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> Why not just buy fractional shares of a property?

Transaction costs for diversification. The same reason it makes sense to buy ETFs versus directly balance your own portfolio for anything below your first million.




But owning a REIT is nothing like owning property. Sure, REITs and investment properties both derive cash flows from rent, but the similarities stop there.

In general, asking “why not X instead of Y” without giving reasons why X is preferable over Y is just a waste of everyone’s time.


Owning fractional shares in property is also nothing like owning property. You’re not going anywhere profound with this line of argument.


Really? Most people own fractional shares of real estate, e.g. when the property is part of a marital estate.

Investing in a REIT is just investing in a company that happens to derive cash flows from real estate. You’re not buying fractional ownership of real estate when investing in a REIT. You’re investing in a management team and a capital allocation strategy. It’s much more similar to a mutual fund or PE fund. The only difference between a normal business and a REIT is that you have to pay income tax on your dividends. Owning a fractional share of a property is taking an ownership stake in a real asset. The two aren’t related at all.


Why do you keep saying "fractional share"? All shares are fractions. You sound like a moron.


> When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."

https://news.ycombinator.com/newsguidelines.html


Typically, fractional ownership of real estate assets is typically done via a tenancy in common title, not via a share mechanism, so your “share” (literally “portion”, which can be partial or whole) is a fraction of the whole.




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