How to Invest in Real Estate IF You are broke
The 2021 Real estate market is crazy and the unfortunate reality is that young generations will have harder times to afford any kind of properties. Don’t you hate it when some people just tell you to “Just invest in real estate” because it seems like an obvious advice but the roadblock is often saving for a down-payment that costs a leg or an arm, plus the strenuous process of mortgage approvals. Salary increases are nowhere on par as real estate growth and the dream to own a home seems more and more bleak.
The issue of whether real estate should be this expensive is saved for another in-depth discussion, but I want to focus mainly on the topic of how to profit from real estate growth even if you don’t have the down payment or perhaps a substantial monthly income. Believe it or not, you can achieve the same type of growth with only 20 dollars in your pocket, and that something is called the Real Estate Investment Trusts (REITs). When you invest in REITs, you’re investing in a company or companies that owns income-producing real estate (could be residential, commercial, industrial, etc). These types of investments are largely stable and rarely volatile. They’re known to be one of the most stable form of investments behind government bonds. Due to the nature of their stable growth, chances are you will not expect ludicrous growth that you can expect from Stocks, but at the same time, they are also low risk so you can usually feel much more at peace.
But what about a house-market crash? This is the advantages of REITs as rentals usually profit more during housing market crash since more people will rent than buy homes. During times of high real estate growth, REITs also profit due to the capital growth surrounding the property. This is why REITs are so stable in nature and even in the 2008 housing market crash, most REITs only experienced a smaller dip where homes experienced much larger decreases. I personally have reaped some steady profits over the years by investing in different REITs and have been averaging 8% on average yearly returns.
The best thing is you can invest in REITs with only 20 dollars or even less! So you get to ride along Real estate growth without actually needing to purchase a home.
There are dozens of different Canadian REITs listed here and some start as low as 4 dollars per share. https://reitreport.ca/canadian-reits/
If you’re curious where to buy these REITs, I will have an upcoming article detailing the steps in investing. But in summary, there’s a couple platforms you can sign up totally for free and simply search up the REITs you would like to buy and purchase as many shares you’d like. Platforms like InteractiveBroker and Wealthsimple can help achieve the same results!
