For the Big Picture Investor
For years, real estate was presented as a reliable, predictable investment. It was seen as an investment with little downside risk. After all, it has tax advantages (reduced or zero capital gain taxes, mortgage interest write-offs, rental property tax considerations, 1031 property exchanges), it could be easily leveraged (with bank money) and real estate with limited supply (like lakeshore) made it even more attractive. For these reasons, real estate became increasingly speculative and some people put too much of their portfolio into real estate.
As you have undoubtedly noticed, the real estate market has changed. Today, the same dynamics exist to help make real estate attractive – especially for lakeshore real estate – but the wildly speculative nature has changed. Investors have stopped to re-evaluate exactly how much of their portfolio it makes sense for them to dedicate to real estate. In addition, people who buy homes and vacation homes are coming to appreciate the real reason for their homes. Beyond providing basic shelter, homes and vacation homes are the places we experience our best memories with our families.
Fractional Real Estate aligns the logical desire to have a place to create lasting memories while also allowing people to limit the amount of their portfolio dedicated to real estate.
Please note that real estate cannot be marketed as an investment and the discussion above should not be interpreted as an explanation why Fractional Real Estate is a good investment. Rather, this discussion should be viewed as an explanation of the historical perspective of real estate and where Fractional Real Estate fits in the changed real estate landscape.