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Fractional ownership – an alternative residential property investment vehicle

Braam Lowies (School of Commerce, University of South Australia, Adelaide, Australia)
Robert Brenton Whait (School of Commerce, University of South Australia, Adelaide, Australia)
Christa Viljoen (School of Commerce, University of South Australia, Adelaide, Australia)
Stanley McGreal (Built Environment Research Institute, University of Ulster, Belfast, UK)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 10 July 2018

Issue publication date: 27 November 2018

907

Abstract

Purpose

The purpose of this paper is to determine the profile of the typical online fractional residential property investor in Australia. This study also seeks to understand the motives for engaging with and investing in alternative residential property investments.

Design/methodology/approach

This study employs a survey-based design via an online questionnaire to gather information on investor age, gender, type, education levels, time horizons and investment history and risk and return expectations. It also gathers information regarding investors’ financial literacy including tax implications of fractional property investment.

Findings

The findings of this study suggest amongst others, that fractional property investors tend to be younger, although the platform also attracts older investors including older females. The study also found that investors do not select alternative investment platforms in anticipation of super-normal investment returns. Return expectations are realistic and are based on a balance between capital growth and income.

Practical implications

This study indicates that alternative investment platforms lowers the barriers of entry into residential property for first time investors. It therefore creates opportunities to allow many first time individual investors to invest in property, often as an alternative to bank savings or investing in the stock market.

Originality/value

This study enhances our understanding of the influence of alternative investment platforms on investment decision-making. More specifically, it contrasts fractional property investment with more traditional investment opportunities to understand the motives of investors for diversifying into online investment vehicles.

Keywords

Citation

Lowies, B., Whait, R.B., Viljoen, C. and McGreal, S. (2018), "Fractional ownership – an alternative residential property investment vehicle", Journal of Property Investment & Finance, Vol. 36 No. 6, pp. 513-522. https://doi.org/10.1108/JPIF-02-2018-0013

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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