Money.ca explains the benefits of real estate crowdfunding for Canadians looking to invest in high-value properties.
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Looking to invest in the property market but don't have enough money to go it alone? Money.ca explains why real estate crowdfunding may be the answer. With the rising cost of housing in Canada, there's no doubt that property can be a lucrative investment. However, the problem for many Canadians is that, while they have some funds to invest, they simply don't have the large amount required to buy a property on their own.
Crowdfunding essentially democratizes access to real estate by allowing individuals to pool their resources and collectively invest in high-value properties. Whether you're a seasoned investor looking to diversify your portfolio or a newcomer eager to give real estate investment a try, crowdfunding offers a unique opportunity. In this article, Money.ca explores what real estate crowdfunding in Canada is about so you can decide whether it's the right investment for your needs.
Real estate crowdfunding in Canada is when a group of individuals pool their money together to invest in real estate properties that they would otherwise not be able to afford if they had to invest on their own.
This way of investing gives smaller investors the chance to participate in larger real estate deals that would potentially cost millions of dollars. By leveraging the collective funds of multiple investors, online crowdfunding platforms can make it easier for Canadians of more modest means to build wealth by investing in residential, commercial, and industrial properties across the country.
It's important to note that the amount you earn from your investment is entirely contingent on how much you put in—your profits are based on what percentage you invested.
You may be new to real estate crowdfunding in Canada, so it makes sense to wonder whether or not it's even legal. The answer is that crowdfunding real estate in Canada is indeed legal, but there are some strict regulations (which are created and overseen by the Canadian Securities Administrators) to control how crowdfunding works.
The Canadian Securities Administrators oversees crowdfunding in Canada to ensure these platforms comply with securities laws (note that the laws govern crowdfunding in general, not just real estate crowdfunding). These regulations are designed to protect investors and maintain the security and legitimacy of the investment market in Canada.
Here are some examples of the key rules concerning crowdfunding in Canada:
Despite the fact that crowdfunding for real estate is a relatively novel idea in Canada, several real estate crowdfunding platforms have started operations in the country over the last few years, including:
Real estate crowdfunding platforms essentially work as intermediaries between investors and property investment opportunities. They research investment opportunities, select viable properties, recruit investors and manage all the investments.
Real estate crowdfunding is risky and is not easily accessible in Canada yet due to the scarcity of funding platforms. It's really up to the potential investor to decide if they feel comfortable investing in this relatively new and not-yet-popular form of investing. Here's a look at the pros and cons of crowdfunding real estate in Canada.
Pros
Cons
This story was produced by Money.ca and reviewed and distributed by Stacker Media.