I found the below article, from Marco Schwartz, about real estate crowdfunding very helpful. I haven’t yet invested in any of the platforms mentioned below but seriously considering for the following reasons:
- Diversification: you can spread your investment among many properties including residential, commercial, students and others. You can also invest in different cities and with different currencies.
- Simplicity: Everything is happening online and you avoid the headache of getting mortgage, property management, legal, Maintenance, etc.
- High yields and Capital growth: The management of these platforms are experienced real estate investors and many of the deals are normally very lucrative and not available for individual investors.
However, the main drawbacks of crowdfunding are 1) The lack of leverage as you can’t get finance to invest 2) Potential delayed resale via the secondary market.
Happy reading and please send any questions to firstname.lastname@example.org
Real estate crowdfunding is the fact to invest in real estate along with other investors, usually through a platform that will propose real estate deals and take care of all the work, like listing deals, doing all the legal work, and then managing the property. This allows you to invest in real estate with a very low amount of money (sometimes from 10 Euros or Dollars), diversify quickly into many properties, and also have a completely passive real estate portfolio.
The first platform that I wanted to mention in this article is Housers. Based in Spain, this platform allows investors to invest in real estate in Spain but also is constantly expanding to other countries in Europe, like Italy. They offer high-quality investments, usually in large cities that are actually growing fast like Barcelona. They usually propose to invest in refurbished apartments, so the rental yields on the platform are quite attractive at around 5%. They also propose many different types of investments, for example commercial real estate like small shops & even hotels, which makes it a great platform to quickly diversify your portfolio.
On top of that, the Housers platform also have a great interface, as well as a secondary market that will allow you to buy & sell shares from existing projects, meaning your investment is actually much more liquid compared to other platforms or to an actual real estate investment where you’d be a whole flat yourself. That’s actually one of the latest platforms I invested on as it was for a long time limited to Spanish investors, but since they removed this limitation I’m investing more and more on this platform.
The second platform I will mention here is Property Moose, which is a platform based in the UK, and one of the first platforms I ever invested on. They propose very high yielding apartments and houses in the UK, as they usually identify great deals that they then refurbish before renting it. It’s for example not unusual to see 7% – 8% yields on this platform. Sometimes they would also propose to buy a whole house that they will then refurbish and then divide into rooms rented individually, creating a very high yielding. They also propose other types of properties that are really interesting, like student housing or mixed commercial/residential real estate, so that’s also a great way to quickly diversify a portfolio.
The interface of the site is also very nice and easy to use and as other platforms, they also have a secondary market where you can buy and sell shares in properties at any time.
The third platform I will mention here is Property Partner, which is also based in the UK but quite different from the other that I listed in this article. Whereas other platforms usually invest in single apartments or houses, this platform focuses more on larger deals like blocks of 20-30 apartments. This makes it very interesting as well, as those are deals that you can’t usually access as a small real estate investor, as it would require a significant downpayment. As they invest in larger cities in the UK like Manchester or even London, the yields are usually lower than on other platforms, but the capital growth is quite high compared to deals in smaller cities.
The interface of the site is also great, and they have a secondary market as well to buy & sell shares of existing projects.
The last platform I wanted to mention here is the House Crowd, which is actually the first platform I ever invested on. They also propose deals mainly in smaller cities in the UK, especially around the Manchester area. The main model is to identify interesting deals that are sold below value market, that they will then refurbish before renting, resulting in quite high yields. As for other platforms like Housers and Property Moose, they also propose fixed-term loans along with classical real estate crowdfunding.