Fractured – Fractional Real Estate Investment
Image courtesy of Freepik
It is now possible for investors to purchase only a small fraction of a single-family home, rather than the entire property [1].
Online Platforms
An increasing number of online platforms facilitate this, including Arrived Homes sponsored by Jeff Bezos [2][3][4][5]. Some allow investments as low as $100, manage the rental property, and deduct fees from rental income.
A “Stepping Stone” to Wealth
Fractional investment is being positioned as passive income, and a “stepping stone” to wealth for those who would otherwise be closed out of the real estate market. It allows new investors to assess the costs of being a landlord without requiring a significant down payment on their part.
Downside for Renters
There is, however, a downside.
In order for fractional real estate investors to profit, maintenance and repair costs must be minimized, and rents increased. As a result, maintenance and repairs are often cut to the bone, to the detriment of renters.
Last year an investigation by the Washington Post revealed that Invitation Homes, one of the largest corporate landlords in the United States, bought and renovated thousands of rental properties without the requisite permits, leading to shoddy workmanship that put renters at risk [6].
Meanwhile, eviction is accelerated under the fractional investment model, and may be pursued if rent is even a day late.
All this is bound to impact the 44 million families who rent.
Our Neighbors as Ourselves
“And you shall love the Lord your God with all your heart, with all your soul, with all your mind, and with all your strength.’ This is the first commandment. And the second, like it, is this: ‘You shall love your neighbor as yourself.’ There is no other commandment greater than these” (Mark 12: 30-31).
Just as neighborhoods are comprised of more than brick and mortar, neighbors are, themselves, more than investment commodities, more than mere stepping stones to our own advancement.
Though it may be possible for us to profit from them financially, we must as Christians ask ourselves whether that is the right thing to do.
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[1] Vox, “You can now buy a fraction of a house. Should you?” by Whizy Kim, 3/3/23, https://www.vox.com/money/23620847/fractional-real-estate-investing-trend.
[2] Arrived Homes, “Easily Invest in Rental Homes and Vacation Rentals”, https://arrived.com.
[3] Yieldstreet, “Discover private real estate investing”, https://www.yieldstreet.com/real-estate-investing/.
[4] Fundrise, “Passive Real Estate Investing – Invest with as Little as $10”, https://www.fundrise.com.
[5] CrowdStreet, “Crowdsource Real Estate Online – Invest in Multifamily”, https://www.crowdstreet.com.
[6] Washington Post, “At Invitation Homes, unpermitted work leaves leaky plumbing, faulty repairs, renters say” by Jonathan O’Connell/Peter Whoriskey/Kevin Schaul, 7/12/22, https://www.washingtonpost.com/business/2022/07/12/invitation-homes-corporate-landlord-permits/.
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A Lawyer's Prayers 
Du hast einen sehr interessanten Beitrag über den Wert der guter Nachbarschaft, die immer auch in schwierigen Situationen, wie bei der Möglichkeiten des Hausbaus u.a. hilft. Liebe Grüße, Marie
Danke für deine netten Worte, Marie. Die moderne Welt stellt uns oft vor schwierige Entscheidungen. Liebe Grüße, A. ❤
Interesting post Anna.
I did not know about this type of investment..
I was surprised to see the number of blighted properties available in the U.S.
These homes are abandoned or foreclosed in rough neighborhoods..
In VT a faction bought drug seized and blighted property and now it is used as low income housing.. Although they were brought up to code, they are not a quiet and enjoyable place to live.
Thank you for your thoughtful comment, Mary. Urban renewal is certainly a laudable goal. I lived in Philadelphia for 20 years. The beautiful but dilapidated Victorian homes in the “inner city” were vivid symbols of the all too often forgotten poor. Of course, as you say, housing alone — even housing up to code — is not enough. Our society is broken. Fundamental change would require repentance and a return to God.
A question that is rarely asked, but should be. The “own nothing and be happy” model only ends up profiting the few.