Soaring real estate prices have locked many Canadians out of the 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 FrontFundr is something that we’re really excited about.”
WHAT IS FRONTFUNDR?
FrontFundr is Canada’s leading online private markets investing platform and an exempt market dealer.
Founded in Vancouver in 2013, the startup’s mission is to democratize the private sector investment model by offering companies an alternative to venture and private equity investing.
FrontFundr provides investors with the opportunity to invest in startups and growth companies. Their online platform allows all Canadians — from professionals to first-time investors —to support the ideas and initiatives they want to see succeed.
The company has built up a community of over 34,000 users, run over 100 successful funding campaigns, and helped businesses raise more than $120 million so far.
“You might think you can only invest in Wealthsimple and public stocks, but you can also invest in early stage companies from the very beginning.”
“We’re missionaries to spread the word around equity crowdfunding, in general,” says Peter-Paul Van Hoeken, the founder and CEO of Silver Maple Ventures, FrontFundr’s parent company. “Creating awareness has been a huge job for our company in the last five years. You might think you can only invest in Wealthsimple and public stocks, but you can also invest in early stage companies from the very beginning.”
The popular destination boasts quaint cabins, RV rentals, and sites for tents and RVs. However, there is plenty of opportunity for improvement and expansion.
Situated at the gateway of the world-famous Cape Breton Highlands National Park and just off the Cabot Trail, this real estate investment property is packed with potential. And Forge & Foster is ready to unlock that potential through its unparalleled expertise in real estate management.
“Never before have people had the opportunity to invest in spectacular real estate like this, starting at just $1,000.”
Joe Accardi, Partner and CEO at Forge & Foster Investment Management, said, “This is a very special opportunity for investors and we’re excited to offer it through our trusted partner, FrontFundr. Never before have people had the opportunity to invest in spectacular real estate like this, starting at just $1,000.”
WHY FRONTFUNDR?
Here are the main benefits of investing in real estate through FrontFundr:
No fees
Pride of ownership
No need to qualify for a mortgage
No down payment 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
You’ll receive ongoing oversight and support
Every investment project undergoes a detailed due diligence process
“Join FrontFundr. Take a look at their projects. You can invest in a project that you’re excited about,” says Accardi.
⭐⭐⭐⭐⭐ Great platform to invest in early stage enterprise The investment process was straightforward and well explained. —Jean-Philippe Deblois, Trust Pilot
⭐⭐⭐⭐⭐ Great platform that is intuitive and easy to use! Good access to detailed prospectus and pitch info. The digital signing process is simple and efficient. Private company investing has never been this easy or accessible. — Ken Smith, Trust Pilot
⭐⭐⭐⭐⭐ I feel fully confident that I am making sound investment decisions for myself. FrontFundr is an essential platform to democratize investing into early stage companies that have huge potential to add value. — Leon Lie, Trust Pilot
WHAT ARE THE EXPERTS SAYING?
“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.”
“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. “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.”
“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.”
Are you a brand new investor ready to start growing your real estate portfolio? Maybe you have a few investments and you’re eager to diversify and learn more about multifamily real estate investing.
No matter where you are in your investment journey, diversifying your real estate portfolio is a fantastic way to generate more cash, reduce risk, and grow your wealth.
If you’re in the market for a new investment, a multifamily property may be the perfect fit for you and your goals. Below, we’ll discuss the pros and cons of multifamily investing, along with our top tips for how you can find your first (or next) multifamily property deal.
What is multifamily real estate?
A multifamily home is essentially a single building that’s separated into units, or dwellings, to accommodate 2 to 4 families. This includes duplexes, triplexes, and quadruplexes.
Anything above 4-units is considered a “commercial” property. A house or apartment with only one dwelling is simply considered a single-family.
According to Statista, multifamily property investing shows no signs of slowing down! In 2023, there will be an expected 5.39 million multifamily properties in Canada, which is an increase from 4.96 million in 2018.
What are the pros of multifamily real estate investing?
Multifamily properties offer some incredible benefits to real estate investors. Here are some of the top reasons you should consider adding multifamilies to your real estate portfolio:
Owner-occupied arrangements
One of the biggest pros of multifamily family real estate investing is the ability to have an owner-occupied real estate investment. This means you can buy the property and live in one unit while renting out the others and collecting cash to pay down the mortgage!
This is a great opportunity to “house-hack” and start building equity in real estate quickly.
More cashflow
Another pro of multifamily investing is that your cash collected will accumulate faster. More units to be rented means more cash, which allows you to reinvest and continue building your real estate portfolio.
Less risk
Multifamily properties generally reduce your risk of full vacancy. Unlike single-family homes (when losing a tenant means you’re at 100% vacancy) multifamily properties give you the opportunity to spread out cash flow between 2-4 dwellings.
This means a non-paying tenant or sudden vacancy won’t hit you (and your bank account) as hard.
Simplified management
Looking after several “doors” under one roof tends to be easier on managers. There are fewer independent buildings to keep track of and less travel required for inspections, emergencies, and general maintenance. This means you’ll save on property management fees, and you’ll have fewer headaches if you manage the property yourself.
Tax benefits
Owning multifamily properties means you can take advantage of great tax benefits. You’re able to deduct maintenance fees and operating costs including utilities, management fees, insurance premiums, and marketing costs.
What are the cons of multi-family real estate investing?
Although there are some incredible benefits to owning multifamily properties, there are some drawbacks that come along with this type of investment.
Let’s go over them in detail.
High market entry costs
Generally, multifamily properties are significantly more expensive than single families which limits many people from being able to start with this type of investment. The price tag is often hundreds of thousands (or even millions) of dollars depending on your market.
Higher degree of management required
Many investors choose to manage single families and duplex properties on their own, but once you start investing in 3 and 4-unit buildings, property management becomes incredibly important.
Great property managers will help keep your units full of happy tenants by filling vacancies quickly, collecting monthly rents, performing routine maintenance, responding to requests for repairs, and conducting regular inspections of the building.
More units means more tenants which, inevitably, means a higher degree of management is needed to keep the property cash flowing.
Expensive maintenance
Multifamilies tend to incur higher maintenance costs. Instead of maintenance and repair costs on one unit, multifamily investors need to worry about 2-4 units! This cost is easily offset by the increased cash flow, but new investors should be prepared for potentially higher maintenance and repair costs upfront.
The good news?
No matter which type of property you choose to invest in, you can do it even with limited cash on hand. Through fractional investing, BuyProperly allows people to invest in real estate for as little as $2500. This means your dreams of adding a rental unit to your portfolio are 100% achievable! Want to learn more? Visit www.buyproperly.ca to get started on your real estate investment journey.
What should you look for in multifamily real estate investing?
The property you purchase should 100% depend on your goals.
If this is your first real estate investment or if you’re hoping to “house-hack” and buy something smaller to offset your mortgage costs, a duplex is a great option. Similarly, if you want to manage the property yourself and keep your portfolio small, stick with a 2-unit.
If you’re working with investment partners, you want more cash flow, or you’re looking to grow your portfolio quickly, consider a 3 or even 4-unit property!
You should also consider how much time and money you’ll have to dedicate to your new investment.
If you’re a full-time investor ready to dive in and you’re not afraid of some hands-on management, a larger building may not seem so intimidating to you.
Many of the investors who purchase multifamilies through BuyProperly are looking for a more “passive income” project where they can grow wealth and see returns without having to be involved in the day-to-day management. If that sounds like you, sign up to view a list of their available properties.
We’ll talk more about how to evaluate multifamily properties in a moment.
How to find your first multifamily real estate deal
If you’ve weighed the pros and cons and decided multi-family real estate investing is the way to go, it’s time to find your first property deal!
The first thing to do when you’re looking for the right multifamily property is to contact a local realtor. They often have connections, opportunities, and deals that aren’t listed on public websites. They also tend to have great networks with other investors who may be interested in partnering with you.
Second, join all the local networking groups you can. Find Facebook groups, forums, and local meetups to connect with other investors to talk about real estate. Some of the best deals can be found through word-of-mouth and networking!
Third, consider investing out-of-town. If your local market doesn’t have a lot of availability or it’s too expensive, consider expanding your property search to neighbouring towns and cities. With the right management company, out-of-town multifamily investments can be incredibly lucrative!
Ready to invest in your next property deal?
BuyProperly offers people an opportunity to get into the real estate market using a fractional investing model. This means you can start with as little as $2,500 and see projected annual returns of 10-40%. See a list of their available properties right here.
How to evaluate a multifamily property for sale
Unlike single-family properties, multifamily units tend to be more complex and there are several factors to consider when trying to figure out whether or not to make an offer on that listing!
Here are some important things to keep in mind:
Total units
Does the multifamily property you’re considering have 2, 3, or 4 units? How does this fit your goals? Keep in mind, larger properties may come with a larger price tag but they also yield higher returns.
It’s also important to know your local rules and requirements. In some areas, triplexes and quadruplexes must be registered with the city and cooperate with additional yearly inspections. Speak with your local realtor and city officials to learn more.
Potential cashflow
Cash flow is everything and all potential investors need to have a realistic picture of how much money they can collect every month.
How much rent are tenants currently paying each month? Also, how much rent could you potentially charge based on the condition and location of the property?
Operating costs
Cash flow is obviously incredibly important, but it doesn’t mean much if the operating expenses put you in the red each month!
Make sure to collect information about all the ongoing operating expenses for the property so you can properly calculate your net profit. This includes taxes, utilities, insurance, management, etc. Don’t forget to account for potential vacancies in your calculation (it’s a safe bet to assume a 10% vacancy).
Repairs needed
When assessing whether or not to buy your next multifamily, it’s important to carefully consider all upcoming repair costs. Because multifamily buildings tend to be larger than single families and have more units to take care of us, those upfront costs are normally higher.
When purchasing, make sure you have enough money in the bank to make the necessary repairs to keep your new tenants!
CAP Rate
Calculating Cap Rate is important because it tells you how quickly you’ll be able to pay off your investment. It’s a quick snapshot of your income and expenses as they relate to the price of your property.
Here’s how to calculate it:
First, find out your gross income (rent) each month and multiply it by 12 to get your number for the year.
Next, subtract all of your operating expenses for the year. This will give you your yearly net operating income.
Gross income – operating expenses = net operating income
Now, divide the net operating income by the total purchase price. Multiply this number by 100 and you’ll have your Cap Rate. The higher the Cap Rate, the higher the annual return on investment, and the quicker you’ll make your money back!
Generally, most investors like to stay above a 4% Cap rate. This varies from person to person and it’s important to consider your personal goals when using Cap Rate to assess a real estate deal.
Location and rental potential
The location of a building plays a crucial role in assessing its’ future cash flow potential. How desirable is the area? Is it near schools, shopping malls, and other city services? How is transportation to and from the location? Are there any plans to develop the surrounding area OR add neighbourhood features that would make the property even more attractive?
Location is everything and it’s an important consideration when buying your next multifamily property!
Conclusion: Should you invest in multifamily properties?
Multifamily real estate is an incredible opportunity for both new and seasoned investors.
These deals can help you grow your portfolio quickly, provide increased cash flow, and reduce your vacancy risk. You’ll also be able to take advantage of some great tax benefits.
But, multifamily isn’t right for everyone. If you’re prepared to handle multiple tenants (or pay a property manager who can) and you’re not scared away by higher operating costs and maintenance fees, you should strongly consider adding a duplex, triplex, or even quadruplex to your portfolio!
4 Ways to Find the Ontario Neighbourhoods Poised for Peak Appreciation
Looking to invest in real estate? If so, how do you know which suburb is the right one to invest in? As an investor, you’ll want to be in the know of neighbourhoods that have a high likelihood of appreciating.
We’ve broken down the four ways to know if an Ontario suburb is poised to beat the rest.
There are several neighbourhood statistics you can use to determine if a neighbourhood is up and coming:
1. Municipality demographics
Each city releases data such as crime and unemployment rates as well as the average household income. In particular, a declining crime rate is a good indication of an upcoming suburb. Typically unemployment rates and average household income can be found on a municipality website. Crime rates can also be found on a municipality or regional police website.
2. Ratings and rankings
It’s also a good idea to take a look at rankings from real estate and financial leaders such as ReMax and Macleans.
These websites not only look at statistical data, but they also consider factors like proximity to amenities and services, as well as walkability.
For example, ReMax releases a Canada liveability report each year that includes factors such as walkability, driveability, and access to green space. A suburb that is walkable and close to amenities and services like work, healthcare, and grocery stores is a good sign that it’s up and coming.
Maclean’s, also provides insight with their annual report on Canada’s Best Communities. In addition to an overall ranking, Maclean’s also provides rankings based on families, retirement, weather, and affordability. If a community is rising through the ranks on Maclean’s year after year, that’s definitely a community worth considering.
3. Construction projects and new buildings
Although it can be a pain for current residents, construction and major developments means a thriving community. Revitalization and upgrading projects such as replacing street lights as well as fixing potholes and sidewalk cracks are healthy signs of growth.
To see what construction projects are underway, municipalities typically have a building and construction page on their website where you can see what projects are going on.
In addition to neighbourhood projects, major developments like a building restoration, high rise condominiums, and new office or retail space is a sign a neighbourhood is on the rise.
One way to find out about new construction projects is through the release of municipal building permits. New buildings and businesses are typically an indication of economic activity and a means to attract more people into a neighbourhood.
4. Sales data
Real estate sales information can be used to measure a neighbourhood’s growth. Useful data points to look at include the average days listing spend on the market, average or median sales price, and total sales.
If there’s a decrease in the average days spent in the market, and an increase in the average sales price and total sales, that’s an indication of a growing market.
You’ll also want to look at the trends year after year in these data points. If the average days listed rate has trended downward over the years and the average or median sales price has been increasing over the years, that’s a sign of an upcoming market. Real estate sites like Zolo provide market insight into Canadian cities like Hamilton.
Knowing if a neighbourhood is in a buyer’s or seller’s market can gage whether or not a neighbourhood has a high likelihood of appreciation.
In a buyers market, there’s more supply and less demand meaning the buyer has the power to negotiate better deals. In a seller’s market, there’s more demand and less supply meaning the seller has the power to negotiate deals.
The sales-to-listing ratio in a seller’s market is generally at 60% or more, which translates to six or more sales for every ten new listings.
However, in a balanced market, the ratio is between 40% and 60%, and in a buyer’s market, you’re looking at fewer than 4 sales for every 10 new listings.
When researching upcoming neighbourhoods, you’ll want to know if it’s in a buyer’s market because you’ll buy real estate at a lower price and have a better opportunity for appreciation.
4 Up-and-coming neighbourhoods in Ontario
With the considerations mentioned above, here are four Ontario neighbourhoods we believe are on the rise:
Beasly, Hamilton, Ontario
Neighbourhood statistics
Before the pandemic, Hamilton boasted the lowest unemployment rate of 3.7% out of all of the cities we analyzed in 2019. This trendy downtown Hamilton neighbourhood ranks number one as the most liveable neighbourhood in Hamilton in ReMax’s 2019 liveability report. The neighbourhood has a lot of shops and restaurants and has a walkability score of 80.
The real estate market in Beasly is a seller’s market. It’s hot with a 34% year-over-year increase in housing prices and has an average of 22 days that houses spent on the market.
Centretown, Ottawa, Ontario
Neighbourhood statistics
Before the pandemic, Ottawa boasted a low employment rate of 5.1%. Located right next to the University of Ottawa and only a 10 minute walk to Parliament Hill, it’s no surprise that Centretown is one of the top liveable neighbourhoods in Ottawa according to ReMax’s 2019 liveability report.
Construction projects and new buildings
Over the past year, new high rise condo buildings and restaurants have come up. In fact, the City of Ottawa currently has a city wide official plan to become a more compact and affordable city. Included in this plan are new high rise urban zoning provisions and various area traffic management measures in Centretown.
Sales data
The real estate market in Centretown is a buyer’s market. It’s booming with a 25.4% year-over-year increase from October 2019 to October 2020 and houses spend an average of 14 days on the market.
Kitchener Centre, Kitchener-Waterloo, Ontario
Neighbourhood statistics
Before the pandemic, Kitchener also had a low unemployment rate at 5.7%. With a school of pharmacy and growing number of tech offices popping up in the area, Kitchener Centre ranks #1 as the most liveable neighbourhood in Kitchener according to ReMax. The neighbourhood has a lot of revamped buildings and has a walkability score of 89.
The real estate market in Centretown is a buyer’s market. Kitchener itself has seen a 49.3% year over year increase from October 2019 to October 2020 in housing prices and houses spend an average of 12 days on the market.
The surge in development of this neighbourhood can be attributed to the Pan Am Games, where Corktown Common was used as the Athlete’s Village. Since then, the neighbourhood has been growing. A number of new high rises have been and are still being built despite the pandemic. There have been talks about a Corktown Station being added when the GO Train Ontario line is built.
Whether you are interested in personal home buying or investment real estate, these tools will allow you to effectively evaluate the value and potential of any given neighbourhood.
With these considerations, you’ll be able to discover up-and-coming neighbourhoods and achieve a high appreciation on your investment.
However, if you are looking for a simpler and even more reliable option, investing through BuyProperly could be a great option for you.
BuyProperly works by allowing investors — both novice and experienced — to enter the real estate market through fractional investment. For as low as $500, you can own a piece of an investment property, without the burdens of putting together a hefty down-payment, finding and managing tenants, or dealing with property maintenance issues.
BuyProperly assures investors that each property they acquire has been evaluated from top to bottom, starting with the methods highlighted in this article. BuyProperly’s goal is to make it as easy and risk-free as possible for you to invest.
If you’re interested in real estate investing, but the property evaluation process is too much for you to deal with, rest assured that by investing with BuyProperly, all the research and evaluative work has already been done for you.
Investing in real estate can be an incredibly rewarding and lucrative endeavour, but if you’re like a lot of new investors, you may be wondering why you should be investing in real estate and what benefits it brings over other investment opportunities.
In addition to all the amazing benefits that come along with investing in real estate, there are some drawbacks you need to consider as well.
We’re going to cover the 7 top reasons why you should be investing in real estate (and a few reasons you may not want to jump in right away!)
Opportunity for Cash Flow
Purchasing real estate to rent out for additional cash flow is becoming a very popular investment strategy, and it’s easy to see why.
Not only do rental properties give you the opportunity to generate additional cash flow month-over-month, but they allow you to build up a portfolio of long-term, stable assets and benefit from all that appreciation over the life of your investments.
There’s another big advantage to cash flow: it provides an opportunity for new real estate investors to “house hack”.
It’s no secret that real estate prices are going up and pushing a lot of new investors out of the market. When you decide to purchase a rental property, you can use the cash flow to fund your living expenses and pay your mortgage down faster to continue investing in more real estate!
Many newbie investors buy duplexes or houses with additional dwellings to make extra cash to fund their real estate business.
If you’re looking for a way to buy into the real estate market without having to spend hundreds of thousands of dollars, check out the properties at BuyProperly. They use a fractional ownership model that allows investors to start with as little as $2,500.
High Return on Investment
Another major benefit of real estate investing is the ability to make a high return from buying, renovating, and reselling (a.k.a. house flipping).
Although this requires significantly more upfront cash than rental properties, there’s huge potential for profit if you buy the right property.
Most flippers look for undervalued buildings in great neighbourhoods. These properties need work (and money!) to get them up to average market value, but, once renovated, the returns from these resales can happen relatively quickly.
Appreciation
The wonderful thing about investing in real estate is that the value of the property is expected to appreciate. The principal amount that you invested in the property will grow over time and should be worth more than what you paid for it when you purchased it.
Real estate is a fantastic long-term investment because it’s almost always guaranteed to appreciate in value.
Investors patient enough to buy and hold their properties will benefit from predictable appreciation year-over-year. Depending on where you buy, you can expect annual appreciation rates anywhere from 2-8%.
Another major advantage of investing in real estate is all the tax benefits you’re eligible to take advantage of!
Many investors can write off costs associated with depreciation, mortgage interest, operating costs, repairs, and property tax. These incredible tax benefits are a fantastic way for investors to save and build wealth.
For example, if you are charging $2,000 rent per month and you incurred $1,500 in tax-deductible expenses per month, you will only be paying tax on that $500 profit per month. That’s a large difference from paying taxes on $2,000 per month.
The profit that you make on your rental unit for the year is considered rental income and will be taxed accordingly.
It is vital that you keep good accounting records on your investment property. If you are claiming maintenance and repairs, for example, be sure to keep those receipts as proof. If you are to be audited by the government and can’t supply the proof of expenses in form of official receipts, chances are you will be disqualified from claiming those tax deductions.
The appreciation of the property will be assessed when you dispose of the property and capital tax will come into play.
You will be taxed on the capital gains that you earned on the property from when you invested and purchased the property to the day you sold it. The difference between the sale price and the price you paid to purchase will be the capital gain, which will be taxed, but only in the year that you dispose of the property.
Low Volatility
Real estate isn’t subject to the same volatility as other kinds of investments. Unlike stock trading, the real estate market isn’t like to have the same massive overnight shifts.
For this reason, it’s an option for people who want something more stable and predictable. It’s a great addition to a more risk-averse portfolio, making it an all-around fantastic investment.
It’s important to note that real estate investment doesn’t come without risk. The US housing market crash of 2008 showed investors the importance of not over-leveraging and making smart investment decisions when growing their portfolios.
This means you can put 20%, 10%, or even 5% down and control an asset worth significantly more than that.
It also means you have the ability to borrow against your assets to continue investing. This creates a snowball effect and, when done effectively, can skyrocket the value of your investment portfolio.
Passive Income
This last point ties into the other benefits we’ve mentioned above. Rental income aside, real estate accumulates passive wealth through its inherent tax benefits and long-term appreciation.
In addition, the rental income you collect can be done with minimal involvement and effort. With the right property managers and rental team, the ROI on your investment becomes relatively passive.
At BuyProperly, they help investors start with as little as $2,500 and see projected annual (passive) returns of 10-40%! Find out how.
What are the cons of investing in real estate?
Real estate is a fantastic investment to add to your portfolio, but it doesn’t come without risk. Here are a few things all new investors should consider before jumping in.
Upfront costs
It’s no secret that investing in real estate the traditional way takes a substantial amount of money. If you’re buying a property to live in, expect a minimum of 5% down plus closing costs. Most investment properties and second homes may even require a 20% down payment to buy.
Real estate isn’t cheap, and it’s important for new investors to be prepared for the costs.
At BuyProperly, they leverage a fractional ownership model to allow investors to buy real estate for as little as $500. This means they can get started quickly without having to wait and save up huge lump sum deposits for investment properties.
Sourcing deals
In addition to financial costs, investing in real estate comes with a significant time cost when you take into account sourcing property deals
Unlike buying and trading stocks which can be done with the click of a mouse, property investment often requires more time, research, and preparation.
Not only do you need to find great deals, but you need to analyze them and gather the necessary paperwork to get the deal done. On top of this, if you don’t have a good team in place, managing your repairs, maintenance, and tenants can turn into an overwhelming process.
Fortunately, sourcing great deals doesn’t have to be complicated. At BuyProperly, for example, they’ve created an AI-powered platform that allows investors to view, buy, and sell real estate digitally (much like they would trade stocks).
Difficult to unload
As much as we love real estate for its security and predictable returns, it’s not the type of investment that can be bought and sold quickly. In fact, the highest returns are earned when investors are willing to buy and hold.
If you think you may need to free up cash quickly, or if you’re looking for an exceptionally quick profit, real estate may not be your main investment vehicle.
Conclusion
Investing in real estate has several major advantages. In addition to cash flow potential, you can also take advantage of steady appreciation, reduced volatility, and investor tax benefits.
It’s important to remember that real estate is a fantastic long-term investment, and not well suited to people who want instant returns. It’s a reliable, predictable asset with great cash flow and ROI potential.
Real estate is a great addition to any investor’s portfolio.
Interested in learning how you can get started in real estate investing for as little as $500? Learn more at www.buyproperly.ca
There are many types of real estate investments that are available for people ready to jump into the market. Many feel that real estate investing is a solid way to grow wealth with prosperous returns, and the outlook for the housing market in 2022 remains positive.
Fortunately, there are several ways to invest in real estate. No longer are you limited by the traditional barriers of entry like large down payments and excellent credit scores. There are now many different kinds of real estate investments that a person can pursue.
From residential and commercial to wholesaling and REITs, there are several ways to jump into the real estate market in 2022 and beyond.
Whether it is residential, commercial, or industrial properties, these tangible assets have provided countless investors with superior returns.
Let’s look at the various real estate investment strategies designed to give your portfolio a solid return.
1. Residential investing
Residential investing is likely the most common way to invest in real estate. This is when an investor buys a single-family home, duplex, or multi-family building, and either flips it for profit or holds it as a rental property.
The purchase of this kind of real estate may be done with the use of financing or cash.
When people invest in residential real estate, they are typically purchasing a property to use it in one of four ways:
2. Long term rentals
In this situation, investors purchase a property such as a house, duplex, or apartment building that they rent out to tenants to live long term. This allows investors to maintain a steady cash flow and pay for expenses as the property appreciates in value.
The tenants are tied to a monthly rent payment (a lease) to live there, and the investor is the responsible landlord. The investor has the option of being the landlord themselves or hiring a property maintenance service to act on their behalf. Typically, tenants sign long-term rental agreements usually set for a year or longer.
3. Short term rentals
Vacation properties are ideal for this kind of real estate investment. Often, the investor will purchase a cottage, chalet, or vacation home in a highly desirable location and rent the property out on a weekly or monthly basis for guests.
This type of investment is ideal for vacation hot spots where the property will be in high demand. Again, the investor can manage the property themselves or hire a property maintenance service to take care of it for them.
When investing in rental properties, it’s also important to consider the tax implications. Because these properties generate income and are not considered a “primary residence”, owners should be aware of specific tax ramifications in their area. In addition, when investors sell these rentals, there will be a capital gains tax to pay on the sale.
Make sure to check your provincial and federal guidelines to learn more.
4. House flipping
The idea of house flipping is to buy a lower-priced fixer-upper property below market value and invest the time, energy, and money into renovating the property before selling it at a premium.
Provided the property’s purchase price reflects the amount of work that needs to be put into the structure (and allows for a profit), it can be a good way to invest in real estate.
This method of house flipping only works when you can sell at a profit, which would be the sale price less purchase price and renovation costs. The profit on the sale is taxable income.
5. New construction
Purchasing new construction is an option people consider during hot markets. Typically, the down payment on the property is required far in advance before the house is ready to inhabit.
Many investors purchase these new sales and resell them at fair market value when the home has been constructed and ready to inhabit. The idea is that the house’s fair market value would have appreciated from the time the down payment was placed to the time the home was ready to inhabit.
This income would be considered taxable.
6. Commercial investing
Investing in commercial property is another kind of real estate to consider. Typically, the investor purchases a commercial building to rent out to businesses.
Business owners also consider investing in this kind of real estate to own the building that they run their business out of. This saves the business on paying rent and, instead, they are able to put money towards building a very lucrative asset.
7. Raw land
Raw land is completely uncultivated and untouched real estate. It doesn’t have roads, houses, or any other buildings. Investors who choose to purchase raw land are taking a chance that, based on the location and projected market demand, this land will appreciate in value.
The more the price of the land increases, the higher return on investment (ROI) there is.
Many investors purchase raw land expecting to sell it to developers.
If someone purchases a piece of raw land and expects to wait years before they can capitalize on that acreage, then it’s important to consider that appreciation in price as opposed to immediate profit for this kind of real estate investment.
Third-party real estate has become an intriguing option that makes real estate investing more accessible to people who want to invest in real estate but don’t have the down payment or credit rating to enter the market.
There are various types of third-party real estate investments such as fractional real estate investing and real estate investment trusts (REITs).
Fractional real estate is a collaborative group of people who pool assets together to purchase smaller shares of a property. The advantage of fractional investing is that these investors don’t have to know each other to get started. A platform like BuyProperly connects investors from across the country and allows them to pool their resources to invest in a property.
Being a fractional real estate owner means that you own a part of the investment, depending on your financial contribution, and you reap that reward on a fractional basis. This is passive income if you are not directly involved in the management of the property.
REITs are like mutual funds in the sense that there is a portfolio, or pool, of real estate properties that are managed by a management group. You can purchase shares in that investment and get paid out dividends on a per-share basis. The value of that share can increase over time as well.
9. Wholesaling
Wholesaling real estate can be a tricky endeavour, depending on where you live. A wholesaler is someone who pays cash for a property that has equity, then fixes the property up and quickly resells it to another buyer at an inflated price.
The key to being successful with this type of real estate investment is that you need to be able to purchase the property quickly and recover your costs within a short period of time.
What is the best type of real estate investment?
The best type of real estate investment is the type that you’re most comfortable with, falls within your budget, and meets your financial goals. If you want to invest in rental properties but don’t have enough capital for a whole building, then purchasing condos would be the next best option as opposed to just owning raw land or commercial buildings that do not generate income.
Fractional investing is also a fantastic option for people who don’t have the upfront capital or time to manage and oversee a rental property.
Conclusion
The bottom line is that real estate investing has earned a good reputation over the years as being a reliable way to get your money working for you. As you can see, there are many kinds of real estate investing opportunities at your disposal. It’s about finding an investment vehicle that is right for you.
Investing in real estate can be worthwhile as it has historically offered impressive returns through cash flow potential and long-term appreciation. Real estate is a great way to diversify your investment portfolio.
Whichever way you choose to invest in real estate, be sure to do your research, educate yourself on the pros and cons of the investment, and make an informed decision before you jump in.
If you’re ready to find your next investment property, BuyProperly is here to help. At BuyProperly, they use a fractional ownership model to help investors get started for as little as $2,500 (plus, they can see projected annual returns of 10-40%).
The Pros and Cons of Investing in Single-Family Homes
There is no doubt that investing in real estate is a smart move for anyone looking to secure their financial future. But when it comes to building a lucrative real estate portfolio, there are a few different options to choose from.
One of the most popular choices is investing in single-family homes. In this article, we will take a look at the pros and cons of investing in single-family homes to help you decide if this is the right type of investment for you.
First, let’s define the main types of residential investments:
Single-family: A property that has one available dwelling to rent.
Duplex: A property that has two available dwellings to rent.
Multi-family: A property that has three or more available dwellings to rent.
Let’s start by looking at all the pros of investing in single-family homes.
High Returns
Single-family homes are a great choice if you’re looking for steady appreciation with a good return on investment.
In most cases, you can expect to make around 12% on your investment each year. Don’t forget, you’ll have maintenance and operating expenses and potentially regular mortgage payments as well, which we’ll discuss in a moment.
That’s a pretty good chunk of change. And remember, investing in real estate isn’t just about getting rich quick — it’s about investing for the future.
If you plan on holding on to these properties indefinitely, then single-family homes are a great choice because they tend to appreciate quickly over time.
For instance, if you buy a property today for $100,000 and sell it 20 years from now for $200,000 then that’s an average of 12% appreciation per year.
If you held on to your investment property indefinitely, the value would continue to increase at this rate while other investment options (like stocks) might plateau.
Easier to Get Started
Another pro of investing in single-family homes is that it is a very easy way to get started. Unlike multi-family homes that may require hundreds of thousands of dollars to buy, single family homes are less expensive and therefore easier to acquire.
You don’t need a lot of money to start building your real estate portfolio and you can begin to see returns pretty quickly.
But perhaps you don’t have enough for the mortgage down payment. If that’s the case, then you could consider the opportunity to invest in a fractional share of a property. At BuyProperly, they help investors like you get started in real estate investing for as little as $2,500. Learn more here.
Stable and Secure
The market for single-family homes is always growing. Even if the economy takes a turn for the worse, you can still expect to make money off of your investment. Unlike investing in stocks or other forms of investments, real estate is something that normally retains its value no matter what the market is doing.
Maintenance and Repair Costs
A big benefit of single-family investing is that repair and maintenance costs are often lower than what you would pay with larger buildings.
Instead of having multiple units to look after, investing in single-family homes means you only have one unit to worry about. Plus, you can often do the repairs yourself to save even more money.
More Control
Investing in single-family homes gives you more control over your investments.
For example, if you buy a single-family home and then decide that investing isn’t right for you anymore, you can sell it at any time. You have more control over the investment and how long to continue investing. Plus, since they appreciate quickly over time with little upkeep required from an investor point of view, this means less stress when investing.
Less Risk
Single-family homes are a great way to get started in real estate investing without taking on too much risk.
The market for single-family homes is always growing, so if your investment doesn’t go as planned, you can still sell it down the road and make most of your money back.
Easier to Manage
Another pro of investing in a single-family home is that it is much easier to manage than a larger property. It’s often easier to find a property management company and the fees are substantially less than you would pay with a larger building. You also don’t have to worry about hiring and managing staff, which can be a big hassle.
Less turnover
Single-family rentals tend to have long-term tenants with less turnover than lower-priced units in a multi-family building. Long-term tenants are more stable and will pay their rent on time, which means less stress for you.
Multiple vacancies can become an issue with larger properties and can really eat into your profits.
Diversification
Because single-family homes are less expensive than large buildings, it’s easier to continue to invest and add more homes to your real estate portfolio. That means you can diversify and reduce the risk of sudden vacancies and non-paying tenants.
As you can see, there are several pros to investing in single-family real estate. But, like any investment, it doesn’t come without some risk.
Cons of Investing in Single-Family Homes
Now that you have a good idea of the many benefits of investing in single-family homes, let’s take a look at some of the cons of this type of real estate investment.
Sourcing Deals
The main con of investing in single-family homes is that it can be difficult to find good deals. Because this is such a popular choice, the competition is fierce. So you need to be prepared to do some digging and put in some work if you want to make a profit.
Takes time to generate a return
With single family homes, it can take a while to see a return on your investment. It’s not uncommon for it to take at least five years before you start seeing any real profits.
Remember that although you’re always able to collect rental income on your investment, much of the benefit in single-family home investing comes through the capital appreciation over time.
Flip & Sell Risks
“Flipping” houses (buying and selling them quickly for a profit) can be risky. If you’re not careful, you could end up losing money on a flip.
Another con to flipping is that it’s often difficult to find good deals – the same issue we mentioned before. Plus, if the market takes a downturn, you could end up losing money on the sale.
Vacancy rates
Unlike multi-family home investing with several units to generate income, single-family home investing means you’re buying only one unit to rent. If a tenant doesn’t pay the rent or leaves the property, you could suddenly find yourself with a 100% vacancy rate, which can significantly eat into your return on investment.
Management
Another downside is that it can take a lot of time and effort to manage all of the different aspects of owning and managing multiple single-family homes. Two or three properties can be extremely easy, whereas 10, 15, or even 20 single-family homes can mean a lot of traveling for your management company!
If you are planning on managing the property yourself, you’ll also need to be within a reasonable commuting time to this property to deal with any issues.
Less Leverage
Lastly, investing in a single-family home usually doesn’t provide as much leverage as investing in a larger property.
In the real estate investing world, leverage means using other people’s money to fund your investment.
For example, with single-family investing, you may only be able to get a loan for 50% or 60% of the purchase price. Whereas with investing in a larger property, you may be able to get a loan for up to 80% or even 90%.
This is because investing in larger buildings means investing more money, and investing more money means investing more risk.
The bank doesn’t want to be stuck with all the risk if something goes wrong. So they’re more likely to loan you money when you’re investing in a larger property.
This means you can’t make as much money on your investment if it goes up in value.
Are single-family homes the right investment for you?
It all depends on your goals and what you’re looking for in an investment. If you’re prepared to do some work sourcing good deals, investing in a single-family home can be a great way to get started in real estate investing. They are stable and secure, have lower maintenance costs, and are easier to manage than larger properties.
However, keep in mind that it can take a while to see a return on your investment. So if you’re looking for something that will generate income quickly, single-family homes may not be the best option for you.
Conclusion
Overall, investing in single-family homes is a great way to secure your financial future. It is a stable investment that has the potential to make you a lot of money over time. However, it is important to remember that there are some risks involved, and it does take some effort to manage everything.
If you are willing to take on these challenges, then investing in single-family homes is definitely something you should consider.
Looking for your first (or next) real estate investment? At BuyProperly, they use advanced AI technology to help match investors with lucrative investment opportunities. They use a fractional ownership model so you can get started for as little as $2,500 (and see projected annual returns of 10-40%). With this approach, BuyProperly makes it easy to invest in multiple properties and locations to diversify your investment portfolio and build your wealth! Want to learn more? Visit BuyProperly.
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:
the Cost Method
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:
home equity
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.
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.
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.
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 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.
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