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Fractional real estate ownership has been growing in popularity amongst all investors across the globe. Traditionally, investing in properties was not an avenue for everyone, but thanks to the rising trend of co-ownership, the barriers to entry have dropped significantly.
Moreover, for established investors, fractional ownership offers a chance to diversify their portfolio with an additional asset.
Recent reports show that the fractional ownership market worldwide is expected to grow by an average of 8.3% over the years till 2028.
Currently, the market is valued at close to $5.4 billion, and by 2025, this number is projected to swell to approximately $9 billion.
These statistics showcase a rising trend that is transforming the conventional real estate market as we know it. The trend of co-ownership has particularly picked up in cities where luxury homes are a common occurrence. These places include cities like Miami, Las Vegas, New York, St. George, and numerous others.
Over the past five years, the population of the St. George metro area has increased by over 20%, the number of businesses has grown by more than 30%, and the annual gross domestic product has increased by almost 4%, making it an ideal place to invest in fractional real estate.
Now, you can turn your dream of owning a property with an infinity pool overlooking the city where you reside into a reality.
Let’s take a look at some of the benefits that come with co-owning a luxury home nowadays:
1. Low Barriers to Entry
As the fractional real estate market continues to grow, more and more people are discovering the low barriers to entry that come with investing in co-ownership.
Moreover, even new players are venturing into the market and building real estate portfolios that generate rental income and offer annual gains too.
For instance, co-owning a few St. George vacation rentals can give you access to a revenue stream that can count as passive income.
Since St. George, Utah, is a popular tourist destination for lavish family getaways and corporate retreats, you can expect higher rental yields.
Investments can start as low as a few hundred dollars which is an affordable number for almost every individual.
Moreover, there are mainstream platforms these days that make investments even simpler by having a vast portfolio of properties that you can pick from and invest in with just a few taps on your phone from anywhere in the world.
2. Hassle-free Financial Gains for Property Owners
The beauty of co-ownership is that it is beneficial to all stakeholders.
A luxury home is an asset that becomes the center of many of your fondest memories.
If you own a property already, it is obvious that you cherish it, but there are the hassles of maintenance and additional costs associated with it.
- Naturally, you can’t open the home to a plethora of short-term renters because there are high chance most people will not treat the property with the respect it deserves.
- On the other hand, selling stakes or fractional ownership of the home means that you generate income and share the property with people who buy a part of it. These individuals will obviously consider the home as their own since they have a stake in it.
- As a result, they will take the utmost care when visiting the property, and you won’t have to worry about costly damages, repairs, or high maintenance bills from time to time.
3. Variable Rights of Usage
With fractional ownership, no one person holds the entire possession of the home. The percentage of ownership varies depending on who has invested how much. The stake of each individual also determines their respective usage rights, which can be flexible.
A person with 10% ownership, therefore, has fewer usage rights than someone with a 40% stake in the home. Although this may not sound like a benefit to someone with a smaller ownership percentage, it is because it offers equitable usage of the property to each owner.
- The luxury home remains available to everyone as long as their bookings to use it don’t overlap. Moreover, having an intermediary handle the fractional sale of the house means that you get to enjoy the place without having to worry about periodic maintenance.
- Statistics show that co-owned homes have higher occupancy rates than individually held properties. To be more precise, the average vacation home is used only about 11% percent during a year, whereas for a fractionally owned property, this rate is 90% or higher usually.
4. All the Fun, None of the Hassle
Nowadays, fractional ownership is offered through various platforms that play the role of an intermediary. What these platforms do for you is handle the administrative and management side of property ownership while you sit back and enjoy the experience.
This is a huge benefit where you get access to a luxury home without worrying about any additional maintenance costs that come with it.
Any person who has owned a luxury home will know that cleaning and overhead costs are the biggest bills associated with ownership.
- You only visit the property once or twice a year but pay throughout the year to keep it in proper functioning order.
- In co-ownership managed by a third-party platform, these issues are simply taken out of the equation, leaving you with nothing but the enjoyment that comes with luxury home ownership.
5. Comfort and privacy
Luxury home ownership is a privilege that a select few have enjoyed. Now, thanks to co-ownership, this is no longer true because almost everyone can invest and purchase a stake in a luxury home.
And why exactly would you do that? Well, for the lavish experience that comes with it. You can enjoy unparalleled luxury, comfort, and privacy when you vacation with your family or friends.
No hotel stay can compare to the experience that you enjoy when staying at your own place. Not only are you satisfied that it is a personal space where you can do whatever you want, but you also rest assured that you always have the utmost privacy.
Whether you want breakfast in bed or privately take a dip in the pool late at night, you can do whatever your heart desires.
Conclusion
Luxury homes have often been a milestone that most of us want to achieve. However, the million-dollar price tags keep most people at bay.
Now, thanks to the concept of co-ownership, you get to enjoy all the perks, privileges, and benefits that come with luxury home ownership without having to shell out an obscene amount of money that you don’t have in the first place.
Get to explore more about fractional ownership today, and you won’t be left disappointed.
