What do we mean by “Fractional Property Investment”?
In traditional property investment, the investor buys an investment property and receives rent from their tenants living there. In fractional property investment, the investor buys a portion or a “fraction” of an investment property.
Much like owning units in a managed fund, fractional property investment means the investor owns a “share of” the property. They are entitled to a portion of the rent from the tenants at the property, and a portion of the property value if it is sold.
Fractional property investment sometimes also gives the investor the right to use the property for a certain amount of time each year if they wish, making it similar to – but not the same as – a timeshare scheme. In a timeshare scheme, a person owns the right to use the property for a certain amount of time each year, but they don’t necessarily own any right of ownership over the property.
You can review Fractional Property Investment solution options via WealthBricks, here.
Types of Fractional Property Investment solutions available
Some examples of solutions available for fractional property investment are as follows.
BrickX is an online platform for investing in residential property in Australia. It is currently available to wholesale investors only.
- Allows you to obtain a beneficial interest in one or more residential properties by buying ‘Bricks’ in a unit trust that holds the property you are interested in.
- A ‘Brick’ gives the holder a proportional entitlement to any benefits generated from the underlying property after the payment of all costs. Hassle-free property management.
- There is no minimum investment in ‘Bricks’. The maximum number of ‘Bricks’ an investor may hold in any BrickX unit trust is 5%.
BrickX describes its mission as providing easy access to the Australian residential property market.
The DomaCom Fund allows investors to select and invest in specific properties using a fractional or crowd-funding process within a Managed Investment Scheme (MIS) structure.
- Regulated as a managed fund.
- Investors can invest in properties of their choice in Australia without purchasing the whole property.
- Low initial investment amounts make for easy entry.
The DomaCom Fund also offers the Bookbuild process for crowd-funding and syndication of embedded property, which enables investors to pool funds together to invest in any property for sale in Australia.
You can compare Fractional Property Investment solution options via WealthBricks, here