FRACTIONAL
PROPERTY INVESTMENT

INVEST IN PROPERTY, AT A FRACTION OF THE PRICE

Fractional property investment, also known as fractional ownership, is when a property investor purchases a share, or fraction, of the property. In this way, multiple investors can collectively purchase and own a property.

Why choose fractional ownership?

Fractional ownership allows more people to invest in the property, by sharing the costs of ownership, while also providing the benefits of property ownership such as capital appreciation, rental income, and personal use if applicable.

For GPFG clients, the top reasons they give for choosing fractional property investment are:

Accessibility. Fractional ownership opens premium real estate to more investors, allowing shared ownership of luxury properties.
Flexibility. Investors can choose their investment size, suitable for both new and experienced investors.
Passive Income. High-quality, well-located properties ensure strong rental yields, at the same rate as full ownership.
Simplicity. All property management tasks are handled by a service team, offering a hassle-free investment.

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How does fractional ownership in property work?

With fractional ownership, the company selling the asset or property divides the cost of the property into fractions, or shares that can be sold to investors.

1. Purchasing Shares - Investors buy fractions or shares of the property, which equates to part ownership. These shares are offered by companies specialising in fractional property investments.
2. Earning Rental Income - As a part-owner, you are entitled to a share of the income generated from renting out the property. This provides a regular source of passive income.
3. Property Management - Fractional investors are not responsible for maintenance or upkeep of the property. These services are generally handled by a property manager.
4. Capital Return Potential - Besides rental income, there's an opportunity for capital gain. When the property's value increases, so does the value of your shares.
5. Selling Your Shares - You can opt to sell your shares either when the property is sold or at a time of your choosing. This sale can potentially yield a return based on the appreciated value of the property.

**It is important to note that since we deal with overseas investments, many of our investors purchase leasehold units, which may not have capital returns, depending on the time left on the lease. For capital returns and selling your shares, our team is always happy to discuss terms for extensions, exit strategies, and how to maximise ROI).

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What are the benefits of fractional property investment?

Fractional property investment offers several benefits that traditional property investment cannot match.

Lower entry point

Investors are buying shares in a property, rather than having to save for a large deposit and take out a significant investment loan.

Flexibility

Investors have options for how much they want to invest, depending on what's available. With GPFG, our fractional investment opportunities are divided into 25%, 50% or 75% of the unit value.

ROI and capital appreciation

Just like traditional investments, fractional investors still receive income and capital growth of their property. Fractional investment has the same potential earning benefits of investing in a whole property, directly relative to the amount invested.

No hassle

Since you don't actually own the property, you are not responsible for the day-to-day maintenance or tenants. Depending on the contract, the property manager or company distributing the shares will handle these items independently, or require a small, one-time or yearly fee.

Portfolio diversification

With the lower price points, investors can diversify their funds across a wide portfolio of properties. Fractional investment is a simple and efficient way for investors to get exposure to a range of properties and mitigate risk through diversification.

Prime Real Estate Access

Fractional ownership allows investment in top-tier properties in sought-after areas, which usually aren’t available to small-scale investors.

Personal Enjoyment

Depending on the investment terms, Investors can enjoy personal access to their property, which is appealing in tourist hotspots like Bali and Thailand.

Tax Benefits

Fractional ownership may offer tax advantages, the same as property investment. GPFG provides Depreciation Schedules and expert tax advice to maximise these benefits for investors.

FAQs on Fractional Real Estate Investment

What types of properties are available for fractional ownership?

Our fractional ownership includes luxury residential properties, vacation homes, and commercial real estate. GPFG offers a diverse portfolio, featuring branded hotel/resort units, luxury villas, and modern loft apartments. We're excited about launching new developments in Australia and Europe soon.

Can I choose which fraction to invest In?

Yes, investors have the flexibility to choose their investment level, from a quarter, a half, or another fraction of the property. Generally, GPFG's fractional ownership shares start at 25%, with options up to 50% and 75%. For our high-end properties, our fractions start at a lower amount.

How do I manage my fractional property?

Management is typically overseen by professional firms for a hassle-free investor experience. At GPFG, we collaborate with world-renowned hotel brands and experienced property managers to ensure maximised returns and proper management.

How is resale handled in fractional property investment?

Fractional shares can be sold, potentially benefiting from any increase in the property's value.

What are the tax implications of fractional real estate?

Fractional real estate owners face property taxes based on their share and may benefit from deductions like mortgage interest and property depreciation. At GPFG, our tax experts will provide you with a Depreciation Schedule and also walk you through any other deductions that you can claim.

How does fractional ownership differ internationally?

Fractional ownership varies globally due to different legal structures and market dynamics. GPFG provides comprehensive legal support and documentation for secure investments in any country.

What are the exit options in fractional real estate?

Exit strategies include selling your share to the management company, another investor, or on the open market. GPFG can advise on all available selling options.

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