Fractionalised Real Estate: The New Crypto?

The key point of appeal when it comes to some of the most expensive cryptocurrencies, such as Bitcoin (BTC), is that they have historically grown tremendously. However, they do not require anyone to spend thousands of dollars in order to get them.

Specifically, through leveraging the power of an online cryptocurrency exchange or a brokerage, users can buy a fraction of the Bitcoin cryptocurrency.

What this means is that they do not have to own an entire 1 BTC, for example, worth thousands of dollars, but can buy BTC worth a specific amount, such as $100 or $500, for example.

This significantly lowers the barrier of entry when accessing the blockchain and cryptocurrency space and provides anyone, no matter their financial situation and capital, access to the asset in question.

Fractionalised real estate takes this concept, except that it brings it to the world of real estate, where someone can just buy a specific percentage of a home, for example, and gain the benefits.

Today, we will be jumping deep into everything you need to know surrounding Fractionalised real estate.

What is Fractionalised Real Estate?

Fractionalised real estate is essentially any type of investment that is actually owned by a multitude of different parties.

In other words, this is percentage ownership within an asset. The fractional ownership shares in the asset can be sold to individual shareholders, all of which will share the benefits of the asset, such as the rights to its usage, income sharing, priority access as well as reduced rates.

Typically, this is a form of investment utilized to purchase expensive assets, such as homes.

How Does Fractionalised Real Estate Work?

Fractionalised real estate works by enabling each person the opportunity to co-own real estate with either friends or investment communities.

They can build their network, collaborate on deals, and manage real estate on a fractional level.

What this means is that instead of needing to buy an entire home, or an apartment, worth thousands of dollars, all they need to do is fulfill a minimum investment amount, which can be just a few hundreds of dollars, for example, where they will be able to own a specific percentage of a home.

This gives these individuals numerous benefits, as they can own parts of multiple properties and reduce their overall risk.

They can learn from their partners in the investment, see how and why they make specific decisions and get real-world experience in investing in properties.

Fractional ownership is an investment approach that essentially allows the cost of a specific asset to get split between individual shareholders.

These shareholders can share the benefits of the asset, such as usage rights, income sharing, reduced rates, or priority access, all of which are received by the fractional owners.

Is Fractionalised Real Estate The New Crypto?

Fractionalised real estate does indeed share some of the benefits typically found in crypto.

Suppose a person, for example, wants to be an investor within a specific property. In that case, however, they do not have a massive amount of cash or capital upfront to invest in or the time to look through, find, purchase and maintain a property that they intend to rent out; in that case, fractional real estate ownership can be a solid investment opportunity for them.

Specifically, with fractional ownership, similarly to cryptocurrencies, you do not need a large down payment or perfect credit to enter the market.

All you have to do is purchase a specific share in the property, just as you would buy a fraction of a cryptocurrency for a small amount, and add more to that percentage as your available funds and capital increase.

The transaction cost associated with a fractional transaction will typically be a lot lower as well.

Additionally, with a management company or software solution that can handle both the purchase and financing of the overall property, similarly to how cryptocurrencies have cryptocurrency exchanges or brokerages, all of this can be streamlined and will allow anyone to get started without the need to do extensive research or learning in order to begin the overall process.

Furthermore, within the crypto space, typically, investors are advised to essentially diversify their portfolio, or in other words, to not put all of their money within a single cryptocurrency.

This means that they can buy a percentage of as many cryptocurrencies as they want to, and for example, aside from Bitcoin (BTC), they own Ethereum (ETH), XRP (XRP), BNB (BNB), Cardano (ADA) and Solana (SOL), and essentially gain the benefit of each cryptocurrency in the process. In the case of fractional ownership of the real estate, it provides investors with the opportunity to diversify their real estate portfolio and mitigate the risk without needing a lot of capital.

They can invest a specific percentage of their capital within multiple properties, spread out throughout different suburbs or cities, for example, and as such gain the benefits of each one of them individually, which reduces the overall risk as well. This contributes towards enabling investors with a high level of flexibility and allows them to invest in different locations, property types, and markets, which for new investors specifically allows for a high level of experimentation and risk management which is not possible in the case of single-owner investments.

Moving Forward with Fractionalised Real Estate

Hopefully, now you know a bit more about Fractionalised Real Estate and how closely it can resemble cryptocurrencies and digital assets in some cases.

With blockchain technology, you can even gain access to fractional ownership through tokenization, which can disrupt the traditional real estate sector.

In any case, it is clear that real estate is taking a similar direction to cryptocurrencies, and this is opening the way for more people than ever before to access real estate investments and build up their portfolio of investments through numerous property types.

If you are curious towards new ways through which you can invest your capital in a smart and efficient way, Fractionalised Real Estate might be your go-to option.

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