With multiple avenues for people to invest in real estate online, it can be hard to figure out which path makes the most sense. Hidden fees, high investment minimums and complex jargon make what could be a simple process into something far more complicated and less lucrative.
addy believes in real estate for everyone, aiming to make online real estate investments as transparent, simple and accessible as possible. BuyProperly.ca is also in the arena of online real estate investments, but there are key differences with addy. Here’s how the two companies square off.
Crowdfunding real estate
Crowdfunding allows individuals to pool their money in order to gain access to something they otherwise would not be able to gain on their own. Spreading the cost, and as a result, the risk of investing in real estate across many parties unlocks new opportunities for real estate investment.
Crowdfunding allows for fractional ownership, where multiple people own a part of the property. In Canada, a hot real estate market with rising costs and fierce bidding wars is dampening the dream of property ownership, especially among younger generations.
addy deals in institutional grade commercial real estate. These are generally properties that range between $3,000,000 and $75,000,000, and that are often overlooked by or unavailable to the average investor. Such properties include apartment complexes, industrial parks and mixed-use buildings; addy does not invest in single-family homes or single condos, which means the average Canadian isn’t competing with addy to find their home.
BuyProperly.ca, however, does include single-family homes. This includes both detached and semi-detached houses as well as single condo units, putting them right up against Millennials and Gen Zers trying to break into the market and own their first home. BuyProperly also seeks out commercial, warehouse and hospitality assets in addition to residential properties.
Both addy and BuyProperly are based in Canada, operating out of Vancouver and Toronto, respectively. However, while addy only currently invests in properties in Canada – with aims to expand to the United States in the future – BuyProperly boasts properties on both sides of the border.
addy currently offers investments in British Columbia, Alberta and Ontario with a recent expansion into Quebec.
How to invest
Becoming a member
addy offers three types of membership. You can become a Charter Member for $25 for one year or Believer for $500 for five years, with both options offering different perks and benefits. addy also offers membership for accredited investors as well. addy does not require users to earn a certain amount of money and have specific experience in real estate to become a member; addy welcomes all of age to the crowdfunding cause.
BuyProperly, meanwhile, requires a validation process prior to approval. Interested individuals can submit their information to BuyProperly and await a decision.
The minimum investment BuyProperly allows is $2,500, a fairly steep number for casual and first time investors looking to earn passive income, especially younger generations.
Conversely, addy seeks to break down the barriers to real estate investment by offering a minimum investment of just $1. What’s more, the maximum investment a member can make is $1,500, a threshold that prevents specific properties being snagged up by a few people and limiting the number of people that can take part in the process.
BuyProperly charges a management fee of 2.5% + GST/HST on the asset under management. What’s more, there are one-time costs associated with various duties, fees and services including surveys and inspections, as well as recurring costs associated with management and marketing.
Investing with addy does not include any fees. Every dollar of your investment goes into the property.
Earn with addy
With addy, a plan is put in place by the General Partner and timetable for a potential return is established. Members have access to an Offering Memorandum and can have the choice as to what amount, if any, they want to invest in a single property. Once they invest, there is no more work that needs to be done. Depending on the plan and subsequent execution, a property may start to make money within a year while other more opportunistic endeavors could turn a profit in three to five years.