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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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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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