How Millennial Women Are Using Fractional Real Estate Investing To Diversify Their Portfolios

The ability to invest your money can come in many shapes and sizes. For women looking for a smaller barrier to entry, fractional real estate investing might be the vehicle for you. This method of investing is quickly gaining popularity. Mainly because it offers a more accessible, diversified, and flexible path to property ownership and a diverse portfolio.

According to an article on City National Bank’s website, there’s a strong connection between home ownership and wealth, at least in the United States. Millennial women are using fractional real estate investing to circumvent the traditional way of buying real estate. Prior to, an investor looking to acquire ownership in real estate would have to absorb all associated costs. Including the purchase of the property, taxes, maintenance, insurance, and more.

Currently, with fractional real estate investing, the costs are shared, and the barriers to entry are lower. This reduces the need for large amounts of capital. An additional perk of this method is that your risks are minimized by sharing the burden across several different owners, not just you.

Women interested in allocating part of their investment portfolios to fractional real estate investing might not know exactly where to look or how to get started. Turning to professionals who have already done it might be the best example. Real Estate Investment Company, Real Bricks, makes it possible for fractional ownership by providing more control over the properties you are investing in. According to Real Bricks’ website, fractional investing is an alternative option to investing in REITs (Real Estate Investment Trusts) because investors can choose exactly which properties they want. In contrast, REIT investors invest in a managed portfolio that includes numerous pre-selected properties.

Mitigating risk without a lot of capital is one benefit of investing in fractional real estate. Diversification of your real estate portfolio is another great benefit of fractional ownership. According to an article in Arrived, investing in different locations, property types, and markets allows for diverse portfolios. Others may find the level of experimentation that is not possible with single-owner investments attractive as well.

Fractional real estate investing not only allows you to diversify the types of real estate investments in your portfolio, but also allows you to use this method of investing in tandem with more popular methods of investing, such as the stock market, gold, crypto, and private equity.

Unlike timeshares, which grant limited usage rights, fractional ownership provides actual equity in the property. According to an article on BHSUSA.com, a real estate investment company, fractional shares can grow in value and be sold or transferred, just like traditional real estate. In contrast, according to The US Securities and Exchange Commission, a REIT buys and develops properties primarily to operate them as part of its own investment portfolio.

Both timeshares and REITs function by utilizing real estate, but operate in two completely different ways. Timeshares grant usage for an allocated time in a designated space. According to the Securities and Exchange website, REITs are a company that owns income-producing real estate (e.g., apartment or commercial buildings) or real estate-related debt (e.g., mortgages). Publicly traded REITs have their securities registered with the SEC. Securities are listed for trading on the NYSE or NASDAQ exchange. 

Millennial women are using fractional real estate investing to diversify their portfolios. This method of investing offers acceptability to people with smaller amounts of capital, flexibility for individuals looking for more control, and diversity for people looking to experiment with different assets.

This article is intended solely for informational purposes and does not constitute tax, legal, or financial advice. The content provided here is not a substitute for professional advice from a qualified tax advisor, attorney, or financial planner. Readers are encouraged to consult with a licensed tax professional. Also, connect with a legal advisor to obtain advice tailored to their specific circumstances. It is important to ensure compliance with applicable laws and regulations.