Real estate is a valuable asset, and while it may be out of reach for some, fractional real estate ownership offers a way to invest in property without breaking the bank. So, could fractional ownership be the missing piece of your puzzle? In this blog, we go over what fractional real estate ownership is, its key benefits, along with its growing popularity in Dubai.
What Is Fractional Ownership?
Fractional ownership allows people to pool their money with others to invest in a high-value, tangible asset. Nowadays, fractional ownership enables you to buy a portion of an entire property, so you get all the benefits of owning that property without worrying about the upfront cost, property management, or ongoing hassle.
Benefits Of Fractional Real Estate Ownership
Lower Minimums
Fractional real estate ownership allows smaller, manageable investments, drastically lowering the minimum amounts required to start investing. Put simply, you’re able to purchase shares in high-value properties that you would not be able to afford otherwise.
Diversification
You can achieve greater diversification by investing in a wide range of properties through fractional ownership, reducing your overall portfolio risk.
No Hassle
When using fractional investment platforms, the platform normally handles all the hassle so you can enjoy the benefits of real estate ownership without all of the responsibilities that come with it.
Fractional Investments In Dubai
There are countless investment platforms that offer fractional real estate ownership for those who wish to invest in Dubai, such as real estate crowdfunding sites. The great thing about fractional ownership via such platforms is that you don’t have to do any work! Still, always make sure you’ve done your due diligence and thorough research before investing in any fractional real estate ownership platforms.
To give you an idea of how fractional real estate ownership actually works here in the UAE, let’s go over one such example of a Dubai-based real estate crowdfunding platform … *drumrolls* SmartCrowd! That’s right, from the comfort of your own home, you can own a “fraction” of a Dubai property starting at AED 500 and earn returns proportionate to your investment.
In fact, it’s never been this easy to invest in Dubai real estate. Essentially, a property is listed on the SmartCrowd platform, along with all the associated independent valuation documents and data, including location, price, potential yields, along with the expected return after 5 years. Registered users then choose the property they’d like to invest in, pooling funds with investors in order for the property to get 100% funded – how convenient is that?
After the property is fully funded, SmartCrowd creates a Special Purpose Vehicle, known as an SPV, to form a transparent ownership structure for each property. Essentially, this SPV acts as a separate company for investors to become shareholders in it. Each SPV is then divided into one million shares and investors are allocated shares proportionate to the investment they made on the platform. So, if a property costs AED 1 million, then each share of that property is worth AED 1. Meaning, if an investor invests AED 20,000, then he/she owns 20,000 shares or 2% of the property. Simple enough, right?
Learn More About Fractional Investments:
Get Started Now
If you’re interested in fractional real estate ownership, Dubai offers many great opportunities to tap into. From the comfort of your own home, you can invest in a fraction of a Dubai property starting from AED 500 right here on our platform. Go on, join the “SmartCrowd”, check out our latest properties here and invest in Dubai real estate – the Smart Way!
Disclaimer: This blog is intended solely for educational purposes and shouldn’t be treated as financial advice. We suggest you always conduct thorough research, perform your own due diligence and consult with financial advisors to assess any real estate property against your own financial goals.
