Real estate crowdfunding platforms
Real estate investments are popular and relatively low-risk. You can invest in real estate by buying, selling and renting property. But if you don’t want to spend a lot of time and funds, you can easily invest in property projects, stocks and funds on real estate trading platforms.
Please note: trading on the financial markets involves risks, you can (partially) lose your investment.
Real estate crowdfunding platforms in Europe
To invest in real estate companies, projects or funds, you will need an account with an online broker. There are many real estate brokers. Below, you will find a selection of the biggest and best real estate crowdfunding platforms active in Europe.
Max Crowdfund is a real estate investment platform from the Netherlands. On the crowdfunding site you can invest in different property assets around the world starting from 100 euros. The platform is active in the Netherlands, Sweden, the United Kingdom, Canada, Australia and New Zealand.
Real estate investment platform Brickstarter was founded in 2017 and specializes in vacation rental properties. You can invest on the platform with a minimum amount of 50 euros. With funds from different investors the platform renovates and manages property, eventually renting and reselling it for profits.
EvoEstate is an online peer-to-peer real estate crowdfunding platform. On the site you can invest in loans, rent and equity real estate projects across Europe. You can start investing from 100 euros. The company is located in Estonia and started operations in 2019.
Estateguru is a real estate investment platform from Estonia that was founded in 2014. You can invest in short-term real estate loans across Europe. Investors can fund projects starting from 50 euros.
Reinvest24 was founded in 2018 by a team that's active since 2005 in real estate investing and IT. It mostly offers projects in real estate in Riga, Talinn and Moldova. As of February 2021, it's also active in Spain. The average gross return is over 14%, investments are covered by a mortgage through a Collateral Agent, and it has a secondary market.
Brickowner is an English platform founded in 2017 as crowdfunding platform but currently only available to investors who are permitted to invest in unlisted securities. In the UK it is restricted to Certified High Net Worth Individuals – those who have an annual income of £100,000 or more or net assets of £250,000. Since 2018 it helps property developers and asset managers onboard and manage their own investors. Secondary market is included.
With LandEx, you can invest in a plot of farmland. The Estonian platform offers loan contracts with variable interests, so that the value depends on the price of the asset and the investors benefit from the full increase of the asset value. The loan investment is backed by a mortgage set for that specific land.
Raizers is an investment platform through which professionals and individuals can lend to real estate developers. It was founded in Switzerland and is currently active in France, Belgium and Luxemburg as well. The average yield is 9,9%.
What is real estate investing?
Real estate investing has been popular for decades, as it provides good returns and carries little risk. You can invest in it in different ways. Firstly, you can buy physical property and sell or rent properties.
This way you can profit off capital gains, for example when renovating a house or office and reselling it at a higher price. Alternatively, renting out property creates a steady income from monthly rent payments.
Real estate investments provide good returns and carry little risk.
However, this type of property investment is not only expensive, it also takes time and effort. Luckily there are a lot of other ways to invest in properties with a much lower minimum investment. For instance, you can invest in funds and bonds. You can even invest in property on the stock market through real estate trading platforms or through crowdfunding platforms.
How do real estate trading platforms work?
Most online brokers that focus on properties are in fact real estate crowdfunding sites. They bring many individual investors together to fund commercial real estate projects and companies.
Although crowdfunding is mostly known for directly funding projects, you can also invest in company shares, funds and bonds. Therefore, these platforms are suited for investors that want to profit from properties without becoming a home-owner or landlord.
On real estate platforms accredited investors can profit from property without becoming a landlord.
You can create a trading account with an online broker to invest in, for example, property shares and bonds. Platforms for trading property assets usually offers investment information as well, such as historic and current market rates. As a new investor this is especially useful. An online trader can also store funds on the platform, so you can easily invest, exchange or withdraw.
Signing up is easy and often relatively cheap. In addition, quality real estate platforms will ask you to provide some background information to check your creditworthiness. The same goes for companies wanting to raise capital. This way you and other users will not be unpleasantly surprised. If and how due diligence is performed will differ per trading platform.
Why choose an online property broker?
Firstly, real estate platforms make investing more accessible online. This makes it easy for first-time investors to get started, and eases the process for existing real estate investors. In addition, you can start investing with only small amounts. For example, a real estate broker may require a minimum investing amount of 50 or 100 euros. Investing with an online broker is also relatively cheap.
Risk spreading is made easy with an online broker.
In addition, real estate crowdfunding platforms usually have a high-quality mobile app. Therefore you can manage your investment portfolio on the go. This can be interesting for investors that want to be more actively involved in their investment decisions.
Lastly, risk spreading is made easy with an online broker. Most investment platforms offer various types of property assets and projects, so you can spread funds accordingly within the same service. You can choose to handpick real estate assets yourself, but when investing in a fund the risk spreading is automatically done for you.
Costs of a real estate platform
The first thing to compare when choosing your real estate investment platform is the costs. This is a deciding factor, since the costs will directly impact returns of investors. Commercial real estate brokers usually have an upfront fee and a cost per transaction. Depending on whether the platform makes investment decisions for you, like with a fund, there can be additional fees.
Indirect costs can vary a lot depending on the platform.
There can be indirect costs as well. These are often charged by funds and ETFs, for example, such as legal, management and accountancy fees. If a property investment platform also pays out dividends and saves securities, these services may be incorporated in the market price. Indirect costs can vary a lot depending on the platform, so keep an eye out for this.
Comparing real estate investment platforms
Aside from costs, there are other ways to choose the best real estate crowdfunding platform for you. Most importantly, consider what property assets you want to invest in.
A platform may not offer your investment of choice. Alternatively, there are platforms that only specialize in one type of investment, such as real estate ETFs.
Of course, you can choose to open an account with several platforms too. This has the benefit of trying out different traders and seeing which one you like best.
Another factor to decide upon a property investment platform is your investment style. This often goes hand in hand with your real estate portfolio. For example, you might want a platform where you can handpick your investments instead of letting a fund do this for you. And if you are a new investor, you might want more guidance and market rate information from your online real estate broker than more experienced investors.