Fractionalized Real Estate Investing Is Heating Up - Why Early Investors Will Likely See The Greatest Gains

Real estate investing has been a popular method of building wealth for generations. However, this asset class really became mainstream when infomercials began promoting ways to invest in real estate with no money down and reality TV shows like A&E’s Flip This House made the distressed property down the street look like a goldmine.

Unfortunately, many investors quickly realized that investing in real estate comes with a lot more headaches and potential downfalls than the infomercials and reality series lead on.

There’s no question that real estate investing has tremendous benefits, but building a successful real estate empire can take a lot more time, energy and money than the average investor has available.

The Rise of Fractional Real Estate Investing

Individual investors no longer have to hunt down deals, oversee inspections or take on the headaches that come with managing investment properties. Instead, investors can simply purchase shares of properties that already have experienced investment firms and asset managers handling the process of closing the deals and taking care of the day-to-day operations.

Fractional real estate investments are giving the average investor a way to start building a cash flowing real estate portfolio without the risk of getting in over their heads with managing construction, finding tenants or taking late-night phone calls when a drain gets clogged.

One platform that’s leading this new investment strategy is Arrived Homes. The company acquires single-family rental properties across the country and allows retail investors to purchase shares of these properties with a minimum investment of $100.

Arrived Homes takes care of sourcing the deals, finding tenants and dealing with all of the landlord responsibilities while investors collect passive income.

Investors receive quarterly dividends from each rental property in their portfolio while waiting for the home to appreciate in value over time. Arrived Homes also adds new properties every few weeks, so it’s easy for investors to continue growing their real estate portfolio.

View current rental property offerings on Arrived Homes

Why Early Investors Will Likely Realize The Greatest Gains

There are two trends emerging in the residential real estate market right now; private equity firms and hedge funds are buying more properties, and retail investors are creating greater demand in the fractional real estate space.

Both of these trends are likely to lead to further increases in real estate prices and rental rates. While many have been expecting foreclosures to burst the real estate bubble, private equity firms are now buying these properties before they have a chance to affect the market. This means property values will likely either remain stable or continue moving upward.

Real estate can be a solid investment during any market cycle, but investors can likely capture a larger share of future gains by acting sooner rather than later and diversifying their portfolios with fractional real estate.

Photo by Breno Assis on Unsplash