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Wingreen Court Apartments is a sprawling complex of residential buildings in North York, complete with 99 units divided into one- and two-bedroom suites. It’s surrounded by reputable schools, popular retail centres and residential developments to accommodate the roughly 330,000 Torontonians living nearby.

The property is a hot commodity in the city’s blistering real estate market — but investors can buy a stake in it for as little as one dollar.

The investment deal is offered through a start-up called Addy Invest, a Vancouver-based real estate company that issues tiny shares in the properties they own to crowdsource investments. The goal, they say, is to let anyone profit from Canada’s housing market.

It’s called fractional real estate investing.

Since 2018, the company has been buying real estate in Canada’s hottest markets and allowing investors to buy shares of the building for as low as $1 or as much as $1,500. They own residential buildings in the GTA, mixed-use buildings in B.C., and even a massive industrial park in Calgary, AB. For a membership fee of $25 per year, investors buy shares in these buildings and collect a profit from the rental income extracted from the tenants who occupy them.

“Real estate is a top asset class, but most people can’t afford to invest in it,” says Michael Stephenson, Addy’s CEO. “This is a way to make housing investments accessible to everyone.”

The concept of fractional ownership is growing in popularity and plays well with younger, do-it-yourself investors seeking to profit off Canada’s real estate market. Addy now faces competition from a growing number of rivals, including Ontario-based BuyProperly, NexusCrowd, RealtyShares and Fundrise. And the companies all offer variations on the same theme: buying ownership in property for a fraction of the cost.

Kalith Nanayakarra, a 21-year-old student at the University of British Columbia, discovered fractional property investing through a virtual chat room he joined on Clubhouse, a buzzy audio app, one evening earlier this year.

The participants were there to talk real estate — Vancouver real estate, specifically. But the conversation quickly veered toward the question of affordability, and how Gen Z could possibly benefit from an increasingly exclusionary housing market.

After the talk, Nanayakarra bought $50 worth of shares from a company offering fractional ownership of a building called The Lex, just a few blocks from where he lived. The mixed-use building in Vancouver hosts 45 residential units along with a Subway sandwich shop and a nail salon.

“I can walk past it easily and see how the building’s doing,” he said. It’s a small sum of money, but the risk is low and the quarterly income he receives from tenancy rent is appreciated.

Simon Mills, 27, recently invested $2,500 in a company that owns a rental home in Hamilton, promising strong returns and a short time-horizon for his investment. “The biggest thing for me was the low barrier to entry,” he said.

“I can’t afford a home, but at least I can get some exposure to the real estate market this way.”

Fractional investing is, in principle, a good way to get exposure to local real estate markets — but there are risks involved, says Jack Favilukis, a professor of finance at UBC’s Sauder School of Business.

“If house prices go up, the value of your share of the building has gone up, and therefore you aren’t falling as far behind if you want to purchase something down the road,” he said.

Owning a single property, however, can expose investors to some idiosyncratic risks. “What if the roof all of a sudden needs a $100,000 repair?” he asks. With companies like BuyProperly, investors would be on the hook for a portion of those costs.

Fractional real estate investing isn’t all that different from typical equity investments, he notes. In the U.S., for example, investors can buy something called the Case-Shiller index, which tracks the value of single-family detached residences in certain areas of the country. Owning shares in the San Diego Case-Shiller index is like owning a piece of the entire San Diego housing market.

Favilukis suggests this is better than buying shares of individual buildings, because it diversifies the risk across an entire region.

“Unfortunately, for reasons that aren’t totally clear, these investments have not caught on,” Favilukis said. “They exist, but have not been as popular with the general public as the creators thought they would be.”