UK property investments are far more affordable for investors with Fractional Ownership
Fractional property ownership has increased dramatically in popularity as the cost of real estate continues to rise. There are many benefits to this style of investment which allows you to invest in property for a relatively small outlay. Whether you are looking to introduce a new type of property asset to your portfolio or complement your existing assets there are many benefits to fractional property investment.
The structure of these investment vehicles is very straightforward with specifically created companies owning the property freehold to the underlying asset. Each investor is then invited to acquire one or more parts of the freehold dependent upon their personal circumstances. This very simple structure is one of the major attractions for many investors.
Excellent returns – no mortgage required
For as little as £11,500 you can acquire fractional ownership of a property investment requiring no mortgage. This relatively small entry-level figure will allow those with limited capital to invest in property which may normally be out of their financial reach. However, remember that you are not limited to just one share of a fractional ownership property…you can buy multiple ‘fractions’, increasing your returns.
Diversifying your property investments across an array of different assets using traditional investment methods can be expensive. Fractional ownership allows you to minimise your risk and maximise your potential returns across a number of different properties. This style of investment allows you to put together your own property jigsaw taking in different types of asset, worldwide locations, varied capital outlay and fixed income.
Hands off investment
One of the major benefits of fractional ownership is the ability to take a hands-off approach letting a management company look after the day-to-day administration. Utilising the strengths and skills of each individual party involved in the property investment/management process also leads to greater efficiency. In simple terms this allows more time for investors to research their property targets and to maximise their returns.
Many fractional ownership investments offer fixed returns in the region of 8% to 15% which is especially attractive in the current low interest rate environment. Fixed returns allow investors to plan ahead with regards to cash flow and also potential reinvestment in other properties. For many people it is the fixed returns which are one of the more prominent attractions especially in later years.
Projects are carefully researched
Property management companies offering fractional ownership have an in-depth knowledge of the industry and very close relationships with high quality trustworthy developers. The ability to pick and choose developers with a proven track record offers further peace of mind to investors looking to expand their property exposure. The fact is that each development needs to be as secure as possible to maintain the reputation of the property advisers – in this industry reputation is everything.
Complimentary usage options
While the investment attractions of fractional ownership should be upper most in your mind, many come with complimentary usage options allowing you to live that millionaire lifestyle for a relatively small outlay. A number of investors have been able to pick and choose various fractional ownership in 5* hotel assets which offer them various holiday destinations throughout the year.
Is fractional ownership for you?
As we touched on above, fractional property ownership has become more popular as the cost of property continues to rise. It is the ability to create a diverse portfolio using a relatively small amount of money which appeals to many investors. While the usage options should be seen as a bonus, they are enjoyed by investors, offering a means of leaving the millionaire lifestyle at a knockdown price.
Whether you look at fractional property ownership as a means of building your own property exposure or perhaps complementing your existing investments there are numerous options available. Please check out the Redbrick Wealth video which explains fractional ownership in more detail:-