At any point in the last few years, it’s likely the real estate market near you was described as “red-hot.” A confluence of events has led to markets all across Canada, in big cities like Toronto and Vancouver and smaller burbs like Thunder Bay and Nanaimo, to rise significantly and keep out younger generations and first-time homeowners.
That means the traditional paths to property ownership are hard to navigate. High demand, limited supply, increasing interest rates and sizable down payments make seeking out property both difficult and exhausting. addy seeks to break down and bust through these barriers with crowdfunded real estate.
What is real estate crowdfunding?
Crowdfunding uses our connected digital world to engage those who are interested in a particular goal. When a lofty amount of money needs to be collected for a specific cause, instead of one or two people trying to amass the large sum on their own, the burden is spread across many people. Crowdfunding is used for entertainment purposes, including raising money to bring back a TV show or producing a board game, as well as important causes like supporting medical treatment or educational needs.
Crowdfunding is used in real estate as well. In lieu of an individual or couple trying to buy property, a group of people can invest together in order to achieve the dream of ownership together.
addy believes in real estate for everyone, and crowdfunding is the mechanism by which this can be achieved. Before investing with online real estate by crowdfunding, it’s important to consider the benefits and drawbacks.
Real estate crowdfunding pros
- Small investment. addy enables members to invest as little as $1 into an available property. This extremely low threshold eliminates many of the barriers that prevent most people from owning property, including lofty down payments and high mortgage rates.
- Accessible. Crowdfunding, at its most basic, doesn’t require participants to have a wealth of knowledge about investment – or a wealth of money for that matter. addy welcomes all those to the crowdfunding cause, regardless of their identity, education or financial history.
- Simple. Real estate crowdfunding can eliminate many of the complicated and tedious parts of property ownership. addy’s team of experienced professionals do all the heavy lifting and make every investment transparent and easy to follow for its members.
Real estate crowdfunding cons
- Risk. There is no such thing as a sure-thing investment. addy differentiates their investments into four risk categories, and the only liability the members take on is their own investment. Still, there is no guarantee that that investment will yield a return.
- Illiquidity. Real estate crowdfunded investments are not liquid, which means they cannot be bought and sold as desired. Instead, the investment is held for a certain period of time until a potential target date is met.
- Lack of control. Once money is invested, there is little you can do to influence the outcome. You have to trust the plan that has been put in place and those that are in charge of executing the plan.
Is addy right for you?
For those seeking the pride and potential financial return that comes with property ownership, real estate crowdfunding may be the right path. It’s worth noting that not all online real estate investment companies are created equally.
addy allows for a low investment, includes no fees and makes the entire process, from signup to wallet funding to investing, simple and transparent.