MSM Reits: How you can earn from tiny real estate holdings

Proposed fractional ownership structure allows for a minimum investment of ₹10 lakh

- Akshat Rohatgi

Indians have for long been fascinated with gold and real estate, two asset classes that many have unflinching faith in. So, when market regulator Sebi initiated discussions through a consultation paper aimed at regulating web-based platforms offering fractional ownership of real estate assets in May this year, it generated a lot of interest.

Fast forward to 25 November, the board of Sebi gave in-principle approval to the amendments to the SEBI Regulations 2014 for micro, small and medium (MSM) real estate investment trusts, or Reits. The final details are awaited but here is what every investor needs to know about the MSM Reits landscape.

Transaction flow

The transaction flow in a fractional ownership platform involves various stages. It starts with the FOP showcasing property details like entry yields that includes gross rental income on pre-leased properties, target IRR (internal rate of return) that encompasses rental income and property appreciation, property photos, tenant information, and growth estimates on their website.