Top Benefits of Owning 100% of an Investment Property Over a Fraction of It

One of the most common misconceptions about Doorvest is that we have partial ownership of the investment property once we sell to customers - this is untrue. The customer, or Doorvestor, will always own 100% of their rental property. In addition, Doorvest will take over long-term property management for a 10% fee, including a 1-year rent guarantee and renovation guarantee.

While owning a fraction of a rental property has many benefits, it’s not always preferable and is not Doorvest’s preference. However, owning an investment property outright still has its advantage, which we will discuss below.

Pros and Cons of Full Investment Property Ownership

So many people love owning a property outright due to the control and flexibility one has as the owner. There is more control over certain aspects of the home, like deciding when to sell or turning the investment property into your primary residence. Along the same lines, the income potential is also more significant with the opportunity to increase rents over the years.

The key difference between investing in property outright vs. fractional is that the initial investment needed is much larger due to the 20% minimum required for the down payment while owning a fraction of a home can be a smaller investment.

Pros and Cons of Fractional Investment Property Ownership

On the other hand, the lower minimum investment to get your feet wet with real estate makes fractional ownership exciting for some people. When assets are pooled together, you will not have direct management authority, and your decision-making ability becomes weakened. Less ownership means less control.

The other key difference between fractional ownership vs. owning a property outright is that you can spread the risk and reduce your risk exposure due to the diversification or smaller investment. While this is great, you may limit yourself in terms of growth.

Conclusion

In the past few years, many companies are now offering fractional ownership of various real estate (commercial, single-family, multi-family, and even vacation rentals). We love this model and plan to launch our fractional ownership arm of the business in our long-term plans. However, there are many benefits of owning a property outright, which is why we love enabling many of our customers to own single-family homes 100%.