Apr 11, 2026
Climbing home prices, higher mortgage rates, lower inventory: Trends over the last decade have made for a hot housing market, and left many Americans feeling like homeownership will forever be out of reach.
For those hoping to purchase a home, both saving for a down payment and managing high mortgage payments can be insurmountable obstacles.
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Startups have entered the fray with a seemingly radical structure that can make it possible to leave renting behind. It's called "fractional ownership," and while it can mean swapping monthly rent payments for mortgage payments, the word "fractional" should give you a clue that it's not as straightforward as traditional homeownership.
The reality is, it comes with a major downside: it may take a lot longer for you to actually own your home.
What is fractional ownership?
Put simply, fractional ownership is when more than one party owns a percentage of an asset. This type of ownership is more common for high-value vacation properties or private aircraft.
The new crop of startups offering fractional ownership arrangements have varying structures, but generally they will partner (1) with homebuyers on the purchase of a property, taking an ownership stake.
Marlene Koch, an economist at Maastricht University in the Netherlands, told Business Insider (1) that one benefit of fractional ownership is that the lower initial costs allow homeowners to diversify their investments. Money that would otherwise go toward a mortgage can be invested, which can lower the "concentration risk in their portfolio."
One fractional ownership startup, Jubilee, functions similar to a leasehold (2), which is an ownership arrangement where you own a home, but not the land that it sits on, which you instead lease long-term from the company. When Jubilee (3) partners with a homebuyer on their purchase, the company buys the property with cash, then the homebuyer buys the home from Jubilee, while the company retains ownership of the land it sits on.
Since the land is generally much more valuable than the building itself, this means a smaller mortgage for you. The startup gives you a 99-year lease on the land, and you pay that rent monthly, in addition to the mortgage you took out. If you want to buy the land in the future, you can purchase it from Jubilee.
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Another startup, Ownify (4), lets you put down 2% of the purchase price, and it covers the rest. You'll make a fixed monthly payment to the company, and a portion of that is allotted to buying equity in the property. Ownify says that after the five-year program, you'd own about a 10% stake, and at that point you can cash out, renew for five more years or use your equity to get a mortgage and buy out the company.
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What are the downsides?
While fractional ownership models allow people who otherwise couldn't afford a mortgage to build equity — as opposed to renting, where all your money goes to your landlord — there are aspects of these models that some experts warn against.
Sharon Cornelissen, the director of housing for the Consumer Federation of America, told Business Insider (1), "If it sounds too good to be true, it usually is."
Cornelissen's first warning is that consumers might not understand all the ins and outs of these types of arrangements, and the financial trade-offs involved. She also flagged that some of these models may require the consumer to pay for all the associated costs of owning a home, such as maintenance, major repairs, insurance and property taxes, or they may charge origination, or processing fees or annual upkeep fees.
Cornelissen told Business Insider that it also concerns her if the investors in these types of companies "have all the upside but not all the ongoing costs of maintaining the home and the monthly burden."
Business Insider notes that it can also be hard for consumers to calculate what they may be giving up in these kinds of deals. While the company's website may include calculators or scenarios comparing their offerings to a traditional mortgage, these projections may "rely on a barrage of assumptions."
Ownify's website, for example, bases its comparison to a traditional mortgage on the assumption that the homeowner with a traditional mortgage would sell after only five years, comparing those figures to the five-year Ownify plan, and also assumes a large cash-offer discount for the Ownify purchase.
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There's also the question of what happens if you can't make payments. Jubilee states on its website that, "In the unlikely event that you are unable to make your rent payments longer term, we will work with you to find an amicable solution that preserves the equity you've earned," noting that as "a last resort" the company has the right to terminate the lease and evict tenants.
Ownify's website states that after a five-day grace period, you will receive a notice of late payment, and that, "Customers in default will have to vacate the property if resolution is not achieved in a timely manner."
Do your research
Fractional ownership offers a way onto the property ladder at a time when traditional home ownership may be out of reach for many.
Authors of an October 2025 report (5) from the Harvard Joint Center for Housing Studies note that in the previous year, "the national median single-family home price grew to five times the median household income."
If you are interested in fractional ownership, be sure to do your research, and that you understand the fine print.
These arrangements can allow consumers to build equity when they likely couldn't afford to do so otherwise. However, that road to building equity will potentially be much longer than traditional home ownership.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Business Insider (1); Realtor.com (2); Jubilee (3); Ownify (4); Harvard Joint Center for Housing Studies (5)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
