What is Fractional Investing?

As of the writing of this article, housing prices are at all time highs, competition to purchase them has never been tougher, and it seems impossible for millions of people that they’ll ever get out of the “renting” phase.

Buying a house isn’t just an achievement you’re trying to unlock like a video game, the reason buying Real Estate is so important is because it is the #1 wealth building tool that anyone has access to (or at least that they should have access to). By buying Real Estate, you’re essentially opening a savings account with a high rate of return (appreciation) that you can take advantage of over the course of the rest of your life. The earlier someone buys a house and the longer they own it, the higher their net worth is more likely to be.

So what are you supposed to do if you can’t afford one?

That’s where Fractional Investment comes in. Fractional investment is a relatively new avenue of investing in Real Estate due to changes in what is allowed by the SEC. These changes give anyone the ability to purchase Real Estate in small pieces from platforms like Fundhomes in order to give everyone access to the same returns as Hedge Funds and Investment Banks that buy and operate Real Estate for a return.

In this case you won’t be able to live inside the property, but you’ll still receive cash dividends and the appreciation value of the property. These advantages can help you grow wealth faster than you’d otherwise be able to, and can help grow your savings into a down payment of your own!

Just like investing in a house, it’s important to remember that sometimes investments lose value in unforeseen market conditions. Although Real Estate has traditionally been considered a safe investment, there have been declines in value during some recessions. Make sure to invest responsibly and do your research before deciding on any investment.

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