anywhere in the country without the need to venture out. Here’s how it works:

  • Property Selection: The portals display a wide array of options complete with details regarding size, pricing, rental yields, appreciation value, etc. The asset value is completely transparent with a detailed break-up of the pricing structure. You can also find information about the location, tenant (in the case of pre-leased properties), images, video walkthrough, LEED certifications, amenities, name of developer and so on. Practically every detail that is relevant to the selection process from the point of view of the investor can be found on your computer screen.
  • Due Diligence & Purchase: There’s no need to worry about due diligence as all the properties which are listed are carefully vetted by the company. From bank loan documents to land use permissions, everything is carefully scrutinised by professionals. Once you express your intent, the firm will appoint transaction specialists to guide you through the process and answer all your queries.
  • Maintenance & Earning: The services do not stop with purchase. The company employs staff for the upkeep and maintenance of each property leaving you relaxed and stress-free. They also perform rent collection and assist in finding a tenant every time a property falls vacant.
  • Selling: Investors can resell the property at any time by simply indicating the same to the company. The company’s transaction specialists will help you re-list the property on the portal and guide you through the redemption process.

The transaction process is totally safe with trained specialists handling every aspect of the deal. Due diligence is given utmost importance. Investors too can cross-check key documents using the relevant online forums. Most key documents such as occupancy certificates and building plan approvals are readily available on the websites of the respective municipal authorities.

Tenant profile is an excellent yardstick to validate the quality of a shortlisted property. Reputable Indian and multinational companies with large balance sheets and global footprints follow well-established norms and procedures for due diligence when it comes to leasing commercial property. Their presence can be reassuring of the intrinsic value of your investment and is one of the best parameters to guide you vis-à-vis your investment.

Reliability is the Key

Online property investment is not only simple and hassle-free but also highly secure. Although each offering is pre-vetted by the company prior to listing, investors can also carry out independent online checks to satisfy themselves about the value of their investment. At the same time, the onus is in the customer to select a reliable platform. Reliable real estate purchasing service providers can help you get the best deals in a totally secure and transparent environment from the safety and protection of your home.

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