Fractional home ownership companies buy a minority percentage of a home alongside homebuyers. This equity investment increases in value with the price of the home. Unlike a mortgage, this investment is not a loan, but instead a percentage ownership in the value of the home
Fractional home ownership helps create more buyers in a market. Many buyers may not have the cash available for a downpayment. Fractional home ownership companies often provide first time buyers access to capital that they may not get through a mortgage alone.
Fractional home ownership companies make money primarily through the appreciation in value of homes they invest in prior to sale. Often they invest in the initial home equity at a discount of up to 20% of the home purchase price in order to factor in for risk. As a result, they are often concerned about the potential appreciation in value for a given home, the riskiness of the people buying the home, and likely improvements that the home buyers will make to a property.
Fractional home ownership companies make money through the appreciation in value of homes. They often invest in the initial home equity at a discount of up to 20%. This helps factor in for risk. These companies care about the potential appreciation in value for a given home. But they also assess the riskiness of the people buying the home. There is also upside if the home buyers make improvements to a property.
Unison and Point are both fractional home ownership companies. Some fractional home ownership companies work directly with buyers and sellers. Others provide services to real estate professionals to offer to their clients.