Property Ownership: Shared or Fractional

More and more people are looking for ways to invest in Dubai property without spending much money upfront. Shared ownership, or fractional ownership, is one way people do this.

With shared ownership, you purchase a certain percentage of the property (usually between 10 and 50%) and then pay monthly fees to the developer or management company. The other owners do the same. This means that you share the costs and the risks of ownership with other people.

As prices increased in the first half of 2022, investors are learning that shared ownership of Dubai homes may be a dependable source of income.

Shared ownership of houses and companies in Dubai seems to have attracted the interest of investors, even if rises in property value aren't anticipated to speed up as quickly.

One in ten homes that Azizi Developments sells now have fractional title paperwork. Many owners—up to four for each house—share the same rights to the land, according to a representative for the company.

A single investor may also sell their shares without harming the interests of the other three investors if they opt to withdraw from the venture.

Although other developers are also aware of the benefits of fractional ownership, they defer to the investors' choice of how to participate.

Dubai started supplying many documents for a single property last year. Since then, local auctions have been organized for buying a "share" in the property.

Demand Is Still Another Factor

Since January 2021, the real estate market in Dubai has been expanding, first due to end-user purchases and then as a consequence of foreign investors choosing the city as their primary or secondary residential base. This latter explanation explains why there has been such a huge demand for luxury real estate.

Despite all this, investors have also combined their funds to buy property in Dubai as indirect exposure to real estate. This method has been used to obtain apartments in Business Bay, Downtown, and Dubai Marina.

A particular purpose corporation can be set up to provide other buyers access to the same unit. However, only up to four buyers can receive titles to a property under a fractional ownership arrangement. That interests a lot of residents as well as outside investors.

Real estate investments have more upside potential in the current market than unconventional assets like cryptocurrencies. Many investors are converting by purchasing the complete unit or a portion.

Timed Market Entry

According to Siddiq Farid, co-founder and CEO of the crowdsourcing website SmartCrowd, timing the market might be difficult for investors. According to Warren Buffet, remaining in the market for an extended period is more crucial than entering it at the ideal moment.

According to SmartCrowd, it had a total net return (rental income + capital gains) of 39.25% over 17 months and an annual return of 27.92% after selling a real estate investment in Dubai Marina.

The Marina Bay Central studio apartment cost Dh530,000 from 53 investors in February last year, and Dh780,000 was paid for this month. As a result, gross capital increases by 47%.

Truly, it's the best time to look for a commercial property for rent in Dubai.

Conclusion

Shared ownership in Dubai properties is turning out to be a good thing for investors. By allowing them to purchase a portion of the property, they can get a foothold in the market without paying the full price. This has increased interest in Dubai properties, which is good for the economy. If you're interested in buying or renting a property, you can contact Dubai's best real estate companies.

Dacha is a premier real estate company in Dubai that was established in 2004 and offers premium real estate for sale and lease and complete property management services. Contact us if you want to buy property in Dubai!