Crosstown condos and townhomes . Young Canadians began to buy houses in joint ventures. You can be an owner for one yuan. Especially in big cities such as Vancouver and Toronto, it is becoming more and more difficult for young people to buy a home.
In view of this, businessmen from the two places have created a “joint-stock” home ownership scheme, so that investors with limited funds can also buy their own homes. Even if they cannot “get on the bus” and buy their own homes, they will finally be able to “buy a car” and have a taste of being an owner.
Addy in Vancouver and BuyProperly in Toronto are both part of this burgeoning industry, launching investment schemes called “fractional ownership” (fractional ownership), which allow individual investors to join the ranks of homeowners by buying “shares” in projects such as detached houses, Pavin homes or industrial parks.
The attraction of the scheme is that buyers do not have to worry about the first phase and want to invest in larger projects such as the whole shopping mall, and they do not have to worry about the lack of funds. as long as they click on the Internet and transfer the investment money by electronic payment, they will immediately become one of the owners of the property concerned, in the form of online “crowdfunding”. Buying a house is just a matter of fingers.
However, this form is obviously different from the traditional shared residential or real estate trust fund (REIT), that is, the owners are unable to own or enjoy the property, and the split shares are more fragmented. Different from REIT’s investment in real estate enterprises, the investment object of fractional property right is a single property.
According to a report by the Canadian Broadcasting Corporation (CBC), these companies have different rules of the game. Take Addy as an example, the main investment projects are Pak Man Mansion, which ranges from 5 million to 50 million yuan. As a member, you have to pay an annual fee of 25 yuan. You can buy shares in a property as low as one yuan, and each person’s investment in each property shall not exceed 1500 yuan. On the contrary, BuyProperly, which mainly invests in leased units, sets a minimum investment of 2500 yuan, with an upper limit of 50% of the shares in the property and no membership system. Investors share one-off expenses, such as building inspection fees and legal fees, and then pay maintenance and management fees on a regular basis. Investment companies charge 2.5% of the investment as a service charge, plus tax.
There are two main ways to get income. First, investors can regularly share the rental income from property rental according to the proportion of investment. After the property is sold, it can be repaid on a pro rata basis. Investors can also transfer their own shares and leave the market early before the property is sold.
Laleh Samarbakhsh, an assistant professor in the department of finance at Ryerson University University’s School of Management, warns interested parties that while this type of investment seems attractive, especially for young people, the risks cannot be ignored. Property values can rise or fall, as is the case with sole proprietorship. Real estate has never been an easy investment vehicle to cash out. If you are eager to sell, you have to accept a lower price. From a macro point of view, this investment model has attracted more buyers to join the market and will further push up property prices. investors should not make hasty decisions for the sake of following the trend or for fear of “losing”.
