This is a question we get asked all the time, and the short answer is:
“No IMBY is not a REIT.”
IMBY, unlike a REIT is focused on creating investment opportunities in hyper-local, residential real estate.
There are a number of other differences between IMBY and REITs. A few are discussed at the end of the article, but we believe hyper-local, residential real estate is the most important distinction.
Why is residential real estate important?
Housing costs are a key component of our living expenses. As such, we want a portion of our investment properties to track the cost of housing — residential real estate. Residential properties represent 75% of global real estate, and residential real estate prices and growth rates do not track lock-step with commercial real estate.
That’s why a suitable portion of your real estate investment should be in residential properties, and this is a gap in most REIT’s. We believe the people who live in a community should benefit as the value of the homes they live in increases, regardless of whether or not they are traditional home owners. IMBY ownership makes that possible.
Why is hyper-local real estate important?
British Columbia real estate prices and growth rates are clearly different than that of, for example, Manitoba. However, residential real estate prices and growth rates in Burnaby are also different than that of West Vancouver. So, people wanting to maintain their purchasing power in West Vancouver should invest a portion of their portfolio in residential properties in West Vancouver.
The highly respected investor, Peter Lynch, was a strong advocate of “Invest in what you know”. People know their communities better than anyone. People know which neighbourhood is going to grow and why, because they actually live there. Unfortunately, a typical REIT does not provide the option to invest in these types of opportunities. At IMBY we want to change that. We want people to be able to invest in the communities they know and love.
What is a REIT?
A real estate investment trust (REIT) is a closed-end investment company that owns assets related to real estate, such as buildings, land and real estate securities.
REIT’s are regulated trusts that are legally required to distribute at least 90% of their taxable income to investors. That income must come from the rent, managing fees and leasing of the properties. There are also ownership restrictions, as well. For example a REIT cannot have less than 5 people own more than 50% of the shares.
What is IMBYx.com?
IMBY is a platform for restructuring real estate investment, so that ownership of a property can efficiently and cost effectively be made accessible to a broad market for prices as low as $1 per share.
Some of those investment opportunities on IMBYX.com may be structured like a REIT. However, there is no requirement for that to be the case. For example, we envision that many of the properties offered on IMBYx.com will have more than 50% of the shares owned by less than 5 individuals. Other projects may be purely capital appreciation projects, like a redevelopment.
With a REIT, you are investing in a portfolio of commercial properties. We are focused on residential properties. One of the reasons we founded IMBY was to provide regular people with the opportunity to invest in real estate in their own backyard (their communities), hence our name. As such, each investment on IMBYx.com will typically have only a single real estate property attached to it, and will be hyper-local. A property you can drive to, see, and get to know.
You can learn more about IMBY here.