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Fractional Ownership in Real Estate

Fractional Ownership in Real Estate

Fractional ownership is an exciting alternative to buying a house solo. For many, it is a way to enjoy a second home for vacation purposes, after purchasing a primary residence on their own. Fractional ownership is similar to the familiar timeshare model, but it has many advantages that timeshares lack. We will take a quick look at how fractional ownership works in 2019 so that you can decide if this is an ownership model which you should consider further.

How Fractional Ownership Works

Properties that are available under the fractional ownership model typically exist in resorts, just like timeshares do. However, unlike the timeshare, fractional owners can receive partial equity that appreciates in value.

In practice, fractional ownership looks a little bit like this. There is a situation where you want to own a vacation property on the beach. However, you do not want to be burdened with upkeep, and you do not have the large down payment that is necessary for you to buy your dream home. To get around these limitations, you might buy a fraction of a property through a management company. The property would be split between yourself and other partial owners. Each party would get time each year during which they could occupy the home. Any time that you did not spend in the house during your allotted time could be rented out through the management company or on your own. Fractional ownership may be possible for more conventional homes if you get creative with a real estate lawyer and have enough interested buyers to move forward.

Other Trends in Real Estate

Beyond fractional ownership, there are more trends in modern real estate. One of the most highly-discussed is the use of blockchain tech, which allows companies like Propy to use automated smart contracts. These blockchain-driven processes can cut down on the cost and time of the typical real estate transaction, and they make it possible to buy homes in less than a day with a variety of currencies, even Bitcoin.

The real estate market is full of new ways of doing business. Whether fractional ownership, distributed ledgers and blockchain tech, or some new wave, do your research before buying your next home, or you might miss a technique that could benefit you greatly.

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