It’s no secret that every day Canadians are told how out of reach the real estate market is. With little hope of improvement on the horizon, the enthusiasm around investing in or purchasing real estate is increasingly turning to apathy, with many already throwing in the towel.
Born out of CEO and Co-Founder, Logan Yergens’ own frustrations at being a priced-out millennial, the fix became obvious. If you can’t buy an entire property, what about a fraction of it? Or multiple pieces of several properties?
Like Logan, I also saw a distinct lack of real estate investment opportunities for ordinary Canadians. Backed by my experience at WealthBar and CI Direct Investing, I came on board with Willow in September 2021, and am providing investing insight to help Willow with its mission to make property investment affordable and accessible for all.
What is Willow?
Fully approved by the Ontario Securities Commission (OSC) to operate as an exempt market dealer, Willow handpicks stable, rent-generating properties across the country (commercial, industrial, and purpose-built multiplexes) and splits each one into 100,000 units. These units are then made available for purchase on our online trading platform, just like you would stocks and shares.
There is one key difference, though – the assets are completely tangible. You own part of a physical building. Unlike a stock or bond – which represents ownership in or a loan to a corporation – this type of investment in property and real estate is something concrete.
Willow currently has two properties available. Our Toronto property is a multi-use complex, housing a Falljraven store in the downtown and bustling Queen Street West neighbourhood. The second property is a retail space occupied by a Scotiabank branch in Ottawa. The values of these properties are determined by location, building condition, and income generated.
Willow’s PropSharing is a form of fractional ownership that removes the red tape and complexities of real estate investment. In short, fractional ownership is a percentage ownership in an asset such as a piece of art, cryptocurrency, or even a luxury car. Individual shareholders purchase pieces (or fractions) of the asset at a reduced rate. Those shareholders then split the benefits of the asset proportionally by how much they actually own of it.
While the average investor might find it hard to do proper due diligence on their own, they don’t have to when using the Willow platform. Willow does the due diligence, manages all the administrative details, and adds liquidity to the real estate, so all investors need to do is select the properties they want in their portfolio.
The value of real estate investing
In the last 10 years, real estate has outperformed the stock market with a fifth of the volatility.12
It is true that the higher the volatility, the riskier the investment tends to be. In other words, volatility equals risk. Adding real estate to an investment portfolio typically enhances stability in addition to increasing returns. Real estate also has a low correlation with stocks and bonds. Changing market conditions such as interest rates or unexpected inflation affect real estate differently than the market. This is a crucial component to having a diversified portfolio of investments, as it allows your portfolio to maintain resilience through different market cycles.
The bottom line
Real estate in most of Canada’s urban centres, particularly the Greater Toronto Area (GTA), has reached unbelievable levels of unaffordability, especially for those on an average or even above-average salary. Buying a slice of a property for as low as just $16.00 (per unit) presents a new and exciting opportunity for investors to get into the real estate market and take advantage of the financial rewards it can provide.
Explore more about the potential of real estate investing and learn more about the current roster of investment properties available at www.willow.ca.
Neville Joanes is the Chief Investment Officer of Willow.
1. 2011-Jun 30 2021 – Real Estate is represented by Teranet National Bank House Price Index 14.3% with volatility of 2.5%
1. 2011-Jun 30 2021 – Real Estate is represented by Stock Market is represented by S&P/TSX Composite Total Return Index 7.4% with volatility of 11.8%
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