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How to get in on the real estate boom without actually buying a house – CNN

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For many people, buying a home just wasn’t in the cards this year. There were too few homes for sale that were too expensive to buy.

Indeed, home prices have been on a tear, with third quarter home prices up more than 18% from a year earlier, according to the Federal Housing Financing Agency. And some analysts expect they will continue to rise significantly through 2022.
But those who got shut out of buying a home don’t have to miss out on rapidly appreciating real estate values.
Investing in real estate has long been the realm of “accredited investors,” a category of typically high-net worth investors with access to high-risk (and potentially high-reward) investments like private equity real estate funds, hard money loans or real estate syndication in which a group of select investors pool their money to buy properties. But through investment products like mutual funds and ETFs tied to real estate and online crowdfunding platforms, more people are able to access real estate investments.
“There are a lot of people who are feeling excluded from the home market right now,” said Ben Miller, co-founder and CEO of Fundrise, an online real estate investment platform. “Investing in real estate is a way for them to start to understand real estate.”
While other alternative investments like cryptocurrency can fluctuate wildly from day-to-day, real estate can be a reliable long-term growth investment and income generator, he added.
Here are some of the ways you can invest in real estate without buying a home or becoming a landlord.

Investing in REITs

Real estate investment trusts own and invest in properties. By putting money into a REIT, investors are given the opportunity to buy shares in commercial real estate portfolios and earn money from income-producing properties without actually buying or managing the property.
Pulblicly traded REITs are available to investors directly or through mutual funds and ETFs. Some popular ones are Vanguard Real Estate ETF (VNQ (VNQ)) or iShares U.S. Real Estate ETF (IYR (IYR)).
Given the massive increase in home prices, REITs had a banner year in 2021, with investor earnings hitting a record high. The cash flow from the investments for equity REITs were up 40% in the third quarter from a year ago to a record high $17.4 billion, according to an index from Nareit, a REIT industry group.
And there’s still room to run in the real estate market, said Jim Sullivan, BTIG’s REIT analyst.
“We continue to see positive signs for the economic recovery headed into 2022,” he said.

Crowdfunding

It used to be that investors needed tens of thousands of dollars to invest in real estate, but minimums have decreased dramatically. Crowdfunding companies, which pool smaller amounts of money from a large group of investors to put toward properties, have been able to get initial investment minimums down to hundreds of dollars. There are even options to invest with just tens of dollars.
Fundrise, for example, offers an option that requires a minimum investment of $10. At that level, the investment is entirely in a Flagship Fund, which contains real estate properties around the country ranging from single family rentals to logistics centers. The company charges an annual advisory fee of 0.15%, with its funds charging an additional annual asset management fee of 0.85%.
“Once you invest you can see that you invested in a real asset,” said Miller. “There is a real value, not just market value or cryptocurrency speculation. A lot of people never thought they could own real estate.”
Another way to invest through crowdfunding is in real estate debt.
For a minimum investment of $5,000, RealtyMogul offers funds focused on growth or on generating income from commercial real estate debt, as well as equity in apartment rentals and other residential properties. Fees include an annualized service fee of .5% and an annualized asset management fee of 1% based on the REIT’s total equity value.
Another company, Yieldstreet, offers an alternative investment fund, the Prism Fund, with access to investments previously only available to institutional investors. The fund is comprised of real estate debt and equity, as well as debt from the art, maritime and legal industries, among others. The goal is to generate returns that can be paid out quarterly as cash or reinvested. The minimum investment is $500 and the fund charges an annual fee of 0.5% and a management fee of 1%.
Crowdfunding sites offer up a way to get decent returns from the real estate market, though probably not as much as buying property directly, said Blaine Thiederman, certified financial planner and founder of Progress Wealth Management.
“Is it going to provide you the same returns that you might be able to receive if you were to go out and invest in your own real estate? Unlikely, ” said Thiederman. “However, I’ve seen stock-market-like returns through each of these platforms and occasionally better returns.”
While their simplicity and favorable income streams from crowdfunding sites are attractive, he said, investors need to be aware of fees and the period of time you have to wait to get your initial investment back.

Should you invest?

Since real estate tends to both increase in value and generate income, it’s a good way to diversify your portfolio, said Marcus Blanchard, a certified financial planner and founder of Focal Point Financial Planning.
“Stocks typically have most of their return from the price appreciation and bonds typically provide most of their return through the interest payments investors receive,” he said. “But real estate is right in the middle, where returns come more evenly between price appreciation and steady income.”
But there are some risks, including the volatility of the real estate market and the quality of the property, said Blanchard. The larger REITs typically have access to higher quality investments because of their scale. Meanwhile, smaller crowdfunding firms do their due diligence but still might be investing in lower quality properties, he said.
Most advisers recommend putting only a small portion of your overall investments in real estate.
“I typically don’t recommend anyone invest more than 10% of their portfolio in real estate whether it be through a REIT, an investment through an online platform like Fundrise, or in rental properties because there’s just so much risk,” said Thiederman. “Investment strategies need to be profitable, because who knows what will happen throughout the rest of our lives, but that doesn’t mean we should be investing in speculative apartment complex developments with 50% of our retirement accounts.”

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B.C. realtor who forged signature of mom's dead boyfriend suspended 3 months – CTV News Vancouver

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A B.C. real estate agent who forged the signature of her mother’s deceased boyfriend as part of a 2016 condo deal has been handed a three-month licence suspension.

Renee Genieve Doe Wei Lam, who goes by Genie Lam, must also pay a $7,500 disciplinary penalty and $1,500 in enforcement expenses to the B.C. Financial Services Authority.

Details of the Richmond realtor’s misconduct were made public last week in a consent order published on the BCFSA website, which identifies Lam’s mother as C.L. and her mom’s partner as H.L.

Lam told the regulator that prior to H.L.’s death in August 2016, he had signed an agreement transferring the assignment for a $388,000 condo to her mother. Lee claimed to have lost that agreement, possibly while moving homes the same year.

H.L. had already paid $95,590 towards the home, and gifted Lam’s mother a cheque for $320,000 to cover the rest on Aug. 24, two days before his death.

According to the consent order, H.L. had been feeling unwell, but “refused to go to the hospital because he worried his family would discover the relationship with C.L.”

Instead, he “laid down for a nap and did not wake up,” the document reads.

Lam told the regulator that when she decided to falsify H.L’s signature on a new assignment agreement, she was distraught over the death of a man she had come to affectionately call “uncle” – and was also concerned about keeping their relationship a secret, as per their wishes.

The consent order does not explain why the couple wanted secrecy.

While trying to complete the agreement, Lam also gave the impression H.L. was “out of town” – implying that he wasn’t dead – and falsely claimed to be representing both him and as her mother as a dual agent, according to the BCFSA.

“Ms. Lam knew or ought to have known that she was no longer the agent for H.L. because of his death,” the consent order reads.

The property was successfully transferred to Lam’s mother in October 2016, and remains in her name.

H.L.’s estate later filed a civil suit against Lam and her mother, but it was dismissed in 2019 after the parties agreed to a confidential settlement.

The dead man’s son also filed a complaint against Lam in 2018, which resulted in the BCFSA’s investigation. The regulator noted that Lam co-operated with investigators, expressed remorse about her misconduct, made no commission on the 2016 sale, and had no history of formal disciplinary proceedings.

Her three-month suspension began on Jan. 1, and she is barred from acting as an unlicensed assistant until the suspension period is over.

The consent order notes that while the Real Estate Services Act was amended in September 2016 to “substantially increase the available penalty ranges,” Lam’s conduct preceded the change in legislation, meaning she could only be punished using the previously available penalties.

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New Immigrants Struggle Amid Overpriced Canadian Real Estate – RE/MAX News

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Immigrants are drawn here in hopes of achieving the Canadian dream, whether it is a higher income or home ownership. This allows them to plant new roots in a nation consistently ranked as one of the top countries in the word, and pass on this wealth to future generations.  Evidently, many families that are arriving here may find themselves challenged by the current state of the inched up 0.2 per cent month-over-month in December, while the MLS® Home Price Index (MLS® HPI) rose 2.5 per cent month-over-month and rose a record 26.6 per cent year-over-year. The actual national average home price in December 2021 reached $713,500, up 17.7 per cent per cent from the same month last year, says CREA. What will it take to ease the Canadian real estate market? Might record-low supply levels be positively impacted by rising interest rates this year?

With that being said, it appears that a considerable portion of immigrants have maintained a bearish view of the Canadian real estate market dating back to 2018, when prices were approximately a third less than they are today. Will this attitude change in the coming years, with more than one million immigrants projected to enter the country?

New Immigrants Struggle Amid Overpriced Canadian Real Estate Market

According to Statistics Canada’s Housing Experiences survey, two out of five recent immigrants were dissatisfied with the state of the Canadian housing market in 2018. The study found that 63 per cent of recent immigrants were satisfied with their housing situation, below the national average of 82 per cent.

The survey also reveals that Canada’s visible minorities were less satisfied with their housing market compared to the national average. The statistics agency reported that 75 per cent of South Asian households, 74 per cent of Chinese households, and 69 per cent of black households were satisfied.

This comes after Statistics Canada data from 2019 revealed that immigrant incomes were much lower in major urban centres, such as Toronto and Vancouver. The study revealed that Toronto is the worst place to earn a living for immigrants, with median incomes hovering at a mere $29,600 before the coronavirus pandemic. Meanwhile, Vancouver saw immigrants earning a median income of $31,000. Montreal didn’t fare much better, sitting somewhere in the middle of the list of challenging cities for newcomers.

Overall, after a decade, it is estimated that immigrants coming to Canada will earn a little more than 13 per cent compared to the median for all Canadians nationwide.

National Bank of Canada (NBC) calculations found that prospective homeowners require an annual income of close to $200,000 to afford a house in Toronto, or annual earnings of about $215,000 in Vancouver. In total, the financial institution’s qualifying annual income for its urban composite is $144,356, although the median annual income in the index is $77,000.

In the end, the data suggest that the housing affordability crisis is hitting Canadians and immigrants alike. But will these conditions become more pronounced in the next few years?

More Immigrants Will Boost Housing Competition

In 2020 the the federal government announced plans to bring in approximately 1.2 million newcomers before the end of 2023, as part of efforts to boost the economy, be it through job creation or supporting the post-pandemic economic recovery. Reports indicate that Ottawa is considering increasing its target for new permanent residents this year.

Permanent resident arrival admissions skyrocketed in September, marking the biggest monthly gain in a century. The country witnessed the arrival of a little more than 45,000 permanent residents.

But while many immigrants are choosing Ontario and British Columbia as the top landing spots, an increasing number of newcomers are looking to Manitoba and Quebec.

Financial experts are split on this public policy pursuit. “It is a conundrum,” said Stephen Brown, senior Canada economist at Capital Economics. On the one hand, Canada’s struggling labour market and a falling fertility rate justify the need for immigration. On the other hand, an influx of prospective homebuyers could further crowd an environment where housing supply is already hovering at record lows. The solution, asserted by many industry observers, is a greater push to increase housing supply from coast to coast.

An Expensive Canadian Housing Market in 2022?

Whether you’re a recent immigrant or a Canadian citizen, rising real estate prices are a likely reality in 2022.

RE/MAX anticipates that Canadian real estate prices could rise a whopping 9.2 per cent this year, according to the 2022 Canadian Housing Market Outlook Report, with 97 per cent of regions analyzed projected to remain seller’s markets.

“Based on feedback from our brokers and agents, the inter-provincial relocation trend that we began to see in the summer of 2020 still remains very strong and is expected to continue into 2022,” said Christopher Alexander, President of RE/MAX Canada, in the report. “Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”

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Toronto real estate investor to pump $85M into London industrial space – London Free Press (Blogs)

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A Toronto real estate investor is spending big bucks in London.

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A Toronto real estate investor is spending big bucks in London.

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Nexus Real Estate Investment Trust will invest more than $85 million in the city this year and next, buying industrial space after investing more than $56 million in 2021, as London has become a hot commercial real estate market, observers said.

“London is a fantastic market. There has been a migration from Toronto to secondary markets due to rents and that, combined with low vacancies, bodes well for the future,” said Kelly Hanczyk, chief executive of Nexus REIT.

“There is a significant demand for industrial space across Canada. Toronto is very pricey and secondary markets such as Cambridge, London and St. Thomas and Sarnia are all seeing industrial spaces snapped up rapidly. I don’t see that changing anytime soon.”

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Nexus plans to spend:

  • $35.7 million for three properties in London this year, totaling 340,000 sq. ft.
  • $50.6 million in London in 2023 for a 325,000 sq. ft. industrial property with a 175,000 sq. ft. addition, now being built.

Hanczyk wouldn’t say where the buildings are because the purchase isn’t finalized.

In 2021, Nexus spent:

  • $44.1 million for a 391,000 sq. ft. building at Wilton Grove and Pond Mills roads.
  • $12.5 million for a 100,000 sq. ft. building at 1950 Oxford St. E.

“There is a lot going on and London and area has changed the strategy for these industrial guys,” said Brent Rudell, broker and vice-president with Cushman Wakefield, the London realty firm.

He agrees the Toronto area market is “out of control,” pushing investors to smaller, but stable, markets with lower costs and rents.

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“In our market now, there is more traffic, more businesses and growth in the industrial and commercial market is really robust,” Rudell said.

The London market has some of Canada’s lowest industrial vacancy rates.

“There is no availability,” Rudell said. “It shows the London market is vibrant, it is a place for any business.”

REITs, or real estate investment trusts, typically amass a portfolio of a particular real estate sector, such as office, apartment, or commercial and industrial. Investors who buy shares in the REIT receive a monthly dividend. Nexus focuses on industrial portfolios.

REITs offer investors a chance to buy a portion of large holdings, such as a factory or a mall, Hanczyk said. “It is better to invest in a REIT versus going out and buying a building.”

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In one sign of how hot London’s industrial sector is, a report this month from commercial realty firm CBRE pegged the vacancy rate at just 0.8 per cent, with only 328,000 sq. ft. of small- to mid-sized space available.

While there is nearly 900,000 square feet under construction, more than two-thirds of that is for one project: the 640,000 sq. ft. Maple Leaf Foods chicken processing plant.

To get more industrial land on the market, the city must revisit the development fees it charges builders for construction and speed development approvals, for zoning and site plans, for example, Rudell said.

“London needs more industrial space, there is no end in sight,” to the demand, he added.

“Put an empty industrial space on the market now and you’ll have 50 showings and 20 offers. It’s great for sellers, but a lot of people are not getting the space they want.”

London is not alone. Nationally, the industrial vacancy rate dropped below two per cent to 1.8 per cent and rents rose sharply in 2021, up nearly 11 per cent from 2020, the report said.

ndebono@postmedia.com

Twitter.com/NormatLFPress

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