fractional ownership luxury yacht

Fractional Ownership of Luxurious Yachts

Own a luxurious private yacht, at a fraction of the cost, right-size your ownership.

If you only have time to enjoy your yacht part of the year, then why own it the whole year? Right-sizing your ownership to the portion you want to use dramatically reduces your purchase price, enables you to buy into a much bigger and more luxurious yacht, and eliminates wasted capital.

We have 1/4, 1/6 and 1/8th fractional ownership options available on magnificent yachts of varying sizes. You decide how much you want to own.

Only pay a down-payment

We offer financing of up to 80% of your share. Combine this with right-sized ownership and your purchase price could be as little as 2 ½ percent of the yacht’s value. Imagine the kind of yacht you suddenly can afford…

A ten million dollar yacht can be had for just a quarter million, and a million dollar yacht for just twenty-five thousand, while enjoying weeks on end at enchanting destinations.

Never pay anything else

Owning a yacht is expensive. Crew salaries, maintenance and mooring, insurance and repairs, it all adds up.

But yachts can be profitable too. By renting out your yacht—chartering as it’s called—you can generate a generous income. In fact, we make chartering your yacht so profitable it usually pays for all expenses, often even your loan payments. So other than your down-payment in most instances, you’ll never pay anything else to own your very own luxury yacht.

20% DOWN ON 1/8 OWNERSHIP = 2.5% OF THE YACHT'S VALUE AN $8M YACHT @ 2.5% = $200K A $1M YACHT @ 2.5% = $25K

In most instances your only expense is the down-payment all other expenses, including loan payments, are typically paid for by the charter revenue big yachts suddenly become very affordable, featured yachts.

Browse our selection of wow-worthy yachts in the most desirable destinations

MEDITERRANEAN IN SUMMER & CARIBBEAN IN WINTER

  2 shares left  , 2018 sunreef 60, 60ft | 4 staterooms | 3 crew.

Sunreef manufactures the most luxurious of sailing and motor catamarans, and this Sunreef 60 is no exception.

With four state rooms plus crew quarters for three, expect to set sail with the whole family in ultimate luxury. Your captain, chef and bosun are ready to welcome you onboard. 

$75,000 • 1/6 OWNERSHIP • INCLUDES 3 WKS ONBOARD PER YEAR

2016 leopard 58, 58ft | 4 staterooms | 2 crew.

Welcome aboard the tremendously spacious Leopard 58 sailing catamaran. She offers more living space than any other catamaran her size. Perfect for an extended adventure with friends and family.

$55,000 • 1/4 OWNERSHIP • INCLUDES 4 WKS ONBOARD PER YEAR

Sold - 2017 lagoon 620, 62ft | 4 staterooms | 2 crew.

This extravagant Lagoon 620 sailing catamaran has been fully optioned, plus custom additions such as underwater lighting and a tender lift.

Detailed with soft finishes throughout, she is one of a kind.

$55,000 • 1/6 OWNERSHIP • INCLUDES 3 WKS ONBOARD PER YEAR

Sold 2018 lagoon 560.

This very spacious Lagoon 560 sailing catamaran has been fully optioned, plus custom additions such as underwater lighting and a tender lift.

Finished in a beautiful dark wood, she oozes luxury.

$55,000 • 1/5 OWNERSHIP • INCLUDES 4 WKS ONBOARD PER YEAR

2024 sunreef 80, 80ft | 4 staterooms | 3 crew.

Sunreef manufactures the most luxurious of sailing and motor catamarans, and this Sunreef 80 is the most opulent yet.

With four state rooms including a massive master, plus crew quarters for three, expect to set sail with the whole family in ultimate luxury. Your captain, chef and bosun are ready to welcome you onboard.

$250,000 • 1/6 OWNERSHIP • INCLUDES 3 WKS ONBOARD PER YEAR

  sold  , 2019 sunreef 60, 60ft | 5 staterooms | 3 crew.

With five state rooms plus crew quarters for three, expect to set sail with the whole family in ultimate luxury. Your captain, chef and bosun are ready to welcome you onboard.

$85,000 • 1/6 OWNERSHIP • INCLUDES 3 WKS ONBOARD PER YEAR

You are buying a real asset. Your yacht gets titled to its own single-asset LLC, which you own, along with any other fractional owners. This means your investment is backed by a real asset, you can benefit from tax write-offs, and at the end of the management term when the yacht is sold, the proceeds are distributed to its owners.

We manage it

You own the yacht, not the headache. We take care of everything, from financing and insurance to crew training and trip planning. When you hear from us, it will be your concierge requesting your food and drink preferences to set the menu for your next trip.

Cheers to you, for buying a yacht the smart way.

Positively cash-flow positive

Owning the yacht without owning the expenses is only possible because of the income we generate on your behalf to pay for everything. Now…

Imagine you bought the whole yacht instead of a fraction, and yet you still only spend a few weeks a year on your private yacht. This opens up much more time to charter the yacht, making the revenue not only pay for all expenses, it becomes a cash-flowing asset.

Depending on the yacht, the cash-on-cash return can be as high as 70% annually.

Owners say it best

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Fractional Yacht Ownership : Everything you Need to Know

Fractional yacht ownership is one of the way to own a yacht that might suit your needs.

For most people, owning a luxury yacht means the freedom to move whenever and wherever they want with maximum comfort. However, it is rare to be able to use it 100% of the time. There are options to counteract the time the boat is not is used, and one of the most profitable and comfortable is fractional ownership.

Shared yacht ownership may be for you. But do you know exactly what it means and entails?

Let’s review the pros and cons of this ownership method to assess whether this can suit you, or whether you should continue chartering yachts or owning one fully .

What is fractional yacht ownership?

Fractional boat ownership is exactly what it sounds like. It allows you to own a part of a yacht for usage time on board. You legally own a piece of it as an asset, and like a company share or a bond, you can sell or transfer it. 

People have been sharing boats through informal partnerships with friends or family members for eons. Fractional boat ownership is simply a formalization of these arrangements which offers you more legal protection in case of conflicts. 

Each owner pays an equity stake in the vessel depending on what percentage of the purchase they want. 

In return, each owner is allotted a set number of days they are allowed to use the boat each year proportionally to their investment. 

On top of the share, the owners have to pay an annual maintenance fee to the management company taking care of managing the calendar, crew, and maintenance of the boat throughout the year.

Fractional boat ownership is different from a time-share which only gives you the rights of property used for a certain amount of time. Once your time is over, your investment also is.

To help you to decide if fractional yacht ownership is right for you, here are the pros and cons you might consider.

The Pros of fractional yacht ownership

By sharing the purchase price, but also the operating and maintenance costs between the owners, fractional boat ownership lightens your investment considerably, allowing you to make serious savings. Financially, but not only.

Fractional boat ownership will also help you to save time on managing different aspects. Indeed, the management company will take care of it – from hiring a crew to coordinating maintenance, to managing the calendar among all owners, to deal with marinas. If you don’t use the yacht, the management company will help you to charter it.

When you use your time aboard, you are free to invite anyone you want. This kind of program is often located in an area, but with the majority of other owner’s agreements, you can cruise the boat in new locations.

If you no longer wish to own a fraction of the yacht, most fractional ownership agreements allow you to easily sell your fractional shares to someone else. Since this kind of program keeps the yachts well-maintained, the value of your share will not devalue so quickly and you’ll be able to more easily change boats than with full ownership.

Furthermore, some fractional ownership organizations maintain fleets that allow you to use a different yacht, enjoy another location, or make up for time lost because of weather or maintenance issues. 

The Cons of fractional yacht ownership

The main drawback of fractional yacht ownership is obviously that you have to share your boat with other owners

Some downsides include that even if you own a part of the yacht, you can’t do whatever you want with it. For example, You can’t personalize a fractionally owned yacht. In fact, you probably won’t have a say on the outfitting or the decoration at all.

You don’t have a lot of flexibility either to use your yacht whenever you want. The yacht isn’t at your disposal all the time and itineraries are planned in a way that you choose your slot in advance. Your last-minute getaways are therefore compromised. 

It also means that the boat might not be available for the particular dates you would like to use it. Read properly the agreement, as some of them allow first come – first served during the unscheduled time if no maintenance is required.

When it comes to moving the yacht, most of the owners have to agree on the destination, so you can be stuck with one area, which can be an issue if you are planning on moving a lot. To relocate your yacht for an extended period of time, you will usually need every owner’s approval. 

On the other hand, most owners may decide to move the boat to an area you don’t particularly like. If you were to charter a boat, you would simply pay a moving fee, but in this case, you are stuck!

Depending on the contract, it is possible that if the majority of the owners want to sell the ship, it can get sold out from under you. So read it carefully!

In fact, the main disadvantage of fractional yacht ownership lies in its name: you only own a portion of the yacht, which means you are not in full control of your property.

Is Fractional yacht ownership for you?

To know  if fractional boat ownership is for you or not, answer these different questions:

• Is it important for you to be in total control of your yacht?
• Do you have time and funds to deal with your yacht’s maintenance costs?
• Are you planning to sail in one area or to explore the world?
• Is having a customized yacht important to you?
• Are you flexible on dates?

Depending on your answers, fractional yacht ownership can be, or not a good option for you.  If you want to save on costs, if you are likely to use it several times throughout the year in one particular region, if you know which boat you want or if you want to invest in a yacht to charter it, then go for shared boat ownership.

For people who don’t want to deal with the hassles of single-ownership, it is also a solution to consider.

On the other hand, people who like changes, whether it’s to try out numerous yachts or to change regions often, are better off sticking with yacht chartering.

For those who don’t want to share and can’t stand the idea of being a co-owner, buying your boat is likely your best option if you can afford it. 

Keep in mind that most fractional yacht ownership programs concern large yachts, like superyachts and mega yachts which require crew. If you enjoy captaining your boat and your friends and family enjoy being the crew, you may lose that aspect of yachting in some way.

The costs of Fractional yacht ownership

You pay your share at the beginning to purchase your portion of the yacht. 

There are no traditional yacht ownership expenses in fractional ownership programs like dockage, moorings, insurance, or boat maintenance costs. But depending on the program you go for, either you will have to pay a certain amount every year to the management company or it will be covered by the charter revenues or a mix of both.

As an example, for a 63-foot yacht with four cabins, some programs offer the cost of the eighth share in the Mediterranean around $180,000 with annual costs for maintenance, crew, insurance, and anchorage around $24,000. Owners will be able to use the boat 4 weeks a year. Another management company offers a California program from $300,000 to $735,000 plus operating costs for quarter shares of vessels ranging from 52 to 82 feet. At this price, the four owners will each be able to use the boat 72 days a year.

The main regions in the world for fractional yacht ownership

Fractional yacht ownership can be done everywhere. 

Popular destinations include Europe, in particular, the Mediterranean and the Caribbean, especially the Bahamas.

Among the main regions in the US for fractional boat ownership, you have Miami and Fort Lauderdale, but also Cape Cod and Nantucket.

Some programs also offer Asian destinations mostly in Hong Kong, Thailand, and the rest of South-East Asia.

Read also : Sustainable Yachting: How is the Boat Industry Becoming more Eco-Friendly?

About to buy a yacht?

Were you thinking about Fractional Yacht Ownership? Our professionals will be happy to help you in your endeavors.

Fractional yacht ownership means that you legally own a portion of a yacht, along with co-owners. Therefore you are entitled to use the yacht based on your ownership agreement and must share revenues and costs with other owners.

It depends on your desires and your personality. If you like changes, try out a different yacht model every year and change frequently of destination, then go for yacht chartering. If, on the contrary, you have a crush on a yacht, want to start owning it at a lower cost, and avoid the management requirements, fractional boat ownership is ideal. Unlike chartering, fractional ownership means you can invite as many guests as deemed safe and as long as you have proper safety equipment on board.

The costs include the purchase price of your ownership share and yearly exploitation and maintenance fees to pay to your management company.

Hard to tell. This depends on your availability if you have time or not to take care of your boat, and your budget. If you don’t want to worry about the management aspects and only have a small budget to invest, go for fractional ownership. If you want to have perfect freedom, use your boat anytime and wherever you want, go for full ownership.

Yes, you can. As long as the share belongs to you, you can sell it whenever you want as long as the agreement doesn’t stipulate anything against it. Be aware that the other owners can also do so.

The most popular regions for fractional ownership are the Mediterranean and the Caribbean. But also, the US and some Asian areas.

You can buy a fraction, or a share, of a yacht. You will be the co-owner, or the fractional owner of the yacht and its cost will be spread among all owners.

Yes, fractional ownership and yacht sharing or even co-ownership are all synonyms. You still become the co-owner of a yacht regardless of how you decide to call it.

A yacht sharing program allows you to co-own a yacht, so that you spread its maintenance cost among all owners. It is also known as fractional ownership or co-ownership programs.

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Yacht Share Network

Yacht Share Network – as featured in the Sunday Times – is the world’s largest yacht brokerage dedicated to co-owned yachts representing over 200 yachts in the best global boating hotspots.

We are purposefully not tied to any particular yacht brand as we recognise that our range of differing yachts from all the leading brands offers potential co-owners much more choice, which simultaneously translates to more competitive offerings.

HOW IT WORKS

Fractional yachting, jet share network, featured yachts, riva 90 argo – monaco, pearl 62 – puerto portals – mallorca, pearl 95 – balearics & western med, azimut 26m grande, sanlorenzo sl90a *new 2023*, the world's largest yacht share brokerage.

We have 3 teenage lads, and they just didn’t want to come on holiday with us anymore. However, once there was a yacht on offer that suddenly changed. Now they love to come along and we have wonderful family times together. The boys are great company and we have created lots and lots of new family memories that will remain with us forever.

The yacht share idea always appealed to us, finding a professional and reliable syndicate was harder. I am happy to vouch for Yacht Share Network, they are truly the masters of the universe and make it work incredibly well.

Boating was never my dream however it was my husband Robert’s ultimate goal in life. Sharing meant we managed to achieve a of this and more with a fraction of the cost. We could still take the children skiing and do all the other things a busy family wants to do. When you see your 7 year old swimming in the sea and in the tender shouting faster whilst laughing and screaming you know that holidays are back to being magical. This has been the making of us as a family thank you so much.

I’ve known William for many years and he knew that our boat sat empty in Cannes for most of the time. He suggested we sell some shares instead of just burning cash on moorings and maintenance. Yacht Share Network took her into their fleet and we got ¾ of our capital back. Now we just have ¼ of the running costs, and don’t feel so guilty that we only use the boat about 6 weeks of the year.

I have to admit, I probably love boating more than my wife does so buying a boat was unlikely to ever happen. A boat share however… I got the boss to approve, and a happy wife is a happy life lol!

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How Does Fractional Yacht Ownership Work?

All of the fun, at a fraction of the price..

Being on the ocean in your very own luxury yacht is an enchanting feeling, one of freedom from daily stresses and an indulgence in your own desires. Much like other recreations, however, boating comes with its share of preparation, continuous upkeep, and unexpected expenses that can sometimes hinder your plans. Chartering a yacht allows you to enjoy the boating lifestyle without the responsibilities, but the vessel has probably been used by many other guests and can be difficult to book. With SeaNet’s yacht sharing program, you can have all of the benefits of yacht ownership without all of the extra hassles.

Fractional yacht ownership is where several people all purchase shares of a yacht that is fully-managed, serviced, and maintained by a professional company, and each owner gets a set number of weeks to enjoy the luxury vessel as they wish. Being a part of a fractional yacht ownership program gives you all of the benefits of owning a yacht, without the hassles and headaches that come with being responsible for the upkeep of a boat. Your shares of the yacht can even be transferred or sold once you have decided to move on to a different program.

The team at SeaNet are pioneers in developing yacht sharing programs that work and have proven time and again to successfully meet our yacht owners’ needs through our unique, tailored system. The brands we have chosen to offer to you are among the finest vessels in the industry and feature the latest trends in style, comfort, and technology. If you’re interested in learning more about a personalized fractional owner program that fits your budget and lifestyle, please use our contact page, fill out the form, and one of our expert sales professionals will be in touch shortly to discuss options.

While there are many advantages to sharing ownership of a luxury yacht, the cost savings is certainly the primary reason that most boaters opt into our program. Many yacht owners only get to use their boat 5-8 weeks out of the year, so why carry the ongoing expenses of maintaining it? Below are a few of the main benefits of sharing a yacht through a SeaNet program instead of owning it outright:

• The entire ownership is turnkey and stress-free. Your yacht is clean and ready to cruise when you show up. When you’re done, there is no additional work required. We handle everything. • Any routine maintenance or repairs are completely covered, relieving you of the hassles of upkeep on your vessel. • Your yacht is professionally maintained by our team who has decades of combined experience. • Yachts that get used more and generally in better shape. If your vessel sits for long periods of time, systems and equipment begin to fail more frequently. • You never have to worry about managing a captain or crew, all of this is done for you. • Our complete yacht management service even includes provisioning, so your boat is fully stocked when it’s time to depart with your guests. • Your share in the yacht can be easily sold or transferred when you’re ready to move on.

Relatively new in the industry, fractional yacht ownership is quickly becoming a popular choice among boaters who want to experience the luxury lifestyle, without the high upfront and ongoing costs associated with being the sole owner of a vessel.

So what kind of yacht can you expect to buy into through a fractional ownership program? “SeaNet only offers the very best quality brands such as Benetti , Sunseeker, Absolute , and Van Dutch,” says Michael Costa, CEO and Founder of SeaNet. “All of our available yachts emphasize enjoyment on the water and total comfort. Whether sunbathing in a tropical destination or enjoying the 360-degree views from the flybridge, you will truly experience the luxury yachting lifestyle.”

New to our fleet of managed yachts available to you as a fractional owner is this stunning 2022 Absolute 62 FLY located in Newport Beach, California.

The new 62 FLY by the Italian luxury builder, Absolute Yachts, offers an inviting combination of performance, handling, exterior social areas, and interior comfort. Whether you are entertaining important guests for a night out under the stars, or cruising for several nights on an on-water vacation, the 62 FLY delivers in all aspects. There are four cabins on board, including a tremendously spacious and well-lit master suite, that all offer total comfort and plenty of storage. Enjoy the luxury yachting experience with SeaNet’s professional management services at a fraction of the cost with our exclusive yacht sharing program.

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How does Fractional Ownership work?

Fractional ownership is a business concept that has been around for decades. It is a method of ownership where several people can own a share in an expensive asset. Monocle Fractional Yachts is the smart alternative to joining a vacation club which can only offer you limited views and marginal services. Investors choose a fractional approach to investment when they do not want to spend the amount of money required to own the entire asset and they do not want all of the risk or hassle that accompanies ownership of the entire asset. Monocle has pioneered the use of fractional ownership applied to a specific class of asset, the luxury yacht.

Fractional ownership splits the cost of purchasing the asset and managing the asset across a set of owners. Because an independent professional handles management, the fractional owners are free to enjoy themselves and be removed from the management responsibilities. Each owner is free to use his/her share of the asset according to the terms of the purchase. Monocle applied the fractional ownership concept to luxury yachts because most yacht owners only use their yacht several weeks a year and the costs to acquire and maintain a yacht are immense.

Under the Monocle Program, Fractional ownership is perfect for yacht owners who want the yachting experience with no hassles and no waste of their hard earned capital. We have owners in the Monocle Program who own 5% of a yacht through to 70%. Many purchase 10% of a yacht for their personal use and another 10% for business use including entertaining, corporate retreats, chartering, and hosting clients. Virtually all of our owners could afford to purchase the entire yacht outright, but do not want the waste that comes with letting a major asset sit idle in port and the hassle of management.

The most common misconception about fractional ownership is that it is a timeshare by another name. This is a mistake. With timeshare arrangements, you do not own a share in a property, merely the right to use that property for a set period of time. When your time runs out, you are left with nothing. With fractional ownership, you own the asset.

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FRACTIONAL OWNERSHIP

EFFORTLESS YACHT OWNERSHIP

Experience luxury yachting with shared costs, hassle-free ownership, and cross-usage privileges to explore our diverse fleet, all in a single, comprehensive fractional ownership program

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Curvelle luxury power catamarans are created with the twin pleasures of absolute comfort and unbeatable performance always in sight. Our yachts cruise equally well at speeds between 10 and 24 knots and, because of their highly efficient hull design, use far less engine power and fuel. And with about 50% more space to play with than a comparable monohull, a Curvelle is in a class of its own.

Enjoy all the pleasure of a superyacht at a fraction of the commitment. Expect more and spend a lot less as a member of an owners' syndicate.

For 1.575.000 Euros you will co-own the yacht with six other members of a private syndicate. As part owner of a brand new Curvelle quaranta , you can cruise for five weeks in the Med and Caribbean every year, and benefit from the syndicate's charters.

For10.655.000 Euros you can own the whole yacht - fully equipped, turn key.

Learn more about the Curvelle quaranta power catamaran in a video interview by Superyachttimes,this August in Tuzla, Turkey

Money Report

Covid caused a ‘massive spike' in yacht sales — now some of those boats are back on the market

By monica pitrelli,cnbc • published april 29, 2024 • updated on april 30, 2024 at 12:52 am.

Some pandemic-era yacht owners are headed back for dry land.

The pandemic spurred a "massive spike" in yacht sales, said Richard Allen, chief operating officer of the Hong Kong-based yachting company Simpson Marine.

"We've seen a lot of those people, that had their boats for two years, sort of now wanting to travel," he told CNBC. "In the last probably few months, talking with other people in the industry, we've seen an increase in brokerage activity of … boats being sold."

That was expected, said Paolo Casani, CEO of the Monaco-based yachting company Camper & Nicholsons.

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"We sold, as an industry worldwide, more than the double the yachts [in 2021] than 2019," he told CNBC. When this happens, "they go to the market starting from a couple of years later."

Prices in the pre-owned market

Enthusiasm for yachting remains high, even if sales have fallen since 2021, said Casani.

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"The industry is going back to 2019," he said. "And we have to distinguish between brokerage and new builds, because the demand for new builds is still quite high."

With more yachts hitting the brokerage market, prices are down, albeit slightly, from pandemic-era highs, he said.

"Prices are still quite high," he said. "There is still a gap between the demand and the offer ... but we do believe that there will be still a reduction in the course of 2024."

Asia yacht growth 'less than expected'

Some yachts buyers in Asia aren't selling, though, said Allen — in fact, they're trading up for larger vessels.

"Some have actually really enjoyed the boating lifestyle, and are already upgrading … to bigger boats," he said.

Asia — a continent of rising wealth and numerous island nations, many bathed in year-round warmth — has long been viewed as the next frontier for global yacht growth.

Casani and Allen, who spoke to CNBC on April 26 while attending the second annual Singapore Yachting Festival, agreed that the continent's yachting market is growing.

But, Casani said, the pace is "less than expected" for many reasons, including culture, lifestyle and lack of infrastructure.

"But we still believe that Asia has a very high potential," he said.

Allen said the disparate and onerous "rules and regulations" in the region are thwarting progress.

"We need to make it easier for boats to move around between the region," he said. "In one country you might be able to drive a certain size boat, but then another you can't. So those sort of things — the red tape, shall we say."

Complex visa requirements for foreign boat crews are problematic, as are high import taxes, which can reach 40% in some markets, he said.

"We need to do a lot of lobbying with governments to make it easier to import boats," said Allen. "There's a lot of lobbying groups like ICOMIA … that are working much more collaboratively with the different dealers to have a voice to government."

The International Council of Marine Industry Associations, or ICOMIA for short, hosted a two-day conference ahead of the Singapore Yachting Festival to address issues the industry faces, from sustainable propulsion to the lack of marina infrastructure in high-potential countries, such as Indonesia, Philippines and Vietnam.   

Beyond buying and charters

Simpson Marine estimates the global marine leisure market will reach an estimated $46.5 billion in 2027 — which it says will trickle down to the local economy through job creation and tourism revenue.

"The yachting industry employs thousands and thousands of people building boats, supporting boats, all the component servicing," said Allen. "This is a ... great industry for countries to embrace."

Newer forms of ownership make yachting less expensive, which is opening the industry to more people. One model that is especially popular in Australia is fractional, or syndicated, ownership, where owners buy a share of a yacht, he said.

Others are avoiding ownership altogether, opting for flexible subscription models, which are now the norm for many forms of entertainment, from music to television.

"We've seen massive growth in boat clubs," said Allen. "It's a bit like joining a gym or a golf club. You pay a monthly membership, and you get the use of a boat so many days a week. And that's very popular for people that don't really want all the hassle of owning a yacht."

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Amanda Hoover

Can’t Afford a House? Buy a Piece of One Instead

Nancy Chockley’s $12 million home sits next to a ski slope in Vail, Colorado. It has a chef’s kitchen with sleek appliances, a family room with a modern fireplace, a balcony with mountain views, and four bedrooms that sleep up to 12 guests. But when Chockley packs up to return home to Washington, DC, she puts family photos back in her assigned cabinets; clothes and skis go into her family’s storage locker. That’s because she and her husband don’t really own the house—they bought a fraction of it, and they spend six weeks a year there. Once they leave, every trace of them is scrubbed from the property. She’s never met any of her co-owners.

Chockley, a health care executive, bought a portion of the house through Pacaso, a brokerage firm that buys what many consider second or vacation luxury homes, sells them in fractions, and manages them. The company bought the Vail house in 2022, and by sharing it, Chockley says, she was able to get a luxury home in a high-end vacation destination for a price that would have only bought a condo in the area.

“When I go out there, I feel like it’s ours,” Chockley says. She’s so taken with the model, she even invested in Pacaso, she says. There’s all the perks of a vacation home with no repairs or upkeep to worry about. “When we leave, our footprint is gone.”

Pacaso is just one of the ways that people are adding parts of a house to their real estate portfolio. Other companies, like Arrived, Lofty, Landa, and Mogul, allow people to pay a few dollars or a few hundred dollars to buy shares in a property that is rented out to tenants or vacationers; investors then collect dividends and benefit as the home’s value appreciates.

The fractional trend is tech’s immediate answer to the protracted housing crisis. High mortgage interest rates (now inching above 7 percent in the US) and a lagging supply of new, affordable homes have wreaked havoc on the market and shut out many prospective home buyers. A recent analysis from Zillow found that there are now 550 cities across the US where the typical home costs $1 million or more. Most are in California, New York, and New Jersey. The median price for an existing single-family home is nearing $400,000 and continuing to rise in most cities, according to the US National Association of Realtors . The majority of first-time home buyers make purchases with someone else, and more than a quarter of home buyers are buying with friends, siblings, or parents, rather than a romantic partner, a survey from Opendoor shows. There are also companies in Europe that offer both fractional ownership and low cost fractional investing , suggesting the trend is taking hold elsewhere.

Fractional real estate ownership and investing companies say they democratize real estate investing, opening it up at low points of entry as housing costs soar. But they also add more competition to a crowded market. Prospective homebuyers compete not only with older generations , but also with hedge funds, mom-and-pop landlords, and now, a growing number of fractional companies that harness the power of a handful or a few hundred investors in a single property.

Juliane Bergmann

Julian Chokkattu

Charlie Wood

David Gilbert

Fractional investing is just a small sliver of the housing market—but it’s growing, and new companies continue to enter the market. Rising interest rates have disrupted housing, and that’s “caused people to try to figure out different options, to get creative” in how they invest in real estate, says Casey Berman, founder and managing partner at venture capital firm Camber Creek, which has invested in Fundrise , another investing platform that allows people to buy into real estate, private credit, and venture capital.

But these fractional investments come with risk, particularly for people who buy shares in homes rather than a fraction of the property itself, Berman says. “The retail investor has to truly understand the asset that they’re buying. Is it the underlying house, or is it some type of security owned by a startup backed by a house?” The shareholders may not always have a say in how the property is managed or when it’s sold, and if market conditions change or it sits without a tenant, their investment could fall into the red.

Those high interest rates recently hobbled one fractional company. Here.co, a Miami-based platform that worked in the fractional ownership of short-term rentals, announced its closure in January, citing “current interest rate environment and economic conditions.” The company said it would sell the properties within six months—but would not distribute funds back to investors until all of its properties had sold. Here.co did not respond to a request for comment about the state of its property sales.

That’s a different model from Pacaso , which sits at the high end of the market and allows people to own a portion of a house, rather than a share. If an owner wants to exit, they can sell their individual share to a new buyer. In a recent push, Pacaso increased its home offerings by 200 percent, with some starting as low as $200,000 for an eighth of the home. The company is focused on “making a second home possible for more people,” says Austin Allison, Pacaso’s CEO. Some homes are far pricer: For example, a one-eighth ownership of a house on Cape Cod is listed for nearly $1.6 million. But Allison argues that by splitting these second homes among several people, they’re occupied more days of the year, which benefits local economies that rely on tourists.

There’s another set of firms that cater to the retail investor. Arrived , Lofty , and Mogul offer shares or tokens in homes that start at around $50 or $100. Many of the homes bought and sold in shares by these companies are more modest; they’re typical single-family starter homes, rented out to either full-time tenants, and others might be larger homes decked out for short-term rental platforms like Airbnb. On Lofty, people can buy tokens in homes starting around $50, and then use those tokens to vote on management decisions about their properties, including repairs. Fundrise, possibly the largest of the companies, is fueling “build for rent” communities with more than $700 million of backing from JP Morgan.

At Jeff Bezos–backed Arrived, the high interest rates are “a big reason why more and more have joined,” says CEO Ryan Frazier. For a low price, retail investors can reap the benefits of putting money into the housing market—Arrived sells shares in houses, many valued between $200,000 to $400,000, and they draw around 100 investors each. The share prices in many are low, some for $12, some for $25. But some invest more, and there’s now $150 million invested across about 400 properties on Arrived, says Frazier. The number of investors and amount invested has nearly doubled in the past year, and the high mortgage interest rates paired with a low supply of affordable homes only make it more appealing as people struggle to afford homes, Frazier says. Returns on a few of the company’s longer-held properties have topped 70 percent, although a number of other properties sit in the red.

Arrived drew ire from Congressman Ro Khanna last year, as it launched its Single Family Residential Fund, which throws more than a dozen properties into a bundle and lets people invest in the asset class, like a modern REIT. "The last thing Americans need is a Bezos-backed investment company further consolidating single-family homes and putting homeownership out of reach for more and more people," Khanna said in December. "Housing should be a right, not a speculative commodity.” In response to such criticisms, Frazier argues that the Arrived model democratizes real estate investing. Instead of a few hundred people owning these 400 properties, he argues, now 38,000 people have a piece.

At Mogul, which widely launched its platform last fall after a private beta, people can invest as little as $250 in homes scattered across the US Sunbelt. Typically, these become short-term rentals, including a stylish five-bedroom house in Southern California that rents for $800 a night on Airbnb . Mogul has just four properties available currently, but its CEO, Alex Blackwood, says the company plans to have as many as 20 to 30 within the next month or so. But they aren’t all retail investors, and some instead pour tens of thousands of dollars into the properties. It’s a way for those with more money to find passive ways to invest in real estate instead of becoming full-time landlords or short-term rental hosts, Blackwood says.

He argues that the trend of fractional investing is picking up steam because people are still seeking the feeling of the American Dream of home ownership. In a chaotic housing market, investors are taking a glass half-full approach. The housing market outlook may be bleak, but, Blackwood says, the young people shut out from the housing market “want to buy a part of something rather than nothing at all.”

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Anti-money laundering

New AML rules will change the EU’s financial crime prevention landscape for good. But what will change in practice?

Alexandra Jour-Schroeder

More finance news

On 24 April, the European Parliament formally endorsed the future Anti-Money Laundering Package, a reform that has been in the making for the past 5 years. Since the European Commission published its proposals in July 2021, and even before, much has been said about how this reform will change the EU’s financial crime prevention landscape for good.

But how will things change in practice? Here are a few simple examples!

Real estate

Criminals often channel money into super fancy mansions and estates. Until now, only information about EU owners has been available to investigative authorities. When the property is owned by a company in a non-EU country, it is extremely hard to identify whether it may have been acquired with illicit funds. The new rules require foreign companies, as well as trusts, that have owned a piece of real estate in the EU since 2014 to record in our beneficial ownership registers who the individuals who own or control the company or trust are. Member States can put the reference date further back in the past, if they consider that certain risks make this necessary.

As the sudden peak in online fraud during the pandemic showed, criminals do not suffer from any kind of digital divide. Yet, any investigator would tell you that of all the means that exist to launder illicit proceeds, cash remains criminals’ preferred choice. Why? Because it’s easy to transfer, fully anonymous and therefore difficult, if not impossible, to trace back to some criminal act. Of course, access to cash is and will remain a right for everybody in the EU and most cash transfers are absolutely clean. The continued acceptance and availability of cash is an important issue for our consumers, including for financial inclusion. But when large sums of cash are used in transactions, the risk of crime is much higher and much more difficult to manage. For this reason, the new rules introduce an EU-wide cap on large cash payments, set at €10 000, which Member States can lower if needed based on specific national risks. This high figure avoids any negative impact on day-to-day transactions, but also ensures that flats or houses cannot be bought with stacks of cash!

Luxury items

Diamonds are your best friends? Criminals love precious stones too, as well as gold and other precious metals, raw or turned into jewellery. These items can be used to launder money in ways that are pretty similar to using cash. But not every piece of jewellery is attractive for criminals, what interests them are pieces of high value. So, the new rules require those trading in these precious items to carry out checks on their clients when selling items priced €10 000 or more. Other luxury goods such as high-value cars, yachts and planes are also pretty handy when it comes to investing or converting illicit proceeds. What do we mean by luxury? For instance, a car that is worth €250 000 or a boat that costs more than €7 500 000. So, on top of similar checks on the clients, sales of these products will also trigger automatic reporting of any sale to Financial Intelligence Units and registration of the true owner when the purchase is made by foreign companies or trusts.  

Sham fundraising campaigns

Crowdfunding can be a great alternative way to access financing for projects, without the need to obtain loans from banks or other financial institutions. When it comes to charitable projects, crowdfunding allows small contributions to bring real change. Crowdfunding, however, can be misused by groups with less-than-charitable objectives – such as terrorist organisations – or where there is a risk that the funds collected will not be used for the stated goal but to fund terrorist acts. To prevent sham fundraising campaigns from being advertised, the new EU rules require crowdfunding platforms, which enable project owners to connect with potential donors, to carry out checks on the project owners and the intended project. Any attempt to misuse crowdfunding will thus be promptly detected and reported, making alternative financing safer for all.

The digital world is full of opportunities. However, with opportunities come risks. The EU has created a solid framework providing regulatory certainty for the development of the crypto-industry, whilst protecting our consumers and our financial system – including from criminal risks. Indeed, as of the end of this year, a comprehensive set of rules will regulate the sector. From an anti-money laundering perspective, this means traceability of all crypto-asset transfers involving the EU, application of anti-money laundering requirements to crypto-asset service providers in line with international standards, and strict oversight of the application of these rules, similar to checks carried out on banks and other financial sector entities. This also means that crypto-asset service providers with a significant level of activity in the internal market and exposed to higher risks may be under the direct supervision of the future AML Authority (AMLA).

Football is Europe´s most popular sport and indeed it is fascinating to play in a football team or enjoy exciting matches. Professional football is not just a sport though, it’s also a multi-billion-euro industry. And this makes it attractive to criminals.  The FIFA corruption case and football leaks of 2015 put the spotlight on the risks of criminal acts associated with this sport. To mitigate these risks, the new rules complement self-regulatory measures at European and national level and require football clubs and football agents to carry out checks on certain financial transactions, such as player transfers, investments, and sponsorships.

Real change is coming with the new AML package. It will make a key difference on the ground – and further improve the integrity of our financial system. Let us all keep a clean sheet against crime!

Related links

Latest update on Anti-money laundering and countering the financing of terrorism legislative package

Anti-money laundering and countering the financing of terrorism overview

Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA)

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