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Real estate crowdfunding is my favorite way to invest in real estate because it allows me to quickly diversify into multiple businesses and build a completely passive real estate portfolio. I am often asked what my favorite investment platforms are, so I decided to write this article to tell you what my four favorite real estate crowdfunding platforms are.
How To Invest In Real Estate Crowdfunding
Real estate crowdfunding is the fact that you invest in real estate with other investors, usually through a platform that will propose real estate deals and take on all the work, such as listing the deals, doing all the legal work and then managing the property . It allows you to invest in real estate with a very small amount of money (sometimes as little as 50 euros or dollars), quickly diversify into many properties and also have a completely passive real estate portfolio.
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Without further ado, here is a list of all the platforms that I currently consider to be the best real estate group financing platforms in Europe.
Before I go into more detail about each platform, I wanted to tell you how I choose the platforms that I post in my portfolio and of course in this article. I use two sets of criteria: objective and subjective.
To choose a platform, I first look at objective criteria, such as the platform’s advertised return, the track record of projects on the platform (for example, have they had problems with some projects) and whether there is an automatic investment function. I also check if the platform has an investment license or has applied for a license, which is a very important criterion.
After the initial selection with these objective criteria, I also use more subjective criteria to select my platforms, such as my experience with the platform. I take this opportunity to declare that I personally invest in each of the platforms present in this article. The first subjective criterion on which I base my choice is the effective yield of the platforms, which sometimes differs from the advertised yield. For this I use TrackInvest, a software I developed that allows transactions to be entered from the platform before the actual return is obtained. I then compare this to the performance announced by the platform to see if they match.
The Pros & Cons Of Real Estate Crowdfunding
The first platform I wanted to mention here is EstateGuru, which is a platform in Estonia. He also mostly suggests investing in real estate loans, which means you get a fixed rate at the start (usually around 10 – 12%).
What I really like about this platform is that they usually offer monthly repayments on the loans they offer, which means that you will actually get passive income every month when you invest in these development loans. On EstateGuru, the minimum investment in each real estate project is also lower than other similar platforms and is 50 euros per project. This means that you can actually easily diversify your investments on the platform.
The interface of EstateGuru is also very nice and easy to use and every project is very well detailed and documented. They also offer an auto-invest feature which is very handy if you want to fully automate your investments on the platform.
As for all the platforms I mention in this article, I myself am an investor on the platform, and so far I have received an average return of 11.10% on my investments, which is really close to what the platform advertises .
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Another platform I wanted to mention in this article is Reinvest24. Based in Estonia, this platform enables investors to invest in equity real estate crowdfunding. This means that you will actually become the owner of a share in the properties you invest in and will receive monthly rent as you would invest in ‘classic’ properties. Plus a possible capital gain after the sale of the property. This is really a form of group real estate financing that I really like because you get passive income every month.
Reinvest24 offers high quality investments, usually in the Tallinn area. They usually choose properties with a high rental yield, so returns on the platform are quite attractive at around 7%. Combined with potential capital growth after project completion, you get a total potential return of almost 14%. They also suggest many different types of investments, for example commercial properties such as small shops and even restaurants, making it a great platform to quickly diversify your portfolio.
I myself have been investing in this platform for several years and received returns of about 6.5% on monthly rent, and I also got one project that came out with an annual return of about 7%. They also always paid their rent on time.
Another platform I wanted to mention is Bulkestate. It suggests investing in high-quality real estate construction loans, usually in Latvia. Compared to other platforms, the returns are very high and are around 14%. You can also invest from only 50 euros, which is one of the lowest minimum amounts of similar platforms.
Real Estate Crowdfunding 101
Bulkestate also has a unique feature compared to other platforms, which is the ability to buy flats in bulk. Since they offer apartments wholesale, the prices are lower than if you went to buy a similar apartment yourself. This is an interesting opportunity if you have more capital to invest, because you can easily diversify into several apartments that you buy at a nice discount.
On my own portfolio on the platform, I’ve gotten about 13% returns so far – which is really close to what the platform advertises.
They also have a very strict due diligence process to choose which deals will end up on the platform and have the ability to step in on some projects if something doesn’t go according to plan, which means more security for investors. Overall, Bulkestate is really a platform that I recommend to have in any real estate portfolio.
One platform I really like is InRento. Similar to Reinvest24 that I already mentioned earlier in this article, InRento allows you to invest in real estate crowdfunding capital projects, which means you will receive rental income at the end of each month.
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They basically look for borrowers who want to finance real estate projects and then match them with investors on the platform. They have a very strict vetting process for these projects – looking at the financial viability of the project, as well as the past results of the lender behind the project. This ensures the safety of investors’ funds, as there are only high-quality real estate projects on the platform.
They also have very attractive returns with an average of 7% on monthly rental payments alone – and also a secondary market that will help you quickly build up your portfolio in case there are no new projects on the primary market.
I really love these types of platforms that allow you to be like a virtual landlord – and that’s why I really recommend investing in InRento.
This platform is very close to Reinvest24 in its way of working – as it offers both property development projects and projects in which you will become the owner of a part of the property, in exchange for a monthly rent. Plus, of course, the potential capital gain from the resale of the property after the project is complete. As I mentioned before, this is one type of real estate financing that I really appreciate because it will give you passive income that will come in every month.
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Rendity also offers high-quality projects, most of which are located in Austria or Germany. I also really like the fact that it allows you to diversify your investment portfolio in other Western European countries, while most other platforms are more focused on the Baltic States. The site’s interface is also very clear and easy to use, and they also have an auto-invest feature that allows you to fully automate your investments on the platform.
In terms of yield, Rendity offers projects with yields of around 6% for part of the rental yield (with 6% potential capital gain on resale), and around 9% for property development projects. After more than 2 years of investing in the platform, I also got very similar returns.
I also had to mention Raizers, a platform I recently added to my portfolio. Raizers is actually a real estate group financing platform based in France, with offices in Switzerland, Belgium and Luxembourg.
They offer development and renovation projects on their platform, with returns of around 10% on average, and are mostly based in France. They apply a strict screening process to place projects on their platform, and projects usually come with a personal guarantee from the lender. They also have an excellent track record of successful projects over the years.
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It’s nice to see a good platform also in this part of Europe – that means you
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