The pursuit of homeownership in the United States can be challenging, especially in cities with high housing prices like New York City. Amy Beihl, a 32-year-old working in digital consulting, found herself in this predicament and decided to explore alternative options. Unable to afford a property in New York City, she turned to fractional ownership and invested in five vacation homes across Europe.
Beihl purchased a 1/21st stake in a collection of vacation homes located in Tuscany, the South of France, the French Alps, the Cotswolds in England, and Mallorca. She opted for fractional ownership through August's website, which allowed her to invest in a share of these properties. The buy-in cost her 360,000 euros ($394,117), with an annual fee of approximately $10,000.
While Beihl loves living in New York City, she recognized that buying a home there was cost-prohibitive. She had always toyed with the idea of living abroad and saw fractional ownership as an opportunity to have ties to a place without the hassle of property management. Beihl believes that the cost of purchasing a stake in the European vacation homes went much further than it would have in New York City.
Fractional ownership provided Beihl with a sense of accomplishment and pride in her investment. She sees homeownership as a metric for financial success, but acknowledges that everyone views it differently. For her, fractional ownership allowed her to achieve her goals and have a stake in multiple properties across Europe.
In addition to investing in European vacation homes, many young entrepreneurs are bullish on alternative realty asset classes. Start-up entrepreneurs and new-generation realtors have come up with alternative real estate investment platforms, including co-working office spaces, co-living spaces, corporate housing, student housing, service apartments, holiday homes, farmhouses, warehouses, and logistics parks [c0cc1cdd].
Fractional ownership allows investors to own a share in diverse real estate portfolios starting from as low as Rs 5 lakh. The fractional owners enjoy benefits such as monthly returns, short-term stay options, and long-term capital appreciation. The Securities and Exchange Board of India (SEBI) has recently brought guidelines for fractional ownership of real estate assets, expanding investment opportunities for individual investors. Alternative investment platforms have emerged as a beacon of opportunity, democratizing wealth creation and breaking down barriers for women's participation in investment markets. Assetmonk, a Hyderabad-based platform, is facilitating women's participation in alternative investments and has raised close to Rs 350 crore from over 1,000 investors. FracSpace, another Hyderabad-based firm, offers fractional investment and ownership in a diversified portfolio of properties. Laxmi Nivasam Developers in Hyderabad is offering 8-12% returns on the purchase of land in a logistics park in Chittoor, Andhra Pradesh [c0cc1cdd].