You don’t have to be a Miami property attorney to be affected by real estate investments, and you certainly don’t need to find an “estate lawyer near me” to understand the principles behind fractional investments. The experts at the firm of Arturo R. Alfonso, P.A., are here to guide you through fractional investments so that you can make wise decisions in the future.
How A Property Attorney Understands Fractional Investment
Real estate has been a monumental source of income for investors in modern times. As property values increase, however, the number of investors diminishes; as the stakes of the game get higher, the number of players decreases. In order to include more investors and scaffold those with fewer means, fractional investment divides the financial ownership of high-end real estate to diverse investors. This strategy expands the pool of investors and incorporates new capital into a single piece of estate property. New investors benefit from this model by securing a piece of the “pie” without lowering the property value and disadvantaging wealthier investors.
One Example Of Fractional Investment: Vacation Homes
If you need a real-life example of how fractional investment works, consider vacation homes. A single-family typically takes a vacation seldom throughout the year, maybe once or twice. If their vacation locale of choice is a top tourist destination, they may be unable to afford a second home there. Instead, the family could sign up for a fractional investment plan, or vacation home, in which the investment for the home is split among multiple families. By sharing the cost of investment, each family is responsible for only a manageable amount of maintenance fees and a reduced risk of loss. Participating in this type of fractional investment may open the door for a young investor to expand his or her assets and take on more real estate.
Fractional Investment In Commercial Properties
When investing in commercial properties, you have two options: a Tenancy-in-Common or a Delaware Statutory trust. In a TIC, the number of possible investors is limited by the IRS to 35, but each investor is responsible for a percentage of property maintenance and expenses. Although “many hands make light work,” there can also be “too many cooks in the kitchen,” and crowded ownership can impede important financing decisions down the road. In contrast, a DST presents a “beneficial interest” to an unlimited number of owners and operates independently of its investors. With a DST, you can opt for a smaller share from a diversified pool of investors without having to coordinate with all of them. If you want to get started investing in high-end real estate, don’t lazily look for an “estate lawyer near me”; do your research and find the type of investment and the type of property you think best fits your financial situation.
If you need a property attorney to guide you through the world of fractional investment, look no further than the offices of Arturo R. Alfonso, PA in Miami. We offer much more than your average “estate lawyer near me”; we can provide professional consultation on all your estate and property inquiries. Call us today!