If you are a small investor, fractional ownership can be a good way to earn revenue. This trend is most common in commercial real estate but can be seen in residential properties too. With all the benefits, fractional real estate ownership also has some downsides to it.
Ability to buy higher quality real estate- Fractional real estate opens the opportunity to purchase higher quality real estate that you wouldn’t be able to purchase by yourself. As many people are contributing to the property, you get to be the owner as well as others.
Less responsibility- Fractional estate ownership gives you the option of less taking care of the property. Maximum properties are commercial real estate, so the maintenance is done by the tenant. And the rest is so little that it is not time-consuming.
Quite hard to sell- Frictional properties are sold in shares. So, often it is hard to find interested buyers who want to be a part of the property and take care of it. Also, it is stressful to change owners.
Difficult to be on the same idea- As there are multiple owners of a small property, it gets hard to make one decision. Everyone has their opinion and they all want to do the work in their way. The decision can be as small as the color of the wall. So, this becomes an issue when it comes to bigger things.