What returns can I expect?
For most real estate investments, returns come from two different sources: dividends and appreciation.
When investing in the DiversyFund Growth REIT, investors receive a dividend every month from the rent we collect. This dividend is automatically reinvested in order to fund the renovation of the properties. Reinvesting part of the fund’s growth strategy as it also allows investors to take advantage of compounding interest.
As we renovate the assets, they appreciate in value. Real estate also naturally appreciates over time. Appreciation represents a far more substantial portion of the investor’s return than dividends from rents. This appreciation is realized upon the sale of the assets when the fund reaches its term. When we sell the assets at the end of the investment term, investors receive any profits from the sale.
DiversyFund Growth REIT Returns and Historical Performance
Under SEC guidelines, we cannot provide investors with a projected return or predict how the investment will perform. This is similar to how a company on the stock market can’t predict its future stock price. We can, however, refer to our historical performance.
As stated on the website, in 2017, investors saw average annualized returns of 18% and in 2018, investors saw average annualized returns of 17.3%. This is our historical performance based on previous investments and products we’ve had in the past. We hope to maintain this average, however, as with any investment, past performance does not guarantee future results.
As for our Growth REIT, this product was launched a year ago and is still in the ramping up phase of acquiring properties. Lower returns are expected during this early period, as identifying properties and executing value-add plans (construction, leasing, etc.) takes time to yield results.
In 2019, REIT investors saw a 5% dividend yield—this is expected to increase as we finalize the renovation process and increase rents. The dividend does not reflect the total return of your investment, only the cash-flow from incoming rents. It does not factor in the appreciation of the asset that happens over an extended period of time. Your returns will come from both dividends and appreciation realized at the time of sale.