For some, real estate investing may be fairly new, while others have long embraced this most enduring asset class.
Wherever you are on your investment journey, it’s good to take a moment to reflect on some key concepts, principles and prevailing ideas when it comes to investing in real estate. Here’s to passive income!
Pros and cons of commercial real estate investing
addy offers investment opportunities in institutional grade commercial real estate. We’ve gone in depth with the benefits and drawbacks previously, but it’s worth recapping quickly here.
In general, investing in real estate provides diversification and potential regular income flow to a portfolio, especially one focused heavily or exclusively in stocks and cryptocurrency. Typically, there is less volatility with real estate investing relative to stocks.
However, investing in real estate can take time, energy and a lot of money up front. Unless of course you invest with addy.
Real estate investing golden rules
While this rule applies to investing of any sort, it’s especially important in real estate to accurately assess your goals. Goal-setting involves determining how much money you want to invest and when, as well as what you hope to earn at the end of the journey.
It also means accurately determining your risk appetite. Investing in real estate is relatively illiquid, which means, unlike stocks, you can’t easily buy and sell real estate as easily or take out money as needed. As such, you’ll want to be more careful when you invest because that money could be tied up for years potentially.
With addy, every dollar a member invests goes directly to that property: there are no hidden fees and no risk a property might be fully funded. A projected timetable is also offered with forecasted ROI and IRR. and we’ll also let you know the opportunity type and risk profile.
Conduct due diligence
We mentioned a lot of work goes into real estate investing. Most of that work can be summed up as due diligence, which comprises a wide swatch of research, surveys, inspections and assessments.
We’ve a roundup of real estate due diligence that’s worth considering, but the golden rule here is that you have to be patient and dedicated. Understand that the financial investment extends beyond simply the purchase of a property. It involves fees, permits and associated cost that comes with hiring professionals to move along the sale.
What’s more, it’s not just money that is being invested, but time and energy too.
addy members don’t need to worry themselves with all that work. Our team of experts conducts due diligence on properties and the General Partners that look to put a plan in place. Members are encouraged to read the Offering Memorandum to learn more about each deal on the addy platform and do their own research. The amount of effort required to invest is significantly less than investing the traditional way..
Location is everything!
This one is an oldie but a goodie: it’s always important to keep in mind location when investing in real estate. This may fall under a bit of due diligence, but it’s worth blowing out in a section all its own because location may be the difference between a lucrative investment opportunity and a dud.
Seeking out-and-coming cities, towns, neighborhoods and even lone streets is key to finding the best value. Especially as real estate prices skyrocket across Canada, that value can make a big difference. Consider proximity to important institutions like schools and hospitals, as well as cultural and tourist attractions like retail and restaurants. Consider how easy or hard it is to get there without local highways and nearby public transit. You’ll also want to look at what, if anything, the city is planning in the area for the next five and ten years.
addy offers properties in cities big and small, from developments in Toronto and Montreal to buildings in Vernon and Sooke. There are several properties in Hamilton, including an affordable housing complex, that align with the city’s plan of supporting more purpose-built rentals and revitalizing Hamilton on whole. The city is pumping money into attracting more jobs, events and residents that could potentially raise the property value in the area.
Invest with addy
addy takes a lot of the hard work out of real estate investing, making commercial properties more accessible and affordable to the average Canadian. Members can invest as little as $1 to continue – or even start – their investment journey.