Both fractional ownership and real estate investment trusts let you invest in property with smaller sums. They work very differently.
What you own
With a REIT, you own shares in a listed company that holds a large, changing portfolio. With fractional ownership, you own shares in a company that holds one named building, so you know exactly which asset you are exposed to.
Volatility and pricing
REIT share prices move every trading day and can swing with general stock market sentiment, sometimes trading well above or below the value of the buildings. Fractional shares are usually valued periodically against independent property valuations, so prices move less often.
Liquidity
This is the REIT's strongest advantage. You can usually sell listed shares within seconds. Fractional shares depend on a matched buyer or the final sale of the property.
Tax wrappers
Listed REITs can usually be held in a Stocks and Shares ISA or a SIPP. Shares in unlisted property companies generally cannot be held in a standard Stocks and Shares ISA. Check the eligibility of any specific product before investing.
Choosing
Many investors use both: REITs for liquidity and broad exposure, and fractional ownership for targeted positions in buildings and places they understand.
This guide is general information, not financial, tax or legal advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.