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Fractional ownership is a form of collaborative consumption where the overall cost and benefits or earnings deriving from a property are split among a group of owners or users.
If earning passive income from rent was until now reserved for people who can afford to buy an entire asset, now it's for everyone, thanks to fractionalized ownership.
Fractional ownership is a common investment structure for expensive assets such as aircraft, luxury goods, sports cars, and especially real estate (both regular assets and vacation rentals that provide better ROI but more volatility). All the shareholders or token holders split the benefits of the asset, such as income sharing, and / or other benefits as well depending on the exact nature of their contracts with each other or with the platform that enables them to invest together.
The earning potential of this particular form of collaborative consumption comes from two major sources: rental income and asset appreciation.
Rental income: The rent collected for the common asset is distributed among the fractional owners regularly, proportionately with the shares (percentages) they invested in.
Asset appreciation: if the asset increases in value, the value of the shares in the investment does as well.
Extra reading:
https://www.investopedia.com/terms/f/fractionalownership.asp
https://hbr.org/2010/10/beyond-zipcar-collaborative-consumption
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