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In a scenario where the real estate market is increasingly inaccessible to many, an emerging trend is emerging that offers an alternative and innovative solution: the so-called ‘fractional ownership.’ This concept, which has gained traction globally, allows investors to acquire a fraction of a property, rather than purchasing the entire property.
Fractional ownership refers to the situation where distinct portions of an asset or property are owned by different individuals or entities, rather than a single owner holding complete ownership. Each owner owns a fraction of the property, usually for weeks or months, and shares the use and associated costs with other co-owners.
This model has especially attracted those who wish to invest in high-value properties, actively enjoying the benefits, without assuming all the financial burdens associated with full ownership.
In the United States, where a shortage of affordable housing and rising interest rates have made it difficult to buy homes, fractional ownership has become particularly attractive. With the average price of family homes approaching $400,000, many individuals are excluded from the traditional property buying and selling market, reports Wired.
Thus, companies such as Pacaso, Arrived, Lofty and Mogul emerged as a response to this demand, offering investment opportunities in real estate at a fraction of the traditional cost. These companies allow investors to buy shares or tokens in properties with investments as low as 50 euros, democratizing access to a historically elite market.
Despite concerns about a lack of control over property management and the associated financial risks, many see fractional ownership as a way to make the housing market more accessible and inclusive.
Nancy, an investor who shares a luxury home in Vail, Colorado, with other co-owners, describes the experience as a way to enjoy the benefits of a vacation home without the burden of maintenance and repairs. “When I go there, I feel like it’s really ours,” she says.
While fractional ownership offers clear advantages, it is not without its challenges. Critics argue that this trend could intensify the commodification of housing and worsen the housing crisis by putting residential ownership beyond the reach of ordinary people.
