Open a Rendity account

If you’re looking to invest in real estate, but you don’t quite have the means to go through the traditional channels, it might be worth considering a crowdfunding alternative.

Rendity focuses on properties located in Austria and Germany, two markets known for their stability and growth potential. By pooling funds from numerous investors, Rendity can participate in lucrative real estate opportunities that might otherwise be out of reach for individual investors.

The platform allows you to access the German and Austrian real estate markets with a minimum investment of just €500.

In my Rendity review, I cover everything you need to know about the crowdfunding site. This includes the types of real estate you will be investing in. what sort of returns you should expect, and of course – whether or not your money is safe.

What is Rendity?

Launched in 2015, Rendity is a European crowdfunding platform that focuses exclusively on real estate projects. This is typically split across two main channels – traditional real estate buy-to-let and then the funding of third-party projects. Regarding the former, you – alongside your fellow investors, will be providing a subordinated loan for the purchase of a property with the view of having it rented it out to tenants.

Then, you will receive your share of monthly rental income – less fees. For even larger returns, Rendity also allows you to back development projects. For example, you might help fund a new block of apartments, whereby the developer enters into a loan agreement with Rendity. In return, you and your fellow investors will receive a fixed rate of interest (usually one payment per year) until the loan is repaid in full.

Irrespective of which project you back, the vast majority of deals are situated in Germany and Austria. In terms of statistics to date, Rendity notes that it has successfully completed 196 funded projects, which translates into €137 million in invested capital. The average annualized return thus far amounts to 6.43% – as per Rendity.

What Investments Does Rendity Facilitate?

As noted above, Rendity offers two different types of investments – one based on equity (rental real estate) and the other based on debt (development loans).

Let’s explore these investment streams in more detail.

Rental Property Investments

In its most basic form, when you invest in a rental property at Rendity, you are funding a subordinated loan together with other investors. Then, the property will be rented to tenants. As such, you have the opportunity to generate income in two forms – appreciation and monthly rent.

• Appreciation: If and when the value of the property increases in value. Of course, this can only be realized once the property has been sold – more on this later.
• Monthly Rent: As and when the tenant pays their rent, this will be forwarded to Rendity. Payments are typically settled in your account quarterly. Obtaining the full payment is always on the proviso that tenants do not fall behind on their payments – more on this later.

I noticed two things in particular when browsing historical rental property opportunities at Rendity. Firstly, deals seem to fill up very quickly when they hit the platform. Secondly, and most importantly – most rental properties already have tenants. This means that you stand the chance of earning income the moment the deal has been signed off.

To show you the types of deals available, below I have listed a couple of example projects.

Example 1: Am Tabor, Vienna 4% Per Annum

This particular funding opportunity was for a rental block that consists of 176 apartments. Based in Vienna, the property raised just under €1.5 million from Rendity investors. The project also received funding from external sources, including a €35.1 million bank loan.

The project comes with an annualized rental income of 4%, which is distributed every three months.

Example 2: Weseler Straße 6-8, Duisburg 5.25% Per Annum

In this funding opportunity, Rendity investors collectively contributed €420,000. Located in Duisburg, the property consists of 23 residential units.

There are also four commercial units as part of the premises. The deal pays 5.25% per year, with rental income paid every three months.

Development Loan Investments

The second investment stream available at Rendity is that of its development loans. In its most basic form, you and your fellow Rendity investors will be loaning money to real estate developers. In turn, the funds will be used to help develop new projects – both in the commercial and residential sectors. Some of the development loans available at the platform are for major renovation projects.

In terms of duration, projects typically range from 18 – 30 months. In the vast majority of cases, the developers repay the interest on an annual basis, which is somewhat unusual. From your perspective as an investor, this does limit the opportunity to reinvest your payments on a month-by-month basis. In terms of yields, this sits within the 6-7% per year range, albeit some deals do pay slightly higher.

Crucially, Rendity explains that it performs a highly stringent due diligence process before a developer makes its way to the platform. This starts at the very offset with an enhanced analysis of the developer itself – with a particular focus on its balance sheet. After that, the due diligence team will then explore the specifics of the project.

Rating System

I am impressed with the transparency of the Rendity Rating System. In simple terms, this allows you to view the metrics that the platform utilizes to assign a project with a rating.

The Rendity Rating System uses a sliding scale that starts with A (least risk) and ends at E (most risk). Each individual variable is awarded a point score, which is then collectively added up to form the rating. For example, if the property is located in a top central location in one of 12 selected European cities, it will receive the highest score.

At the other end of the spectrum, properties based in a rural location or emerging market will get the lowest score. There is also a strong emphasis on the current state of the tenancy fulfillment rate. For example, if the property is a multi-complex with several units, Rendity prefers locations that are 90% leased with continuous income. At the other of the scale, a low score is given to locations without a lease at all.

Does Rendity have Auto-Invest?

Many new investors look to stay as hands-off as possible with their investments, after all, that is one of the main reasons to invest in real estate using a platform rather than doing so directly. You get to get good returns without getting your hands dirty.

Therefore one of the most sought-after functionalies with platforms is the auto-invest feature, which allows you to invest automatically based on a set of parameters that you set yourself.

Rendity offers the Rendity Savings Plan system which is essentially an auto-invest system.

The Savings Plan simplifies the investment process and makes real estate investment more accessible, leveraging the strength of automation.

Investors can set up a monthly deposit of a predetermined amount, starting from as low as €50, to be automatically invested in real estate projects. This plan takes the guesswork out of investing, allowing for a hands-off approach to building a diversified real estate portfolio.

One of the key benefits of the Rendity Savings Plan is the potential for high returns. The properties in Rendity’s portfolio are carefully selected and vetted for their income potential, aiming to provide investors with a steady income stream through rental revenue and potential appreciation.

Additionally, by automating investments with the Savings Plan, investors can take advantage of a concept known as dollar-cost averaging. By investing a consistent amount each month, investors buy more shares when prices are low and fewer when prices are high, potentially reducing the impact of market volatility over time.

Overall, Rendity’s Savings Plan represents a simplified, accessible way for individuals to invest in the real estate market of Austria and Germany. Its focus on automation and consistency, combined with the potential for high returns, make it an attractive option for investors looking to diversify their portfolio.

How Much Does Rendity Charge?

Rendity notes that it does not charge investors any platform fees, nor will you be charged to make an investment. Instead, Rendity takes a cut from the deals it facilitates. The latter is different from project to project, but is visible in the VIB document (investment information sheet) of each project.

Who is Behind Rendity?

Rendity was founded by Lukas Müller and Tobias Leodolter.

Lukas Müller serves as the CEO of Rendity. Prior to founding Rendity, he worked in the real estate industry with a focus on property development and project financing. This experience gives him a deep understanding of the market, which he brings to his leadership role at Rendity.

Tobias Leodolter is the CTO of Rendity. His background is in economics and computer science, and he has experience in startups and fintech companies. This combination of skills and experience makes him well-suited to his role at Rendity, where he is responsible for overseeing the technological aspects of the platform.

Together, Müller and Leodolter bring a blend of real estate, financial, and technological expertise to Rendity. Their combined experience has been instrumental in shaping the company’s vision and strategy, as they work to make real estate investment more accessible and transparent through technology.

In 2020, the company also raised €1.8m in seed funding from a Vienna-based venture capital firm – aws Gründerfonds.

When do I get my Money Back?

When you get your money back ultimately depends on the type of investment stream you opt for.

Here’s the lowdown:

Rental Properties

As is to be expected, rental property deals at Rendity are long-term investments. That is to say, the money is tied up in the property until a sale is realized. The good news is that you do have the opportunity to exit your investment after 24 months and when you do so, there is no exit fee.

Development Loans

In the case of development loans, things are a bit more straightforward. That is to say, you will receive your principal investment back at the end of the term. As noted earlier, deals average anywhere between 18 and 30 months – so you must be comfortable having the funds locked up for the entire period.

No Secondary Market

Crucially, there is no secondary marketplace available at Rendity. Once again, this means that you need to view your investment on a medium-to-long-term basis, as you won’t be able to liquidate your funds early.

Is Rendity Safe?

As is the case with all online investment platforms – especially those involved in the crowdfunding arena, you need to make some serious considerations about the risks.

In the case of development loans – the overarching risk is that of default. In other words, if the developer borrowing the funds is unable to repay your interest or worse – the principal, you stand the risk of losing money.

In order to counter this, Rendity notes that there is a “liability in the form of a hard letter of comfort in the amount of the loan amount issued by the parent company“. This still, however, does not act as a surefire safeguard on the protection of your funds.

When it comes to rental income, the risks here are somewhat less prevalent. That is to say, one of the biggest risks that you face is that of a tenant default. As most of the projects hosted at the Rendity are complex-style apartment blocks with dozens of rental units, this at the very least means that you are not over-exposed to a single tenant. You also have the risk of depreciation on the property value.

The good news is that most of the rental properties that the team at Rendity accepts are new builds. Once again, these are typically less risky.

As always, if you do proceed with an investment, just make sure that you never inject more than you can afford to lose.

Rendity is regulated by the Deutsche Industrie und Handelskammer as an investment broker.

Getting Started at Rendity

Like the sound of Rendity and wish to get started with an investment today? If so, below I list the main steps that you will need to take.

Step 1: Open an Account

You will first need to visit the Rendity homepage and elect to open an account. As is standard practice in the online crowdfunding space, this means that you will need to provide some personal information.

Step 2: Deposit Funds

Once you have opened your account, you will then be asked to deposit some funds. Fortunately, Rendity accepts debit cards.

This means that you can get started with an investment straight away – as opposed to having to wait days on end for your bank wire to arrive. With that said, bank wires are also supported, so if you’re in no rush then this is an alternative option for you.

Don’t forget – minimum deposits/investments start at €500

Step 3: Upload Document

In order to comply with anti-money laundering regulations, Rendity will now ask you to upload a document to validate your payment details. If opting for a debit card, this needs to be a copy of the card (with the middle 8 digits covered), alongside a bank account statement that contains your name and address on it.

This needs to be from the same bank that your debit card is attached too. Alternatively, if you are depositing funds from your bank account, just a statement will suffice.

Step 4: Browse Investments

It is reasonable to suggest that the due diligence team at Rendity are into quality over quantity. After all, the platform has facilitated just 63 deals since its inception in 2015. As such, you likely won’t have an abundance of opportunities to browse through.

With that being said, there is a significant amount of research available at your fingertips. This includes a full breakdown of the property or respective development project – as well as a Layman’s overview of the risks and returns. You will also get to assess the structure of the deal.

Step 5: Complete Investment

Once you have done your homework on your chosen opportunity, the investment process can be completed at the click of a button. Simply enter the amount that you wish to invest (making sure it is at least €500), and confirm it. After that, you will need to wait for the rest of the funding target to be met by other investors of the site.

Customer Support at Rendity

If you need to get in touch with the team at Rendity, you can send an email to [email protected]. The platform typically replies within a few hours.

Alternatively – Rendity also offers a telephone support line, which is somewhat unusual for a crowdfunding platform.

The Austrian toll number can be reached at: +43 141 800 11
The German toll number can be reached at: +49 89262042250

Alternatives

If you’re looking for real estate investments elsewhere in Europe, you can check out the following platforms:

1. EstateGuru
2. Bulkestate
3. Raizers

Also, have a look at my list of best European real estate crowdfunding platforms for my most up-to-date thoughts on the best platforms.

The Verdict?

In summary, Rendity offers you the chance to gain exposure to the Austrian/German real estate industry without breaking the bank. Instead, the platform allows you to invest from just €500. You will have the choice of backing development loans with an average yield of 6-7%, or for those of you that desire regular income – rental properties. Either way, the end-to-end set-up process is super easy, and the platform even supports debit cards.

On the other hand, it remains to be seen how the early exit fee system actually works. As I discussed in this review, Rendity notes that investors can exit a rental income property after 24 months by paying a fee, but what this amounts to I do not yet know. Other than that, Rendity is an option well worth considering – although just make sure you have a firm grasp of the risks and that you are prepared to lock your money away for the stated term.

Rendity offers a 25 Euro signup bonus for new investors, so click the link below if you want to get a leg up and start investing in German and Austrian real estate.

Invest in Rendity

I spent the latter half of my twenties traveling the world, and now that I’m in my mid-thirties, a topic that comes up with my wife and friends is whether it makes financial sense to still do any long-term traveling while also renting an apartment at our home base.

In our twenties, we could fit all our possessions in a pair of suitcases, and once we left a country we would terminate the rental agreement and then rent another apartment in the new country we move to. However, since we settled in Barcelona we have a nice apartment that we rented long-term, and rental prices in Barcelona are not exactly on the cheaper end.

Hence if we were to consider spending a few months every year traveling and therefore renting an apartment in another city or country, it is worth considering if that would make financial sense.

The initial knee-jerk reaction is usually that it doesn’t make any sense to be paying two rents. However, let’s see if we can assuage our panicking brains.

Before I continue, I need to say that as a family we would never be comfortable renting out our apartment while we travel. There are many people who feel totally comfortable doing so, and that was actually the motivation behind Airbnb, however, it’s just not for us. Our home is too much of a personal space to be able to rent it out.

That is why if we travel for a few months every year, we would not be able to offset the extra costs by renting out our home.

Now let’s move on to see if we can figure out a way to make this work.

A good apartment in Barcelona costs around €600,000. We could buy an apartment and then still travel, thus having no guilt feelings about paying rent for two places while only using one.

Buying the apartment outright, apart from requiring a big sum of money to be tied up and practically killing any notions of diversification in our net worth, would eliminate any possible investment income.

There’s also the other option of taking out a loan, but you’d still need to pay the mortgage which of course includes interest apart from the principal. For the purposes of this calculation, and because I am not a big fan of debt, I’ll leave that option out of the equation.

I feel confident in being able to make 8-10% per year when investing, so that would return €50,000 if I invested that sum of money. Remove tax of around 30% and we are left with €35,000.

The rent per month of that same apartment costs around €2,000, so we get a total yearly cost of €24,000. The money earned from the investment more than covers the rent, meaning that I should not be worrying about whether this traveling is a bad financial decision.

Every financial decision has to be taken in the context of life ambitions and what we want to achieve. If traveling for a few months a year will really enhance our enjoyment of life, and we are earning enough money from investments to cover the costs, then there is absolutely no problem in doing so.

Do you agree?

Founded in 2014, Crowdestate is one of the oldest real estate crowdfunding platforms in Europe with a 16.87% annual return rate, 48360 active users from 123 countries and 249 investment opportunities completed.

Here are some benefits for investors:

• Pre-vetted investments only
• No investment fees
• No trading fees
• Private and business accounts
• EUR 100 minimum investment

How does Crowdestate Work?

As described, Crowdestate is a real estate crowdfunding platform.

The platform’s relationships with experienced real estate developers gives it access to a large number of off-market real estate investments.

According to Crowdestate, only the best opportunities surviving in the rigorous due diligence process are published for investing. Extensive background information, business plans, and financial models combined with a low 100 euro minimum investment are making investing quick and easy.

Crowdestate makes it clear on their website that they are open for business to both investors and those seeking funding.

[Read more…]

CrowdProperty is a fintech/proptech online-lending innovator, exceptionally efficiently matching the demand (quality property professionals undertaking quality property projects) and supply (retail/institutional investors) of capital for value-creating property projects, delivering a better deal for all – borrowers, lenders, the under-supplied UK housing environment and spend in the UK economy.

CrowdProperty has lent £120,000,000, funding the development of over 1,200 homes worth over £220m since 2014, carefully curated from over £4.5bn of applications.

CrowdProperty became the first and only property P2P lender to become Brismo Verified, independently validating CrowdProperty’s market-leading performance, showing significant outperformance of Brismo’s UK P2P Index. CrowdProperty was recognised in the Deloitte Fast 50 list 2020 as one of the 50 fastest-growing tech businesses in the UK (#41) and the #1 fastest growing tech businesses in the Midlands.

Actual property development and investment experience lies at the heart of the business meaning hands-on, expertise-led due diligence and loan monitoring.

How does CrowdProperty Work?

Lending is focused on the SME property professional market, a key segment for supplying much-needed UK housing stock, which is poorly and inefficiently served by traditional funding sources.

CrowdProperty funds property professionals undertaking any sort of property project (including auction purchases and bridging), structuring the perfect funding product and doing so with greater speed, ease, certainty and expertise than anyone in the market. As property people providing property finance, we intimately understand the market needs.

How is CrowdProperty Regulated?

CrowdProperty is directly authorized and regulated by the FCA, is an HMRC-approved ISA / IFISA manager, attracts significant SSAS Pension and SIPP Pension capital and is a founding member of the Innovate Finance 36H Group (and formerly on the board of the P2PFA / Peer-to-Peer Finance Association).

Open a CrowdProperty Account

EstateGuru, once a leading European peer-to-peer (P2P) platform for short-term, property-backed loans, has faced significant challenges in recent years, leading to a decline in performance and investor confidence. This review will delve deeper into EstateGuru’s current difficulties, exploring the reasons behind its challenges, the impact on investors, and the overall outlook for the platform.

Background on EstateGuru

Founded in 2014, EstateGuru aimed to provide an accessible platform for small investors to participate in property-backed loans, primarily across Europe. The platform quickly gained popularity due to its transparency, low minimum investment threshold, and seemingly attractive yields. Over the years, EstateGuru expanded into several new markets, including Germany, Finland, and the Baltic states, rapidly increasing its loan book.

Historically, EstateGuru focused on providing short-term financing to property developers and small businesses, typically for bridge financing, development projects, or refinancing purposes. Investors were attracted by the relatively high interest rates offered—often ranging from 9% to 12%—and the security provided by property-backed loans. Additionally, the platform’s user-friendly interface, transparency, and low barriers to entry made it appealing to retail investors seeking exposure to real estate.

However, as EstateGuru aggressively pursued expansion, it began to face significant challenges. The rapid scaling of operations and entry into new markets exposed weaknesses in their risk management and underwriting practices. What was once a platform known for its transparency and reliable returns has struggled to maintain these standards in light of increased defaults and operational pressures.

Escalating Default Rates

The platform’s aggressive expansion strategy, particularly into markets like Germany and Finland, has resulted in a substantial increase in loan defaults. As of November 2024, over 50% of EstateGuru’s outstanding loans are in default, raising serious concerns about the platform’s risk assessment and management practices (p2pempire.com). The rapid scaling of loan volume appears to have strained EstateGuru’s ability to adequately vet borrowers, leading to an increase in poor-quality loans.

Defaults are especially prevalent in newer markets, where EstateGuru’s local knowledge and borrower relationships are less robust compared to its initial markets in Estonia and Latvia. Investors are now experiencing prolonged recovery times, which negatively affects liquidity and undermines the confidence that was previously associated with the platform’s secured loan structure. It highlights a failure to adapt underwriting standards effectively to different regulatory environments and borrower profiles.

Financial Instability

EstateGuru’s financial health has also deteriorated, with the company reporting a loss of €5.88 million in its latest annual report. Despite an 11% increase in revenue to €8 million, operating costs and employee expenses surged, contributing to the substantial loss. The increased operational expenses are attributed in part to the establishment of new offices, expansion of the workforce, and higher costs associated with managing the growing volume of non-performing loans.

The challenges have been compounded by rising interest rates and changes in investor sentiment. Many retail investors are re-evaluating their risk tolerance, particularly given broader economic uncertainties across Europe. The decline in investor appetite for higher-risk loans has led to reduced funding availability on EstateGuru’s platform, causing delays in financing for new projects and in turn reducing EstateGuru’s commission income.

Investor Returns Under Pressure

High default rates have directly impacted investor returns. While EstateGuru previously offered attractive yields, the current performance indicates that the advertised returns are not attainable for broadly diversified portfolios. Many investors are now receiving little to no interest due to prolonged default recovery processes, and some have even faced principal losses.

Investors who joined EstateGuru during its earlier years might still remember the platform as a reliable source of passive income, but the recent trends have significantly altered this perception. EstateGuru’s communication regarding loan recovery processes has also been criticized for lacking transparency. Many investors are frustrated by the vague updates provided on defaulted projects, making it challenging to assess the likelihood of recovering their funds.

Moreover, EstateGuru’s secondary market, which once offered a potential exit route for investors, has also seen a decline in liquidity. The introduction of new fees has discouraged many users from actively trading loans on the platform, further reducing opportunities for investors to exit underperforming investments.

Management and Strategic Challenges

The company’s rapid expansion into new markets has led to operational difficulties. Management is now focusing on resolving legacy portfolio issues in these regions to maximize returns for investors. EstateGuru has admitted that its underwriting processes did not sufficiently account for the unique risks presented in each new market, leading to inconsistencies in loan performance.

To address these issues, EstateGuru has stated that they are enhancing their due diligence procedures, implementing stricter borrower vetting, and restructuring their debt recovery team. However, these efforts are yet to produce tangible improvements in default rates or recovery timelines. Investors are understandably cautious, as the platform attempts to navigate these operational changes while managing an increasingly skeptical user base.

EstateGuru’s leadership has also faced scrutiny, with critics pointing to a lack of proactive measures during the early signs of loan defaults. Instead of curbing expansion and focusing on improving the quality of the existing loan book, EstateGuru pursued growth, which now appears to have been an unsustainable strategy. Additionally, their focus on scaling into new jurisdictions without fully understanding the local real estate markets has been a critical misstep.

Increased Investor Fees

In response to financial strains, EstateGuru has introduced additional fees for investors, including a 3% secondary market transaction fee, a €3 withdrawal fee, and a €10 monthly inactivity fee for accounts without investments in the past 12 months. These fee increases have been poorly received by the investor community, who feel penalized at a time when they are already grappling with high default rates and diminished returns.

The introduction of these fees appears to be an attempt to stabilize EstateGuru’s financial position by generating additional income from the existing investor base. However, such measures could further alienate current investors and discourage new ones from joining. The secondary market fee, in particular, has reduced the attractiveness of using the platform’s secondary market to exit investments, resulting in lower liquidity and more difficulties for investors looking to sell off troubled loans.

Impact on Investor Sentiment

The combination of escalating default rates, increased fees, and financial instability has taken a significant toll on investor sentiment. Investors who once praised EstateGuru for its simplicity, transparency, and strong returns are now voicing their dissatisfaction across various investment forums and social media. Complaints often center around poor communication, the lack of transparency in loan updates, and the inability to exit investments without incurring heavy losses.

The drop in sentiment has also led to a reduction in new capital flowing onto the platform. EstateGuru previously relied heavily on reinvestment from satisfied investors, but with the current climate, many investors are opting to withdraw funds rather than reinvest. This has created a funding gap that EstateGuru is struggling to fill, further exacerbating the issues faced by borrowers who rely on the platform for financing.

Salvaging Positive Aspects

Despite recent challenges, EstateGuru has historically provided opportunities for investors to participate in real estate projects with a low minimum investment threshold. The platform’s focus on property-backed loans offered a level of collateral security, and its user-friendly interface and auto-invest features were well received by investors. In its earlier years, EstateGuru successfully funded numerous projects and provided steady returns to its investors.

The diversification opportunities offered by EstateGuru—across geographies and types of real estate projects—remain appealing in theory. For those willing to accept higher risks, EstateGuru could still offer potentially lucrative opportunities if the company manages to turn its operations around. The fact that all loans are secured by real estate means there is still some hope for recovery, even if the timeline is uncertain and often delayed.

⚙️ How does EstateGuru Work?

EstateGuru requires a minimum of €50 to start investing in real estate projects operating in 6 countries: Estonia, Latvia, Lithuania, Spain, Finland, and Portugal. This minimum amount is significantly higher than other crowdlending platforms such as Mintos.

The platform obliges builders, developers or owners to present a business plan and an exit strategy which is reviewed in detail. Once this is approved by EstateGuru’s risk experts, the project is released on the platform and made available to its investors.

Once the loan is fully funded, the contracts are signed and the funds are released to the borrower. Each loan is secured with a mortgage, usually a first rank one (93%).

The upside for borrowers is that through EstateGuru, they get access to funds up to 5 times faster than through traditional banking procedures and at better rates than those provided by standard non-bank lenders.

Should the syndication period, the length of time that a loan can be open to investors on the platform, expire before it reaches its target loan, all funds are returned to the investors’ virtual accounts.

EstateGuru’s business model is to finance projects which have solid collateral, using first-rank mortgages, which is the most straightforward and secure type of funding in real estate lending.

Real estate is currently regarded as the best kind of collateral since it is something utterly physical and visible. EstateGuru also uses residential real estate as collateral. The rationale here is that people will always need a home and place to live, so the demand for real estate is not going to suddenly disappear. The value might fluctuate, but long-term it’s always going to be there. On the other hand, for example, a company can go bankrupt and thus its value will go down to zero with no chances of ever recovering. Hence it is a much weaker form of collateral.

✍🏻 Registering to EstateGuru

EstateGuru’s website is clean, user-friendly and well-designed. It comes in 5 different languages: English, Estonian, Latvian, German and Russian, with an online chat system available in which team members typically reply within 20 minutes.

Signing up is fast and requires 5 simple steps to get in and start investing.

The platform allows users to register through email, Facebook or Gmail. I always suggest setting up a specific password for each platform for added security.

Upon verifying the email, simply enter the investor or company representative information. EstateGuru also presents you with the option of 2-step authentication.

Next, you can either upload your passport, ID card or driving license manually or by using Veriff, an online identity verification system which uses your phone camera or webcam to confirm your identity.

The final step in the registering process is the KYC section. This step is required to be compliant with anti-money laundering laws.

Once your registration is complete, head over to your dashboard for an overview of your portfolio. Here you can submit your first deposit, which must be done via a regular European bank payment transfer (SEPA).

Following your first deposit, EstateGuru allows for transfers via LHV Bank Link, as well as third-party service providers such as Trustly, TransferWise, Revolut, N26, Lemonway, and Paysera.

🏘️ What Can You Invest In?

One of the benefits of investing your money in a crowdlending platform such as EstateGuru is that you get to choose which projects you wish to invest in.

You will notice that certain projects are split up into stages. Since the platform only lends against the current value of the collateral and not the future value, EstateGuru makes use of the stage financing method. By scheduling the project in stages, the borrower can increase the collateral value of the property by developing it further with the acquired funds. In this way, the investment amount increases at each stage of the project, due to the LTV increase.

Conveniently, EstateGuru allows investors to filter by interest rate, LTV, Country and Schedule Type. Schedule Types come in the forms of Annuity, Bullet or Full Bullet, the latter being the riskiest out of the three.

In an annuity-type schedule, both the loan interest and the principal will be paid periodically. In a bullet-type schedule, the loan interest will be paid periodically, with the principal amount being paid at the end of the loan period. Consequently, in a full bullet type schedule, both the interest and the principal will be paid at the end of the loan period.

At the time of this review, their latest investments were presenting higher loan amounts with Bullet type schedules. This shows an increase in higher-risk investments compared to their previous projects.

EstateGuru presents investors with extensive information regarding each project and the borrower.

This includes:

• A general overview of the project
• Loan terms, including the Loan to Value (LTV) rate
• Collateral information
• A description of the commercial market of the respective country
• Borrower information and any previous projects

The project pages provide images of the development, and in some cases, renders of the proposed finished product.

Another great feature is that the address and map for each project are listed on the right-hand side of each project page. This is coupled with an appraisal report.

You will notice that certain projects have an added 1% bonus to their annual interests. This means that the borrower adds this bonus for any investments of €10,000 or more.

With no fees for investors, it is encouraged to diversify your portfolio as much as possible to mitigate risk and maximize returns.

How Secure are These Investments?

EstateGuru employs a business model that places a high priority on security, a conservative approach to risk, liquidity, a focus on short-term loans, and the fact that the real estate market is most likely to suffer less than other industries in this crisis.

Over 90% of the loans offered on EstateGuru’s platform are secured with a first rank mortgage. This means that, in the rare cases where loans go into default, investors are offered great protection against loss of capital.

As an additional layer of security, the average Loan to Value (LTV) level on the platform is below 60%. This buffer means that even a significant drop in real estate values will not impact investors’ capital or the ability to recover principal loan amounts in the case of defaults.

EstateGuru have always been very conservative in terms of risk. They emphasize the fact that they thoroughly analyze every project (borrower, collateral, business plan) no matter how small the loan amount.

Real estate, by its very nature, makes valuation easy and offers a level of predictability that other markets in the P2P industry cannot match. Sending an independent evaluator with local knowledge to a property to determine the viability of the application offers great transparency when EstateGuru determines LTV rates. In addition, they always double-check using Automatic Valuation Models.

EstateGuru’s LTV rates are calculated on the current value of the property, never the projected future value.

As we are seeing, many of the P2P platforms that are struggling generally act as middlemen between investors and loan originators. This adds a murky third layer to the entire exercise and it can be very hard for investors to know exactly who they are funding.

As the P2P market has grown to become a widespread asset class with a proliferation of platforms vying for investments, the number of companies offering this service has grown exponentially.

Despite all this, EstateGuru has shown clear signs of mismanagement as many of their loans have not been recovered.

🕵️ Transparency

EstateGuru’s CEO and co-founder Marek Pärtel has been involved in the real estate industry since 2002. He is joined by Kristjan-Thor Vähi, who currently acts as a passive co-founder within the platform. Pärtel is also the co-founder of Invego – a property development group, of which Vähi is the Managing Partner.

EstateGuru promotes transparency throughout its website, with statistics and annual reports easily found in their footer section. EstateGuru was very responsive to any questions relating to the people behind the platform, a very good sign for any platform.

The team members behind the platform are all listed, together with their LinkedIn profiles and email addresses. The EstateGuru team consists of finance, banking, IT and real estate experts. Whenever Marek publishes posts on the company’s blog he writes in flawless English and communicates his ideas very clearly. As an investor, I really appreciate having someone like him at the helm of a platform I’m putting my trust in.

🙋 FAQs

Who can invest in EstateGuru?

Any individual above 18 years of age who has a bank account in any of the EEA member states or Switzerland can invest on the platform.

What is the average LTV?

EstateGuru guarantees an average LTV (Loan to Value) of 60% (max 75%). The LTV is the ratio between real estate value and real estate debt. A property valued at €100,000 with a loan amount of €70,000 results in an LTV ratio of 70%. EstateGuru’s maximum lending rate is 75% and on average it is even lower at around 60%.

What is the project investment period?

Investment periods (the period in which the loan will be repaid) and loan terms for EstateGuru’s selection of real estate projects varies between six months and two years.

What is the difference between a development, bridge, and business loan?

A development loan is a loan used to finance the construction or planning process of a project.

A bridge loan is a short-term loan used until permanent financing is secured, or current obligations met. It provides immediate cash flow required to achieve a specific target, such as enhancing the value of the property or selling the underlying asset.

A business loan is a loan used to cover day-to-day expenses of the firm, acquisition of goods or equipment, business expansion, pending obligations, etc.

All EstateGuru’s loans are secured with a mortgage, regardless of type.

Does EstateGuru have an Auto Invest feature?

Yes, EstateGuru provides an Auto Invest feature starting from €50, with advanced settings available from €250.

Does EstateGuru have a secondary market?

Yes, EstateGuru’s secondary market can be used as a liquidity facility.

Can I invest through my mobile phone?

Although EstateGuru does not have a specifically designed App, the website works well on all devices, so you can keep track of your investments on the go.

Will I be notified of any deal alerts?

EstateGuru allows users to dictate the amount of information being sent through notifications to make the most out of deals on the platform. You can opt for notifications regarding every single investment opportunity that comes up, or take a broader approach with updates at regular intervals. It’s all up to you.

Conclusion

Given the significant challenges that EstateGuru has faced over the past year, potential investors should exercise caution and conduct thorough due diligence before investing. The high default rates, combined with increased fees and prolonged recovery timelines, have made EstateGuru a much riskier platform than it was in its earlier years. Existing investors are advised to closely monitor their portfolios, stay informed about the platform’s ongoing recovery efforts, and carefully evaluate whether the risk-reward profile still aligns with their investment goals.

While EstateGuru is attempting to address its current difficulties through enhanced due diligence and management restructuring, it remains to be seen whether these changes will be effective. For now, the platform may no longer be suitable for conservative investors seeking stable, passive income. Instead, it may appeal to those who are willing to take on substantial risk in the hope of benefiting from potential future improvements in the platform’s performance.

Alternative real estate platforms that you can try instead are Raizers in France, StockCrowdIN and Brickstarter in Spain, and CrowdProperty in the UK, thus obtaining a well-diversified property portfolio.