Why is fractional real estate on the rise?
Real estate should be part of every investment portfolio and fractional real estate investing makes that possible. With Fractional investing in real estate, investors can own a piece of a property and receive a portion of the rental income as dividends, as well as benefit from the property appreciation when they sell their shares.
Millions already invest in real estate due to its many benefits such as cash flow, appreciation in value over time, and as a hedge against inflation. Real estate has proven to be a great investment, with the average sale price of U.S. homes growing from $27,000 in 1970 to $514,100 in 2022, according to the St. Louis Fed.
The most common reason that many people do not invest in real estate is:
- It’s a complex process to navigate through
- It generally requires a large upfront amount of cash
- For many deal structures, the investor’s money is tied up for several years
However, fractional real estate investing solves these problems. With fractional real estate investing, investors can invest in real estate with as little as $50, and in a matter of minutes obtain an ownership position in a single property. This ownership position enables the investor to start receiving monthly passive income that’s generated from the rent.
Fractional real estate investing has been around for over a decade, but the biggest issue was providing liquidity. People could easily buy into a position, but there weren’t simple ways to exit a position.
Fintor solves this problem. Fintor allows you to buy shares of property, similar to buying shares of a company, and have the opportunity to sell the shares on Fintor’s secondary market. Since the ownership is in the form of shares, with anticipated fluctuating share prices over time, you can potentially make additional money if your share price increases. Fintor launched in 2022, and has some great features:
- A low minimum investment amount
- A simplified and streamlined process
- The ability to easily exit from a position
In light of recent financial events like FTX, it’s important to conduct diligence around any company. I looked into Fintor and they are SEC-qualified and registered, which ensures that all investor accounts are encrypted and protected. Also worth noting, because you are investing directly into a real estate asset, and a company, there is protection in the event that Fintor were to ever go bankrupt.
With the ongoing great migration, it is important to understand that not all real estate markets are equal and diversification is key to a successful investment strategy. Currently, you can invest in Nashville, Atlanta, Birmingham, and Huntsville, with more markets coming. Fintor pre-screens and underwrites each property for its cash flow and growth potential, then directly buys the property, and oversees any necessary repairs and renovation. They partner with an established third-party property manager to oversee the property.
Traditional real estate investments can require a large upfront amount of cash, so this low barrier to entry is great for those who want to start investing in real estate, but can’t due to the high upfront costs or a lack of knowledge about real estate markets. My favorite thing about Fintor is the liquidity to easily exit a position and the low minimum investment amount. With Fintor, you can invest in real estate with a smaller initial investment and have the opportunity to receive passive income and potential appreciation in value, over time.
If you enjoyed this read, please follow me here on medium & clap/ like this article.
#RealEstate #RealEstateInvesting
