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Fractional ownership is a growing trend in real estate investing. It involves people pooling their resources to purchase a home, and has become more and more popular in this ultra-competitive market we are in.

Arrived Homes was recently founded as a way to purchase shares in rental homes where co-owners can earn income, and is backed by Jeff Bezos (founder of Amazon.com). The website features opportunities for just $100, and saw demand 100 times more than expected, causing the site to crash for a few hours during launch. Arrived Homes brokers the sale of shares of homes in which you can co-own part of the real estate. They also offer property management services which includes things such as finding tenants, maintaining the property, and overseeing the dividend payments.

zillow screenshot of a fractional real estate investment opportunity

Pacaso is another such company which offers high-end vacation rentals. But, keep in mind, this is not a new concept. Vacation home sharing began in the late 1980s, but has evolved thanks to the internet and to regulatory changes in 2008. The concept is like a time share, but only involves a single home, and typically allows owners to stay in the home for a week or two each year.

Companies such as Arrived, Pacaso, Groundfloor, Ember, and Fundrise allow you to become a business partner in the purchase of a home by purchasing a portion/fraction as a part-time owner. Dividends are earned through price appreciation and rental income, and can be as much as 10% a year.

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