Real estate continues to be the favorite form of investment for building wealth, especially in the face of rising inflation and stock market volatility. However, according to a Pew Research survey, seven out of ten Americans think young adults today have a harder time becoming homeowners and saving for their future than their parent’s generation did – especially as house prices have grown markedly faster than incomes in the last decade.
This has led to fractional ownership and crowdfunding models in the real estate market.
Fractional ownership in real estate is a way of buying a portion or percentage of a property. The real estate property is divided up into several parts or fractions, which makes it available for purchase to a number of co-owners with fractional interests. One resource for this is Here.co, where you can “invest in real estate like stocks” for as little as $100.
With this, the cost of the property is split between multiple shareholders, and so is the profit. As the property value increases, so do the rental income and equity. The property is usually maintained and overseen by a third-party management company paid by the co-owners of the property proportionally.
Fractional ownership is also a fantastic way to own a second home or a high-end vacation property without buying it outright. It’s like hitting two birds with one stone. You have an investment plus you get to use and enjoy your vacation property whenever you want according to your percentage of ownership. Owners can use their allotted time themselves or pass it on to family members, friends, or colleagues. Ownership interests can also be passed on to heirs
Would you like to invest in one?
Learn more about fractional real estate investing in this episode of The Shawn and Matt Show. We also discuss a cold-calling lawsuit (I hate cold callers!), and an $8M Frank Lloyd Wright house.
