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How to Calculate ROI in Real Estate to Maximize Your Profit

How to Calculate ROI in Real Estate to Maximize Your Profit

If you’ve dabbled in real estate investing (or even if you’re brand new) you’ve undoubtedly heard of “Return On Investment” (ROI) and how important it is to consider when making your investment decisions.

But what exactly is it, and how do you calculate ROI in real estate? Is it crucial for investment success?

We’re going to break down the basics of ROI, how to calculate it, and how to use it to make smart investment decisions so you can grow your real estate portfolio with confidence.

Ready? Let’s dive in!

What is ROI?

Because ROI stands for “return on investment,” it’s a very important concept to understand when it comes to real estate investing.

It is a standard metric used to calculate the profitability of an investment on a case-by-case basis. It measures the financial return of a particular investment relative to its cost. The higher the ROI, the more profitable the investment and (presumably) the better it is.

Why is ROI so popular for measuring profitability?

Two reasons: first, it’s incredibly simple to understand and easy to calculate the ROI on almost any investment.

Second, it provides a simple way to get a financial snapshot of an investment, relative to other investments, so you know when to buy, sell, or simply measure whether or not your portfolio is on the right track.

Although it’s incredibly important to know the ROI of any investment, it often doesn’t take into account the complexities, nuances, and “life factors” involved in growing a successful real estate portfolio. For this reason, it should be used as a tool to give broad feedback on the quality of your investments.

Why is ROI in real estate so important?

Although many ROI formulas paint a simplistic picture of investing, they can also give a very quick and solid overview of a property’s profitability.

In a pinch, you can figure out the “health score” of any potential investment you’re interested in and ditch some of the lemons along the way. Properties with an obvious cash flow issue or negative ROI can be identified quickly.

When taken into account along with your overall investment goals, using ROI calculations will help you make smart financial decisions and build a solid real estate portfolio.

At BuyProperly, an online marketplace for fractional real estate investments, they calculate ROI for investors and use it as a benchmark to measure the profitability of their properties. Most of their investors can expect to see projected annual returns of 10-40% Take a look at their properties.

The formula for calculating ROI

There are a few different ways to calculate ROI depending on the type of real estate investment you have. Let’s look at how to calculate ROI for real estate investments that are resales or rental investments.

Here are some examples:

Resales

When calculating the profitability of resale real estate investments, use this simple formula:

Your equity in the property (total gains minus your total costs) divided by total costs

There are two methods real estate investors can use to calculate their gains and costs:

  1. the Cost Method
  2. the Out-of-Pock Method

Let’s look at them both in detail.

1. The Cost Method

This method for calculating ROI uses the total equity in a property divided by that property’s costs (renovations, repairs, and sale price). The Cost Method works for properties purchased with cash and/or financing.

For example, say you purchase a home for $250,000. After putting in an additional $100,000 for repairs, you sell the property for $500,000.

First, you need to calculate your equity in the property. If it sold for $500,000 after your total costs were $350,000 for the purchase and repairs, you had $150,000 left of equity.

Next, calculate the total costs. As mentioned above, the total costs for the property were $350,000 ($250,000 purchase price plus $100,000 in repairs).

After you divide your equity ($150,000) by the total costs ($350,000), you get 0.43, which is a 43% ROI.

2. The Out of Pocket Method

The second popular method for calculating ROI looks at only what you’ve spent out-of-pocket for property costs and expenses and doesn’t take into account the property financing.

When would investors use this method? The Out of Pocket Method can be used to calculate ROI only when investors purchase a property with a mortgage. Both the down payment and financing on the property are calculated as equity, making the overall ROI higher.

Let’s use the same example as above.

You purchased the property for $250,000 and put in $100,000 of repairs, only this time, let’s say you put a 20% down payment on the house and used a traditional mortgage to finance the rest.

This means your out-of-pocket expenses are only $50,000 (your down payment) plus $100,000 (repair costs).

If the property is worth $500,000 after repairs, this means you have $350,000 of equity (including your bank financing as leverage). After you divide $350,000 by the total sale price ($500,000), you’re left with an ROI of 70%.

Rental properties

Calculating ROI on rental properties is slightly more complex since we need to factor in year-over-year profitability.

For this ROI, we use the following formula:

Net operating income (annual rental income – operating expenses) divided by the total out-of-pocket expenses.

Using the example from above, if you purchased your property for $250,000 with a 20% down payment, that means your out-of-pocket expenses would be $50,000. Add in closing costs ($5,000) and some money you spent on repairs ($20,000) your total expenses are $75,000.

Now, let’s say your monthly rent is $1,200. Multiply this by 12 to get the average yearly rent. Subtract operating expenses (let’s assume these are $500 a month). This leaves you with a yearly net operating income of $8,400.

Divide $8,400 by your out-of-pocket expenses ($75,000) and you’re left with an ROI of 11%.

Other important factors when considering ROI

When you’re trying to paint a more detailed picture of your ROI on a property, there are two other important factors to consider:

  1. home equity
  2. year-over-year appreciation

Using the above example, if you buy a $250,000 property with a $50,000 down payment and a $200,000 mortgage, your equity grows over time as you pay down the principal balance on your loan.

Let’s say that, according to your mortgage amortization schedule, you paid $2,300 on the principal balance of your loan in the first year. This $2,300 now becomes equity and can be used in your ROI calculation.

Furthermore, it’s important to consider year-over-year appreciation. If we assume your $250,000 property appreciates at 6% each year, then next year, your property will be worth $265,000, adding an additional $15,000 to your equity.

At BuyProperly, they calculate ROI using net cash flow, mortgage repayments, and capital appreciation to paint a more accurate picture of the returns investors will make over time.

What is a good ROI for real estate?

Determining your acceptable ROI for real estate investments depends on your personal goals and your ability to tolerate risk, which means there’s no right or wrong answer.

Investors looking to rent will normally be content with lower yearly ROI numbers knowing they plan on holding the property as a long-term investment. For rental properties, it’s common to expect a 5-10% ROI.

Property flippers, on the other hand, are more interested in the immediate ROI and are looking for a property with the potential to generate higher returns. In this case, an ROI of 20% or above is ideal.

At BuyProperly, they help real estate investors get started for as little as $2,500 and see projected annual returns of 10-40%. Want to know how? Learn more >>

Conclusion

ROI is an important consideration when investing in a property. Whether you’re looking for a quick return or long-term cash flow and appreciation, calculating ROI can help make your next investment decision easier.

Remember, since ROI is a simplistic method of sizing up your next real estate investment, it’s important to analyze it alongside your risk tolerance profile, as well as your long-term and short-term goals ,before making any investment decisions.

Looking to get started in real estate investing without feeling overwhelmed? Check out BuyProperly’s properties and see how they use a fractional ownership model to help investors build their real estate portfolios.

in Editorial Posted by wpengine

How to Become a Real Estate Investor: A Step-by-Step Guide

How to Become a Real Estate Investor: A Step-by-Step Guide

Are you wondering how to become a real estate investor and start growing your very own property portfolio? We’re diving into the nitty-gritty of what it takes to find your first property deal and build a lucrative real estate investment business.

Real estate investing is on the rise and now is a great time to get into the market. In fact, according to an article in The Globe and Mail, investors account for one-fifth of all home purchases across Canada!

If you’re brand new, investing can feel overwhelming, but there are a few simple steps you can take to set yourself up for success. With a clear plan and the right strategy, being a real estate investor is incredibly exciting, rewarding, and lucrative.

What qualifies you as a real estate investor?

The great news is that you don’t need any special credentials or qualifications to start investing in real estate. Many people choose to get their real estate license so they can get commissions on sales and find private deals, but this is absolutely not mandatory to start finding great property deals.

Even though you don’t need specialized qualifications, it’s important to educate yourself as much as possible on the world of real estate investing so you can become an expert in your field.

Is it hard to become a real estate investor?

Building a lucrative real estate portfolio isn’t incredibly difficult, but it does take time, effort, and patience. New investors should be prepared for a learning curve as they figure out how to navigate the market and build the connections that will help them succeed in the industry.

If you’re brand new to real estate, BuyProperly has opportunities for investors to jump into the property market without tons of money (or risk!).

How? Through fractional real estate investing, BuyProperly offers people the chance to own properties for as little as $2500 with a 10-40% return on investment! Want to learn more?

Now, let’s dive into the six steps you’ll need to follow to become a successful real estate investor.

Step One: Educate yourself about real estate

As a new investor, there is no shortage of concepts, terminology, tricks, and lessons to learn about real estate. The single most important thing you can do is educate yourself.

What are some ways you can learn more about real estate?

  • Read as many books and articles as you can on the subject
  • Attend local seminars and meetups to discuss real estate with investors, realtors, and brokers
  • Find supportive online communities. Sign up for the BuyProperly email list

Your real estate education is an ongoing process that will change and adapt as you become a more confident investor. Be open to meeting new people, making connections, and learning as much as you can!

Step Two: Get crystal clear on your goals 

There are many different paths you can take as a real estate investor that depend on what short-term and long-term goals you’re trying to achieve.

The best thing you can do before getting started is to sit down and write out your 1-year, 5-year, and 10-year goals. Remember, real estate should be a long-term investment that not only generates some cash flow, but also appreciates in value the longer you hold onto it.

If you’re looking for instant returns and a quick exit strategy, real estate and rentals is probably not the best investment to start with.

Here are some questions to ask yourself:
– why do you want to become a real estate investor?

– do you want real estate to be a full-time profession or a more “passive” investment strategy?

– what financial goals are you hoping to achieve in the next 1, 5, and 10 years?

– are you prepared to adopt a “buy-and-hold” strategy with your real estate portfolio?

– are you more interested in monthly cash flow or long-term appreciation?

If you’re not in a position to put a 10% or 20% down payment on a property, consider working with partners or starting with a fractional ownership model. At BuyProperly, their investors start with as little as $2500 and see projected annual returns of 10-40%.
If you’re interested in learning more, visit www.buyproperly.ca

Step Three: Nail down a location and property market

Deciding on which location you want to target is an important part of building your real estate portfolio. Are you planning on investing in your local area or would you consider expanding your search to include neighbouring towns and cities?

When looking for areas to invest, focus on locations with job stability, nearby schools, facilities like parks and recreation centres, predictable rents, and opportunities for economic growth. Remember, you’re building up a real estate portfolio for short-term cash flow AND long-term appreciation, so make sure you choose a stable location.

If you’re willing to purchase investments outside your local area, you can often find great deals in smaller cities and various up-and-coming housing markets! At BuyProperly, they help investors across Canada find rental properties through fractional ownership. Investors can be 100% remote.

 Step Four: Start building your network

Many real estate investors attribute their success (at least in part) to having an incredible network behind them.

One of the most important things you can do as a new investor is to start making connections with other investors, local realtors, lawyers, and brokers. These people know what’s going on in the housing market and they often have access to insider opportunities before the public finds out!

Not only will this allow you to take advantage of off-market deals and get a leg up on the competition, but you’ll also have the confidence and knowledge you need to make smart financial decisions. Having a great “team” by your side will make the process go more smoothly.

Step Five: Learn how to assess properties for sale

When you’re trying to figure out whether or not to purchase a property, there are many things you should keep in mind.

Here are a few examples to consider:

Income potential: What is the current rental revenue and is there an opportunity to increase that? Are there improvements that could be made to the building? Is the rent lower than the average for the area?

Expenses: What are the ongoing expenses for the property? How much is heat, water, and electricity? What will your insurance costs be? Don’t forget about potential vacancies! When analyzing property income, assume a 10% vacancy rate for the year.

Repairs: Are there any significant one-time repairs that need to be done on the property? How old is the roof and windows? What’s the age of the hot water tank and furnace? Factor in all one-time repair costs when analyzing your budget.

Management fees: How will you be structuring property management? Will you be handling it yourself or hiring a company to collect rent, find tenants, and perform routine maintenance? Factor this into your expenses.

Location: We’ve already talked about the importance of location, but it’s crucial to analyze the location for every single real estate deal you make. In some cities, adjacent neighbourhoods (and even streets) may seem similar, but they actually have significantly different average monthly rents and property appreciation.
Ask your realtor or property broker for more information on how you should analyze rental properties.

Step Six: Dive in and make a deal

It’s true what they say: practice makes perfect. No amount of books or real estate seminars can replace the knowledge you’ll get from jumping in and taking action.

Remember: there’s no such thing as a perfect property. Being a real estate investor means analyzing properties carefully, weighing the pros and cons, and making a decision based on your goals and investment strategy.

Don’t be afraid to get out there and start looking at properties, putting in offers, and making deals.

If you’re ready to invest in your first (or next) rental property, be sure to check out BuyProperly’s available listings here. You can get started for only $2,500.

in Editorial Posted by wpengine

Artificial Intelligence making Real Estate Investment smarter, simpler.

Artificial Intelligence making Real Estate Investment smarter, simpler.

When Lucy Ainsworth saw that the real estate around her Toronto neighbourhood was booming, she knew that it was the right time to invest. But unlike her parent’s generation, the Senior Tax Associate did not ask a trusted local realtor, she simply went online. This generational change in approach, to seeking investment-related solutions has placed investors at the core of unmeasurable information and data. Thankfully Artificial Intelligence is here to rescue investors from the chaos of detailed analysis on innumerable investment opportunities available online by carefully connecting them to the best deals.

A booming real estate market and a thriving tech ecosystem have poised Canada to be a hub for real estate innovation where Artificial Intelligence led opportunities to guide investors as they build their portfolios. 

 

Artificial Intelligence (AI), in simple words, is the ability of a machine to learn and solve problems. AI has simplified the investor’s search process by connecting them to the right opportunities and bringing transparent access to reliable information on market trends, historic prices that were historically only available to agents.

Online real estate listings replaced newspaper advertisements long ago but the continual rise of AI is credited to its ability to process large data, predict trends, transparency, and most importantly ease of access to investors.

Process Data
Thanks to the world wide web, a few clicks can show thousands of properties,  attend or host virtual tours, review market trends and receive data but that doesn’t necessarily help in making the right decisions. Thankfully, the real estate industry has adapted to the digital era by using Artificial Intelligence to better match investors with opportunities. One might think that the old-fashioned realtors did the same, but platforms like BuyProperly have mastered machine learning and artificial intelligence tools to monitor and evaluate over two hundred thousand data points, that uncover high-value opportunities suited for each investor.

Predict Trends
It’s no surprise that real estate data represents a treasure trove of information for a keen investor. Local insights, key market trends, sale prices, demographics and other market data can all be used to browse through listings, but not predict the future of investments. AI has become a game-changer for real estate investing as its predictive real-estate analytics enables stakeholders to make better, more informed decisions when trying to assess property values and rental returns. Smarter AI models predict tenant churn, maintenance issues, building energy requirements, elevator usage in buildings as well as space utilization. This information gives a better idea of potential upcoming costs and issues.

Ms. Ainsworth’s financial planning now includes the returns from a beautiful house in Hamilton. ‘I had been interested in owning investment property for a while, but the barriers to entry felt insurmountable. Enter BuyProperly, the company that makes it possible for “the little guy” to get started. It was so easy to research the properties available on the website, create an account, and buy into the real estate market, and at an entry price point that feels safe. No need to bet the farm on a single investment!’ she said.  Read more about the Niagara Falls property here.

New tools can combine a company’s data with third-party sources to gain insights into new strategies for existing properties or portfolios or identify additional markets or locations for investment opportunities.

Transparency
Traditionally, the real estate market has been dominated by brokers, and information about high-yield investments was made available to a select few.  Latest AI-powered platforms bridge the gap by aggregating once isolated data, constantly updating information to arm investors with all the information they need. This approach allows websites to better match users to their properties and investment units that are more likely to convert into sales.

Ease of access
Investors can now access information on potential rental earnings, net cash flow, expected monthly mortgage payments and decide on whether the return makes sense given the details of the property. Websites like BuyProperly provide free tools which can indicate the potential cash flow/ positive negative from investments in a given property based on past sales, potential rental value, and interest rates. AI models work with the assumption that house prices are a function of both the features of the house and the suitability of the neighbourhood and hence focused on intrinsic value (rather than the market sentiment).

Innovative solutions to Pandemic
The impact of AI across industries has been increasing over the past few years, however, Covid-19’s disruption was a crucial flip to the digitization of real estate companies and their use of digital data analytics. With restrictions on travel and physical tours, technology simplified all phases of the process from origination, analysis & due diligence, financing & closing, post-closing rental/ongoing maintenance, and finally to exit through the sale with the investor safe in his own home.

PWC Canada’s 2021 report on the, ‘Emerging trends in Real Estates’ stated that as the business continues to emerge from pandemic restrictions, proptech will offer additional solutions for real estate needs. The report stated that ‘With digitization giving real estate companies access to more data than ever, they have a powerful new tool to help them make important business decisions…data analytics and predictive modeling can help with the determination of optimal asset allocation for mixed-use developments at a high level, as well as provide more detailed insights into the composition of unit mixes for a property.’

Buy Property, Properly
Every real estate investment needs to consider a multitude of dynamic factors, but through the power of AI, it is possible to identify emerging trends and uncover opportunities that others don’t see. ‘Thousands of data points and factors are considered over the long term before we consider a real estate valuation using AI. We then physically inspect each nook and corner of the property. Finally, less than 1 percent of the properties get qualified for our marketplace,’ said Khushboo Jha, founder of Buy Properly Canada-based real estate investment firm. BuyProperly’s proprietary AI tracks the markets, monitoring hundreds of economic and regional factors before predicting the profitability.

BuyProperly, Canada based fractional investment company uses AI as its most reliable tool for initial screening and then audits each property. ‘I am often asked how am I confident about the growth of investments, truth is that no human can assess over 150 variables and 200,000 data points for each proposal, but AI can. We merge the predictive power of AI and the experience of our on-site team so that before any product is added to the marketplace, we are certain of its future,’ Jha added.

BuyProperly’s online marketplace shows qualified properties with clear details of fees, charges, risk, and projected returns. Simply choose properties from the marketplace and start investing with as little as $2,500.

in Editorial Posted by wpengine

How to Invest in Real Estate Without Fear of Rejection

How to Invest in Real Estate Without Fear of Rejection

The Canadian real estate market is hot – and you want in. But you know there can be many hoops to jump through before you score the investment property of your dreams. And one of the last, most frustrating hoops is making an offer…only to have it rejected, Unfortunately, that happens a lot.

Reasons for rejection

Putting in an offer on a property that you worked hard to find and having it rejected can be tough to take. Perhaps there was a counteroffer, but a rejection by the seller may catch you by surprise. Why would your offer be rejected? Here are the most common reasons:

  1. Your offer was too low

Many sellers would counter a low-ball offer in hopes of driving the price higher. But some sellers may just throw out that low offer altogether, especially if they hear of other buyers willing to go higher. And if your offer was very low, and insulted the seller may be unwilling to entertain it at all.

2. Your finances are weak

These days, sellers want to make sure that prospective buyers are at least pre-approved for a mortgage to finance the purchase. If you haven’t spoken with a mortgage specialist yet, there’s no way for the seller to verify whether or not they’re wasting their time with your offer. Instead, they’ll be much more willing to accept an offer from a buyer whose finances are already in order.

3. Your deposit was too small

While your purchase price is a key component of your offer, the seller will also consider the size of your deposit. A large deposit shows the seller that you are financially strong: capable of supporting a home purchase. A small deposit looks weak and could scare off the seller.

4. Your closing dates don’t line up

Matching closing dates help smooth real estate transactions. For instance, sellers who have already bought a new property may want a short closing date so they’re not stuck with two mortgages. Or perhaps the seller has yet to find another home and doesn’t want to risk having anywhere to go. In this case, the seller may want a longer closing date. Either way, if your proposed closing date doesn’t align with the seller’s needs, your offer may be rejected.

5. The seller maybe unwilling to compromise

If the home inspection reveals issues with the property, you may request to have the seller make repairs. But if the seller is unwilling to put in any more work on the home before selling and you can’t reach a compromise, your offer may be rejected.

Aside from the outright rejection of your offer, there are other difficulties that you can encounter in a competitive market, such as bidding wars. But the biggest hurdle to investing in real estate is money. These days, real estate prices are through the roof, especially in certain cities. Many would-be investors simply don’t have the financial means to get started, especially if they are buying a property on their own.

Fortunately, there are other ways to get a foot in the door – even with minimal capital – including “fractional” investing.

Fractional investing in real estate 

In fractional investing, several parties purchase the property: each has its own share and each assumes its share of the risk. For instance, if a property sells for $500,000 and you put in $10,000, you own 2% of that property.

Unlike full ownership, fractional ownership allows investors to diversify their portfolios, reducing risk while getting access to high-value assets. It also eliminates many of the hassles: searching for properties, putting in offers, managing tenants, and maintaining the property.

Who offers fractional investment?

Fractional investing reduces the barriers to entry for investors just starting out in the real estate market. But where can you find these investment opportunities?

BuyProperly is an online platform for fractional real estate ownership: it gives investors with limited capital – as little as $2,500 – the chance to buy into a property without the headaches that usually come with being a landlord.

The expert team at BuyProperly thoroughly vets the high-value, high-growth, buy-to-let properties available for investment. And BuyProperly’s local property managers handle “landlording,” hassles: maintenance, improvements, tenant searches, rent collection…..

Investors can earn monthly rental dividends while watching the property value grow over time. If or when the property is eventually sold, all the investors can capitalize on the increase in equity.

Benefits of fractional ownership 

There are plenty of reasons why investors — particularly beginners with minimal capital or experience — might want to go the fractional investment route:

  • Minimum capital needed. Traditional real estate deals require tens of thousands of dollars (or more); fractional investing requires as little as a couple of thousand dollars to get started.
  • Increased diversification. Adding a real estate property to your investment portfolio is a great way to help you hedge against risk.
  • High return potential. Real estate is known to increase in value over time: this can help increase your returns, especially as renters help pay the mortgage.
  • Asset tangibility. Unlike stocks, real estate is a real-world asset, which can offer both growth potential and intrinsic value.
  • Tax breaks. When the property is eventually sold, you’ll get taxed only on capital gains, rather than having your entire return taxed as income.

 

How do you earn returns with fractional ownership? 

Like any other type of real estate investment, fractional ownership pays out in two ways:

  • Through rental income. Depending on how much you invest and your exact share in the property, you’ll collect rental income relative to your share.
  • Profit when the property is sold. Over time, the property will likely increase in value, which helps add to your equity in it. You’ll be able to recover your initial investment, plus your share of any profits.

 

 

Should you invest with BuyProperly?

 

If you’re interested in investing in real estate but haven’t yet, because of done so because of all the hurdles, BuyProperly may offer a solution.

In particular, BuyProperly may be an ideal investment platform for those who:

  • Want to invest a modest amount of money
  • Want to avoid managing the property and dealing with tenants
  • Want to diversify their investment portfolio
  • Want help choosing the right property to invest in

 

Our final thoughts

There are plenty of benefits to investing in real estate: passive income, regular cash flow, tangible assets that grow in value, investment diversification, and tax advantages. But getting involved in real estate investment can be tough for many. BuyProperly makes getting your foot in the door is much easier. You can start investing with as little as $2,500 and see potential annual returns of 10–40%. And you can kiss that fear of rejection goodbye.

in Editorial, Thought Leadership Posted by wpengine

Investment and Wealth Basics: Real Estate edition

Investment and Wealth Basics: Real Estate edition

Congratulations! If you’re reading this, chances are, you are currently saving enough money to start thinking about investments that work for you. Putting your money in the right place can help you get everything you’ve ever wanted: A beautiful house, early retirement, complete financial security for your family, and much more. You can either save your money or invest it in assets that you think will generate great returns. The latter, of course, is subject to several market risks but is saving as safe as it looks? Not quite. Dormant cash is prone to risks and it is nearly impossible for it to generate wealth. In the long run, the little interest that it could generate sitting in your bank account can cost you more money than it makes.

Why invest at all?

If the only way you can expect to earn from your savings is by putting them in a bank account -then we are happy that you are reading this. Let’s say you put $10,000 in a bank account that offers an annual interest of 3%(if at all!). By the end of the first year, you can expect to have $10,300. However, as per the current inflation rate (3.7%), something priced at $10,000 right today would cost $10,370 in a year, this means that you essentially earned $300 on your savings but still lost on purchasing power. This simple comparison highlights an extremely important relationship between inflation rates and interest rates offered by banks.

Source – Statista

Inflation eating into important savings like pension/retirement funds, college funds, emergency healthcare funds, etc., is a common occurrence. Before you realize it, you end up with less buying power than what you started with, thereby putting your financial future in jeopardy. However, Good investments ensure financial security through wealth creation, which in turn gives you the freedom to live your life to the fullest.

 

Investing in Canada

Simply put, Canada’s proximity to the U.S and numerous free trade agreements give Canada substantial power in world trade. Some of the largest Fortune 500 companies based out of the U.S (and even Europe, in some cases) have been choosing Canadian cities as ground zero for establishing their R&D hubs. With industry and immigration both converging, it is no wonder that real estate has seen unprecedented growth over the past few years.

As for the Canadian economy, it is expected to fully recover from the Covid slump within the next few months. The Government’s decision to lower the threshold for Foreign Direct Investments in 2021 has also massively helped this recovery. With a rock-solid economy and booming real estate market, Canada currently presents an incredible market opportunity for young investors.

Canada Investment Options

 

1. Buying a house

 

In a booming economy, real estate is an incredibly fruitful asset in terms of long-term investments and rent is one of the oldest, most trusted methods of generating passive income. Even if you aren’t looking for a rental property for investment, you can always look for a second home that would appreciate in value over time.  Almost every Real Estate option turns out to be a great asset if the neighbourhood and setting are correct.

2. REITs

REITs or Real Estate Investment Trusts are also a great option to explore as they allow you to invest in real estate without having to purchase different plots/houses. REITs are generally considered to be low-risk, high-yield investment options but these are long-term investment options. Any money you put in a REIT would have to be money you’re okay with not seeing for at least the next five years.  Another major drawback is that REITs give you no power to choose where you would like to invest – this lack of transparency is a major drawback.  The different types of REITs you can invest in are :

  • Equity REITs: These are funds that own and manage income-producing real estate. A part of the profits is naturally funneled back to the shareholders, who are free to cash out or reinvest it. Contrary to popular belief, equity REITs make most of their money through rent and not reselling acquired properties.
  • Mortgage REITs: As the name suggests, mortgage REITs lend money to real estate stakeholders directly (through loans) or indirectly by investing in mortgage-backed securities. (If that term sounds familiar, it’s because you have most probably come across it before while reading about the USA’s 2008 housing crisis!). These REITs mostly earn through net interest margin on hundreds of loans, which means they’re directly dependent on interest rates.
  • Hybrid REITs: These REITs (usually the largest) are simply funds that use both equity and mortgage-backed methods to make money. Hybrid REITs are considered to be the safest because of their diversified nature.
Source: https://static.seekingalpha.com/uploads/2020/8/11/1723581-1597191897564591_origin.png

 

Investing as a beginner

As a beginner, it can be challenging to navigate the complex world of real estate investment. The legal and technical jargon attached to most Real Estate investment options discourages investors from exploring them. Further, it takes up a sizable amount of your time and money to regularly manage these investments. But there‌ ‌is a better‌ ‌way‌ ‌to‌ ‌invest‌ ‌in‌ ‌property‌ ‌without‌ ‌taking‌ ‌out‌ ‌a‌ ‌huge‌ ‌mortgage‌ ‌fee‌, ‌paying‌ ‌a‌ ‌fee‌ ‌to‌ ‌the‌ ‌realtor or locking it away in a REIT.‌ ‌ With Fractional Real Estate Investing you are on your way to saving enough for buying your own home sooner than you thought and that too with no entry barrier and no hassle of maintenance or tenants – that is what BuyProperly does!

Fractional Real Estate Investment

BuyProperly provides the benefits of real estate investments’ high returns for everyday investors, without any barriers, pre-approval or hassle. They turn high-yield real estate into easy-to-invest opportunities, giving you the chance to grow your wealth in a quick and easy manner.

Unlike the traditional model of real estate investment, with BuyProperly you know that you are owning a slice of a high-yield property as our proprietary AI analyzes hundreds of factors and evaluates over 500 million data points to identify trends and uncover high-value deals to generate the highest returns for you. Also, we purchase and manage the real estate assets for you so you enjoy being a landlord without the usual headaches that tenants and maintenance bring. We also help eliminate the hassle that landlords often face in managing a property.  Contact info@buyproperly.com to know more about their best-in-class platform.

in Editorial, Thought Leadership Posted by wpengine
64 Hatt Street, Dundas, Ontario

With AcreageWay, Now You Can Invest In The Soaring Commercial Real Estate Market With As Little As $1,000

With AcreageWay, Now You Can Invest In The Soaring Commercial Real Estate Market With As Little As $1,000

Rising prices have locked many Canadians out of the real estate market — and the wealth gains that come with ownership.

“For too long, real estate has been behind closed doors and not accessible to everyone,” says Joe Accardi, Partner & CEO of Forge & Foster. “We want to bring real estate to all Canadians. And so does AcreageWay. Their new investment portal is something that we’re really excited about.”

What is AcreageWay?

AcreageWay is a new Ontario-based commercial real estate investment startup. It lets investors like you enter the commercial real estate market with as little as $1,000 and earn income from your investment.

“Commercial real estate requires a huge amount of upfront cash to gain entry, and that ranges from $500,000 to $1 million-plus, so a common investor who doesn’t have that much cash won’t be able to enter these opportunities,” AcreageWay president Aditya Koparde told the Globe and Mail. “Where we come into the picture is we’re fractionalizing these opportunities so they can invest.”

“For too long, real estate has been behind closed doors and not accessible to everyone.”

— Joe Accardi, Partner & CEO of Forge & Foster. 

AcreageWay lets you click to buy a percentage of a commercial property by investing in an equity portion of the property ownership.

AcreageWay provides a secure and regulated platform for you to buy fractional real estate in the form of tokens. All the transactions are documented and stored digitally through Blockchain technology.

What Are AcreageWay’s Main Benefits?

  • Investors do not need to get a mortgage
  • Investors do not need to pay a huge down payment
  • None of the pain of managing a property or being a landlord
  • No closing costs
  • You’ll get a share of rent and gains on the property when it’s sold
  • AcreageWay provides you with ongoing oversight and support
  • Every investment property undergoes a detailed due diligence process

AcreageWay is licensed by the Ontario Security Commission, which requires the company to put prospective investors through full due diligence to ascertain their risk threshold to determine their suitability for certain projects.

Why Invest In Commercial Real Estate in Hamilton?

“Hamilton is a high-speed, exciting, electric city that is primed to have an amazing decade,” says Accardi, whose Hamilton firm is committed to delivering optimal returns to investors by artfully restoring local real estate.

Properties like 64 Hatt St., which you can invest in on AcreageWay, offer tremendous upside potential through redevelopment.

64 Hatt Street, Dundas, Ontario
64 Hatt St. in the Hamilton community of Dundas.

The Millworks at 64 Hatt St. was founded in 1850. It’s an easy two-minute walk away from the historic and beautiful downtown Dundas community in Hamilton. All units boast brick & beam construction, large windows, and open-concept designs.

This historic brick & beam building has excellent accessibility with a Walkers Paradise Walk Score of 90. The property is professionally managed by Forge & Foster. With onsite parking and access to a back patio on the beautiful Spencer Creek, 64 Hatt St. is sure to attract AAA tenants.

HERE’S HOW TO LEARN MORE ABOUT ACREAGEWAY

It’s quick and easy for you to create an account at AcreageWay. So start your investment journey today. Visit acreageway.com/signup to create an account and invest in AcreageWay’s investment opportunities now.

start your investment journey today
in Editorial Posted by wpengine
1 West Hamilton Ontario

Imagine Joining This Reliable New Investment Opportunity Today For Free, Thanks To Forge & Foster

Imagine Joining This Reliable New Investment Opportunity Today For Free, Thanks To Forge & Foster

Soaring real estate prices have locked many Canadians out of the housing market — and the wealth gains that come with ownership.

“For too long, real estate has been behind closed doors and not accessible to everyone,” says Joe Accardi, Partner & CEO of Forge & Foster. “We want to bring real estate to all Canadians. addy is something that we’re really excited about.”

What is addy?

addy is a Vancouver-based start-up offering crowdfunded real estate investments to help all Canadians profit from the housing market.

“We’re investing in 150 addy memberships so that we can bring real estate to everyone,” says Accardi.

Since 2018, addy has been buying institutional-grade commercial real estate properties that investors can buy passive fractional ownership shares of for as low as $1 or as much as $1,500.

“We’re investing in 150 addy memberships so that we can bring real estate to everyone,” says Accardi.

That’s right: thanks to Forge & Foster, you can now skip the $25 membership fee. But only 150 of these memberships are available and they’re going fast, so act now!

How Does addy Work?

addy identifies investment opportunities and puts them through due diligence by looking at financial statements, then gets approval from an investment committee to ensure the property makes sense economically.

“There are no fees on transactions, acquisitions, or withdrawals because the goal of the platform is accessibility,” addy co-founder Stephen Jagger told The Globe and Mail.

“There’s no opportunity where we would ever win on a property and (investors) would lose,” Jagger said. “One of our core values of business is win-win or no deal so we are completely aligned with our crowd.”

Once addy acquires a property, it divides the investment into equal increments of $1. For example, a $500,000 property would be divided into 500,000 units.

Then investors can invest as little as $1 or as much as $1,500 in any building. Investments are locked in for various lengths of time depending on the building.

It’s different from a real estate investment trust (REIT) because investors know exactly what properties they have invested in.

1 West Hamilton Ontario
This is 1 West Ave. S. in Hamilton, Ontario. It’s a 3 storey mixed-use brick and beam office and retail space in the heart of downtown. It features a stunning mural called “Raise.” Through addy, this property sold out to 650+ Canadians. Shares, which were reseved exclusively for addy members, sold out in just 13 hours. Get your addy membership now for free, thanks to Forge & Foster.

What are addy‘s main benefits?

    • No fees — thanks to Forge & Foster waving the $25 membership fee
    • Pride of ownership
    • No need to qualify for a mortgage
    • No downpayment required
    • None of the pain of managing a property
    • No closing costs
    • No need to find tenants or maintain the property
    • You’ll get a share of rent and gains on the property when it’s sold

“Hamilton is a very fast, exciting, electric city that is primed to have an amazing decade,” says Accardi.

Some of the fast-growing asset classes Forge & Foster are excited about include:

      1. The film industry
      2. Tiny cottages and tiny homes
      3. Biotech

“Real estate is a top asset class, but most people can’t afford to invest in it,” addy CEO Michael Stephenson told the Toronto Star. “This is a way to make housing investments accessible to everyone.”

“We believe everyone should have the opportunity to own property through access to real estate investing at any amount, regardless of income, age, or other conflicts,” Stephenson told Yahoo Finance Canada.

“Join addy. Take a look at their projects. You can invest in a project that you’re excited about,” says Accardi.

What are the experts saying?

“I feel that real estate crowdfunding can be a viable tool for those who want to invest in real estate but are restricted due to a lack of money or credit,” says Mark Ting, CBC’s finance columnist, who is investing in addy with his children.

“Small investments in multiple projects add up over time. That makes it appealing for young people who want to get in the habit of investing — which now can be done in real estate for as little as the cost of a daily cup of coffee,” Ting says.

“A crowdfunded model comes with transparency and tangibility,” Tina Tehranchian, an Assante Capital Management Ltd. senior wealth adviser told the Globe and Mail. “You can drive by the property and boast to your friends that you have a share of ownership of this property.”

“Join addy. Take a look at their projects. You can invest in a project that you’re excited about,” says Accardi.

Behold 29 Harriet St. in Hamilton, Ontario. It’s a 21,200 square foot light industrial and office property with a stunning new bald eagle mural and huge potential. Through addy, this property sold out to 400+ Canadians. Shares, which were received exclusively for addy members, sold out in just 63 minutes! Get your addy membership today for free, thanks to Forge & Foster.

How to join addy

Sign up for addy now and skip the $25 fee, thanks to Forge & Foster.

Join Addy Now For Free Thanks to Forge & Foster
Join addy Now For Free, Thanks to Forge & Foster

(Psst: If you’re a good pal, you’ll tell your friends about addy so that they can grow their wealth, too!)

in Editorial, Thought Leadership Posted by wpengine

Junior Accountant

November 11, 2021, update:

Thank you for your interest. This job posting is no longer active.

Junior Accountant

Forge & Foster Investment Management

Hamilton, ON
Posted October 12, 2021
Full–time

Forge & Foster is committed to generating positive social and economic value for communities, tenants, investors, and other stakeholders through commercial real estate projects in Hamilton and across Southern Ontario. We bring vitality to cities as a leading value-add commercial real estate investment management company.

We are looking for a Junior Accountant to join our team. You will work in our small finance team in all aspects of finance and accounting.

To apply, please submit your
cover letter and resume
via e-mail to
info@forgeandfoster.ca

RESPONSIBILITIES

Your tasks will include, but may not be limited to, the following:

  • Help maintain the books for the real estate portfolios, including processing payables and receivables
  • Assist with monthly, quarterly and annual close-outs of the books
  • Generate financial statements to complete the monthly, quarterly and annual reporting packages
  • Process cheques, management fees, leasing fees and chargeback invoices to tenants
  • Assist in the creation of annual TMI adjustments and invoice and collect from or prepare refunds to tenants
  • Work with the property managers to review and post rent rolls
  • Support the property manager in answering tenant queries
  • Review and update tenant lease information in our Rent Manager software program

REQUIRED SKILLS & QUALIFICATIONS

  • A degree in finance or accounting
  • Can excel in a high volume, fast paced environment
  • Hard working and organized
  • Ability to solve problems and work independently
  • Strong Excel skills
  • Strong communication skills

Thank you for your interest in this exciting opportunity.

To apply, please submit your cover letter and resume via e-mail to info@forgeandfoster.ca

Job Type
Full-time, Permanent

Pay
From $40,000.00 per year

Additional Pay
Bonus pay

Benefits

  • Casual dress
  • Dental care
  • Extended health care
  • On-site parking

Schedule
Monday to Friday

Work Remotely
No

in Careers Posted by wpengine

Real Estate Analyst

Real Estate Analyst

Forge & Foster Investment Management

Hamilton, ON
Posted October 12, 2021
Full–time

Forge & Foster is committed to generating positive social and economic value for communities, tenants, investors, and other stakeholders through commercial real estate projects in Hamilton and across Southern Ontario. We bring vitality to cities as a leading value-add commercial real estate investment management company.

We are looking for a Real Estate Analyst to join our team.

You will assist in all aspects of our business including acquisitions, dispositions, financing, asset management and accounting. This position requires strong problem solving skills, good organizational skills and an ability to work independently. Previous real estate experience or a strong interest in real estate is considered an asset.

To apply, please submit your
cover letter and resume
via e-mail to
info@forgeandfoster.ca

RESPONSIBILITIES

Your tasks will include, but may not be limited to, the following:

  • Assist in the execution of property business plans including tasks related to leasing, construction, land entitlement, environmental remediation
  • Assist in creating design packages and lease proposals for prospective tenants
  • Assist in underwriting and preparing investment proposals for new acquisitions
  • Assist in creating mortgage proposals for lenders
  • Provide due diligence documentation for any properties being sold

Thank you for your interest in this exciting opportunity.

To apply, please submit your
cover letter and resume
via e-mail to
info@forgeandfoster.ca

Job Type
Full-time, Permanent

Pay
From $40,000.00 per year

Additional Pay
Bonus pay

Benefits

  • Dental care
  • Extended health care
  • On-site parking

Schedule
Monday to Friday

Work Remotely
No

in Careers Posted by wpengine

Forge & Foster Brings an Exciting Development to Canada’s Prettiest Town

Forge & Foster Brings an Exciting Development to Canada’s Prettiest Town

April 22, 2021

Paris, ON – Forge & Foster Investment Management

Hamilton-based Forge & Foster Investment Management is launching an exciting new development in “Canada’s prettiest town,” The Walker Press located in Paris, Ontario.

With an eye for identifying properties with distinct character and a unique history, Forge & Foster acquired the exquisite Walker Press building in 2020.

The Walker Press will be restored into a multi-use, commercial facility that will richly contribute to the growing community of culinary and craft-goods experiences in experience in Paris.

Located on 3 Yeo Street, with the oldest portion of the structure – the Maxwell wing – built in 1872, The Walker Press (est. 1910) moved into the Penman Wing in 1915.

Expanding into the Maxwell wing in 1920, connecting the two buildings in the process, they operated for over 60 years, printing everything from gift coupons to royal portraits.

With its proximity to the historic downtown district of Paris, surrounded by thriving densification projects, and rooted in a destination that is only a short drive from the urban centres of Toronto, Hamilton, Kitchener-Waterloo and Cambridge, The Walker Press is the perfect location for multiple emerging businesses ranging from culinary and retail, to office and light-industrial.

“Paris is a beautifully historic town and an incredible destination, we are thrilled to play a role in reviving this property and writing its next chapter,”

said Ben Ames, Partner and CIO.

“The Walker Press will be an idyllic and innovative setting for a new generation of Paris-based businesses. A perfect setting for emerging industries and employment opportunities in ‘Canada’s prettiest town,’”

said Joe Accardi, Partner and CEO.

Forge & Foster greatly acknowledges and thanks The Paris Museum & Historical Society for all their support in understanding the background of The Walker Press.

About Forge & Foster Investment Management

Forge & Foster is an investment and asset management firm, committed to delivering optimal returns for its investors and partners through inventively restoring and growing communities across southern Ontario.

This is done through unique property-asset investment, development, relationship and business support initiatives, including revisioning spaces, capitalizing on emerging markets and models, and forecasting future trends and opportunities.

Forge & Foster are the masterminds behind projects like the restoration of 1 West Ave. and The Ironwood, two of Hamilton’s premiere, artfully restored, vintage office buildings.

Current initiatives include leading developments in Hamilton’s up-and-coming Innovation District, cultural live-work spaces in the urban centres of each Hamilton, Brantford, and Cambridge, film industry spaces in Hamilton’s Hollywood North corridor, and tiny-homes projects in the beautiful, up-and-coming Goderich/Bluewater region.

in Editorial, Media Posted by wpengine

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