‘Millennial’ is a term used to describe people who were born in the last two decades of the 20th century. Millennials are in their early twenties to early forties today. This means that they will be professionally active for at least two decades before they hang up their boots. In case of money, compounding is the eighth wonder of the world as they say. It means that if you invest in assets that yield consistent returns over a period, you will create wealth. The trick is to identify an asset that can tilt the risk-reward ratio in your favor. That is, the asset should be less risky so that your initial investment is preserved and it yields a good return over and above what ‘fixed income’ instruments can offer so that you can compound your money in the future.
In layman's terms, Fractional Ownership (FO) is the distribution of the ownership of a very expensive and high-value asset that yields consistent return and provides capital appreciation over time. FO in commercial real estate enables young people to invest a sum of money and own fractions of a grade-A commercial real estate. Their ownership corresponds to the amount they invest. The ownership comes in ticket sizes of INR 25 Lakhs or so, and for every such ticket that you invest in, you start owning a portion or ‘fraction’ of the real-estate asset. In the post-pandemic year, there has been a tectonic shift in the mindset toward investing, especially among young people in India. One can see a lot of participation across equity markets and other so-called non-traditional asset classes.
Fractional Real Estate – Tailor-made for the millennial investor!
Venkat
Fractional Ownership is bringing in young people and millennials into the property market as well. For a generation that prefers an Uber/Ola over owning a car, a rented apartment over buying a house, etc., this is a transformational shift. This generation prefers access over ownership but the trends in FO in grade A commercial real estate indicate a very different trend. Millennials such as Mr. Noaman Naik, working at Deloitte, have taken to FO investments seamlessly. With hBits as a platform, they have had an enriching experience while making such investments largely due to the transparency and ease of investment understanding that such platforms provide. His experience is summarized in the quote below:
"I have invested in 2 properties with hBits. The first time the ownership processes were super smooth; my rentals and all related formalities were managed without any glitches, to the extent that the real-time dashboard always kept me updated on the rental returns. The success that I attained gave me the courage to reinvest again because I was sure that it was the best way to balance my portfolio. And why not? The stock markets are volatile...the Fed rate hike is coming...the Russia-Ukraine crisis...these reasons will make the stock market investment even dicier. But with hBits' properties delivering 8%-10% rental yield and 5%-10% appreciation, it makes absolute sense to invest my money with hBits."
