How Gen Z is redefining real estate
Ziggy and Kate Linklater are both 27-years-old and they’ve just achieved the impossible dream — owning their own home in one of the world’s most expensive cities. Surveys show that most Canadians under 30 have given up on the dream of home ownership. Host Bianca Rego talks to Ziggy about how he and Kate managed to purchase a 1,000 square foot condo without any financial help from family and friends. Finally, BCIT Alum Steve Jagger from Addy Invest, talks about why he thinks real estate crowdfunding platforms can help Gen Zers buy their own place to live.
Just a note BCIT doesn’t endorse any investments or investment companies – but it sure makes for an interesting conversation.
Bianca Rego 00:00
Ziggy Linklater is the kind of guy who, when he sets a goal, he does everything he can to achieve it.
Ziggy Linklater 00:11
Oh, yeah, that’s just who I am. I think it comes down to personality, you know?
Bianca Rego 00:13
A while back, Ziggy and his wife Kate noticed a trend. The housing market was nuts. So Ziggy and Kate set themselves a goal with a really high bar, figuring out how to buy their own home before they turned 30.
Ziggy Linklater 00:17
We’re coming out of the pandemic, rents are skyrocketing like never before.
Bianca Rego 00:22
The housing market was nuts. So Ziggy and Kate set themselves a goal with a really high bar, figuring out how to buy their own home before they turned 30.
Ziggy Linklater 00:33
I think we just thought it’s now or never.
Bianca Rego 00:36
And they actually did it.
Ziggy Linklater 00:38
So we purchased a two-bedroom, two-bathroom, just under 1000 square foot condo in Port Coquitlam, BC. It’s got big windows that’s going to let in natural light. It’s got oversized ceilings and, of course, a large balcony where I’m going to grow maple trees, and we are going to be able to sit back and enjoy the summer.
Bianca Rego 00:59
Buying a condo is not something a lot of Gen Zers do these days, at least not without help from the bank of mom and dad. In a couple of minutes, Ziggy’s going to tell you how he and Kate pulled it off. I’m Bianca Rego, and welcome to Fireweed; a podcast brought to you by the British Columbia Institute of Technology. Fireweed is the first plant to grow after a forest fire. It’s known for its resilience and adaptability. Today we’re talking about real estate, the dream of owning it, and what Gen Zers have to do to get it. They’re redefining real estate investment. In Fireweed, we’re exploring stories of adaptation and meeting people who are shifting their behaviour for our modern world. Do you have a great story of shifting your pattern to suit the new now? Email us at fireweed@bcit.ca. Trying to buy a house anywhere in Canada right now is the kind of thing that will make you crazy. I’m a millennial. And even for my generation, buying a home is incredibly difficult. I can only imagine how frustrating it could be for a Gen Z. In fact, a recent survey showed that more than half of Canadians under 30 have just given up on the dream of owning real estate. We asked a few BCIT students what they’re hoping for. And here’s what they said.
Student 1 02:37
I think my chances of ever like buying a house just outright is probably pretty low,
Student 2 02:42
Like 60, 70%. Uh, the other 30% is because it’s too expensive here.
Student 3 02:47
I’m saving is insane for like a Gen Z, like you literally have no free time, no fun.
Student 4 02:56
It’s a tough luck trying to find a house under a million dollars.
Bianca Rego 02:59
But some millennials and Gen Zers are bucking the trend. Ziggy Linklater and his wife Kate are both 27 years old. This year, they’re moving into a 1000-square-foot condo in Port Coquitlam, British Columbia.
Ziggy Linklater 03:19
It’s always been a goal of ours to own before the age of 30. We saw it as a source of stability. So my parents had us very young; they were teenagers themselves. And they put every ounce of energy and every dollar and every hour of the day into raising really great kids. And so, owning for them was a second or third priority. It hasn’t happened yet. But for us, it’s sort of resetting that, that thing for the next generation. I want to be able to own so I could help my kids out. And it’s a bit of a snowball effect, right if I own if they own, it’s going to make it easier and easier hopefully for the family to be able to buy a piece of property.
Bianca Rego 03:59
Ziggy and Kate’s new condo cost $619,000.
Ziggy Linklater 04:05
Gross number that makes me nauseous every time I say it.
Bianca Rego 04:08
Kate works as an educational assistant, and Ziggy owns a small digital content studio. Even with their combined incomes, they knew they’d never afford a home without making some big changes.
Ziggy Linklater 04:21
So we spoke with a mortgage broker last year before purchasing, of course. We ran our numbers, and he goes, you know, this looks fine. But if you want this, you’re gonna have to basically double your income in a year. And I knew that was a lofty goal, but I said okay, let’s do it. Let’s try our best.
Bianca Rego 04:36
So Ziggy started a second business. This one does graphic design. And Kate took on extra work running a summer school.
Ziggy Linklater 04:46
Working two full-time jobs, worked weekdays, evenings, weekends, and the last resort was to just make sure that we could reduce our expenses, our monthly expenses. So we were living in a, you know, $3,000 a month, beautiful condo in a, in another metro— Van city. and so we moved to a smaller one bed, cut the rents in half, cut the utilities down significantly, we own one car instead of two. And in doing that, we were able to save over $14,000 in one year just by reducing our monthly expenses. We still had spending budgets; Katie still got her hair done, I still got my fun money. But really, it was just about being on the same page and communicating.
Bianca Rego 05:26
Ziggy said they also figured out another way to save money on the cost of their condo. They bought it before it was even built. That’s called a pre-sale.
Ziggy Linklater 05:37
Generally, it’s a little bit more affordable to buy presale than it is to buy something that’s already built. But secondly, and we wanted to put a downpayment down and then be able to continue to save before actually starting that mortgage. And so buying presale allowed us to pay our down payment, you know, set it and forget it, walk away and be able to save for before we actually move in.
Bianca Rego 06:05
This is Fireweed, a podcast brought to you by the British Columbia Institute of Technology. I’m your host Bianca Rego and we’re talking about how Gen Z is changing the conversation about real estate. Coming up, we’re going to find out about a new model of real estate investing specifically geared toward young buyers. And how you can get into the market with just a few dollars in the bank. But first, I want to tell you about BCIT School of Business and Media. It provides training in more than 120 unique programs for marketing management and professional real estate, to sales and entrepreneurship. It’s where you gain hands-on experience through real-world education. You can find out more by going to bcit.ca/business.
Addy Invest 07:05
Average house price in Vancouver is $1.3 million. That’s 260,000 cups of Starbucks coffee. Even if I make a quarter of a million dollars a year and save 10% of that, it would still take me 34 years just to afford the down payment.
Bianca Rego 07:21
That’s a TikTok ad crunching the numbers on what it really means for a Gen Z buyer to purchase a piece of real estate. I did not know that I’d have to give up 260,000 cups of Starbucks just to buy a house in Vancouver. That’s a lot of coffee, and I love coffee. The ads produced by a company called Addy Invest. That’s one of several companies that help people buy real estate through crowdfunding. Steve Jagger is a BCIT grad from its venture program. He’s a co founder of Addy Invest. Hi, Steve.
Steve Jagger 07:57
Hi, there.
Bianca Rego 07:57
So, Steve, you’ve been in business for more than 20 years, but this is your first real estate business. Where did the idea come from?
Steve Jagger 08:05
So my business partner and I have been business partners for 22 years now across seven different companies. Generally software-related companies. And so how we got to Addy, kind of long story short, was we had some success in the past where we’ve built some of these companies sold them off, made a little bit of money and Mike and I started dabbling in investments behind real estate developers. And one of those opportunities that had come Mike’s way actually looked great. So he put together a handful of people— basically a small syndicate to invest in it, and one of our employees at the time wanted to participate in this real estate syndicate. And the problem was, the developer said the minimum check to get in was $50,000. And this employee at the time had $10,000, wanted to participate and the answer, unfortunately for him, was no, he couldn’t. And he didn’t take that lying down. The whole bunch of questions came up from him as to like, Well, why are there minimums? What you know, $10,000, there’s a lot of money; why can’t I participate in these investment opportunities? You know, wealthy people make money investing in real estate opportunities, minimum check sizes, they’re so large, like, what’s the purpose? Why are there minimums? What are the costs? Why are these costs? And it was that whole conversation that kind of kicked off the idea of what Addy is now today, where we thought we could build a technology platform to enable people to participate in these real estate opportunities by essentially eliminating the barriers to entry.
Bianca Rego 09:30
That’s awesome. First of all, as a millennial myself, it is really hard to get into the housing market, and it’s seemingly impossible. But having something like Addy Investment that’s a really great idea. So in simple terms, for someone who doesn’t really understand the housing market like myself, how does it work?
Steve Jagger 09:49
So, we focus on enabling or eliminating barriers to entry so that anyone can invest in institutional, commercial-grade real state. And so how it works is you can go to our website, and you can create an account— it takes just a couple of minutes to create an account so we’ve got your details. And then, an opportunity will come onto the platform where you can make an investment into a commercial business park or an industrial park or mixed-use building or an apartment building. And you’ll have the opportunity to invest $1 up to $1,500 of that specific property.
Bianca Rego 10:26
Let’s say I decide to invest $1. How would that affect my ability to grab the return of that dollar through my investment?
Steve Jagger 10:35
Yeah, so there’s kind of two sides to it. One is the capital appreciation of the property. And the other is the cash flow or dividend distributions or dividends that come out of it. To give you an example, we invested in a Starbucks building in Chilliwack, BC. Starbucks is the tenant that has a drive-through, the buildings a couple of years old. And we have 833 investors in that property. And all of those investors get quarterly dividends or distributions from that property. And so our 833 investors are able to go through the drive-thru and buy their coffee, that revenue flows into Starbucks, and Starbucks then pays their rent. And then there’s a little bit of money left over every month. And so, every quarter, that extra money that’s leftover is distributed out to the investors that own that specific building. And so if you put $1 in or you put $1,000 in, you’ll get the same percentage return as everybody else; just the dollar amount will depend on how much you invested.
Bianca Rego 11:29
Okay, so the dollar amount will depend on how much you get back, depending on how much you put in.
Steve Jagger 11:34
Yeah, like if I put $100 in and you put $200 in, and I get a $10 dividend or distribution, you’re gonna get a $20.
Bianca Rego 11:41
So I’m gonna just reiterate, so an investment of $1, or even like $1,500, is pretty small, especially compared to that $1.3 million house in your TikTok Ad. So how is that going to help me buy a place to actually live in?
Steve Jagger 12:00
Yeah, so I think it’s, it kind of takes it back to our, our, that origin story I was talking about is, there’s a lot of young people that were trying to save money, and they still are trying to save money, but not able to get into the real estate market. And the real estate market has been moving faster than what’s available for them to save their money. And so if you back it up to that example of that employee who wanted to invest his $10,000. At that point, he had it sitting in a high-interest savings account at one of the big banks, making essentially nothing. Meanwhile, this opportunity that was available for people with a million dollars or, in the syndicate case, $50,000 slices were making 20% annual returns. And so they’re able to save their money and invest their money in a much different way than people that don’t have the ability, don’t know about the opportunities or just don’t have the money. And so by us breaking down those barriers, by using the technology, we can enable someone who has a smaller dollar amount to be able to participate like the wealthy investor does. And be able to save and invest in the same way that wealthy people currently invest.
Bianca Rego 13:10
I see. Okay, so how does that help me buy a house?
Steve Jagger 13:15
It doesn’t; we’re not giving you access to a single-family house or a condo? What we are doing is enabling you to save your money or invest your money in the real estate market.
Bianca Rego 13:28
How is that different from a real estate investment trust, which essentially pools investors’ money to buy commercial property?
Steve Jagger 13:37
Yeah, it’s a good question. So a REIT is a basket of properties. So if you invested in the Canadian shopping malls’ REIT, you would own shopping malls across the country, so you might own some shopping malls in Vancouver and Toronto. But you’d also, you know, own some in Calgary, Edmonton, Winnipeg, Halifax, wherever; what the big difference is with Addy is we enable people to invest in a specific property so that when you invest in that Chilliwack Starbucks, you’re not getting Starbucks across the country. You’re not getting Starbucks is in Edmonton and Calgary, you’re getting that one specific building, and you own a slice of that one specific building.
Bianca Rego 14:14
That’s so interesting. So why does it matter if they know the exact property they bought into?
Steve Jagger 14:19
Yeah, I think this is a neat thing. From Addy’s point of view, when we invest in a property, we enable like the tenants of an apartment building to invest in their apartment building that they’re also tenants in, if Addy comes and participates in the building. Or the Starbucks is another great example where we have 833 investors in that property. We know myself included when I’m driving out that way. I’ll drive past 50 other Starbucks is to stop at my Starbucks because I own a piece of the building. And so we know we drive economic benefits to the commercial tenants because our community of investors want to be a customer of many of the commercial tenants that exist within the buildings that they own, because they know where their distributions are coming from the distributions are coming from that tenant paying rent. And so, for them, it’s kind of a symbiotic relationship.
Bianca Rego 15:07
So will I have more money in the bank at the end of everything?
Steve Jagger 15:10
No guarantees? When you make an investment, you are putting that money at risk. Essentially, you if you make a $500 investment, you are putting $500 at risk.
Bianca Rego 15:20
Is it safer than the stock market?
Steve Jagger 15:23
I can’t give you any advice on what’s better. Stock market, real estate, crypto, we’re not allowed to give any personal or any investment advice at all. The best thing to do would be to talk to your investment advisor that knows the details about you and your world and what you’re doing and all of that. I can’t comment.
Bianca Rego 15:44
Steve, thank you so much for taking the time to speak with me. And for teaching me more about the housing market. I really appreciate it, and I learned a lot. So thank you so much.
Steve Jagger 15:54
No problem. Thanks for having me.
Bianca Rego 15:58
This is Fireweed; a podcast brought to you by the British Columbia Institute of Technology. I’m your host, Bianca Rego. And this is really got me thinking about what younger people need to do to buy their own homes these days in Canada, especially in Vancouver. And it’s so interesting to learn about other innovative ways to invest in real estate without even moving into the place. I’d like to thank my guests, Ziggy Linklater and Steve Jagger. If you like what you heard, I hope you’ll keep on listening and sharing episodes. Help us spread the word about some of the incredible adaptations, ingenuity and resourcefulness we have in this region. If you have a comment on a story or an idea for an episode, reach out via email at fireweed@bcit.ca Thanks for listening. Fireweed is brought to you by BCIT with story and audio production by JAR Audio.