If you’re in the market for an investment property but finding prices a little on the steep side, there’s a new disruptive trend to consider – fragmented ownership.
New proptech startups like Bricklet, make it possible to purchase a slice of a property that is co-owned with others.
You could own one-tenth of a house with nine others, for example – and that means you don’t have to sink hundreds of thousands of dollars into a single building to be a property investor.
Smart investors are laying bets across the residential and commercial sectors by purchasing fragments of properties in areas that they believe will experience strong rising prices.
Property titles are issued for each fragment of a property, which means that you can sell it whenever you want and do not need the agreement of any other co-owner.
Fragmented Property Ownership, as it is officially known, is already proving popular with Self-Managed Super Funds (SMSF), where a diversity of investments, fiscal stability and liquidity are important.
We’re also starting to see young buyers make their move, as many are unable to afford to buy a property outright. As their fragments rise in value, it gives them the opportunity to one day purchase their own home.
Blockchain underpins the transaction process, so participants in this fledgling market can buy and sell their slices of property ownership online.
It is also possible to sell an existing property in ‘fragments’. This can be a creative way to work with other family members to buy common property.