Recently I had the pleasure of interviewing the CEO of Brickstarter on my podcast Mastermind.fm. Brickstarter is a crowdfunding platform based in Estonia and it currently focuses on Spanish vacation rental properties. These properties are available on Airbnb, so the idea is that instead of buying one property and managing it to obtain returns on Airbnb, you as an ainvesttor are able to put up the money on Brickstarter and reap the benefits of diversification, Brickstarter’s data analysis advantage as well as their economies of scale in managing the apartments.

What intrigued me about Brickstarter when talking to their CEO, was the data-heavy approach they have taken. These are not a bunch of guys that are in this for a quick buck and relying on their experience to make the choices for apartments to invest in. All the decision process is based on hard facts and data analysis based on Airbnb’s data about hot location, apartment types, prices, amenities etc.

This is very attractive to me as an investor, as in many areas of life I prefer to rely on hard facts and data rather than the whims of some person or team of people. Of course, the team is important, and Brickstarter does not disappoint in this regard, as the people behind this platform have a great track record within the finance and real estate industries. However, they themselves prefer to put most of the weight in the decision process on data analysis.

Brickstarter have stated that their goal is to become the safest investment platform. This is why they decided to be focused on real estate assets and mezzanine loans, where you have 2 sources of profit: rental yield and capital appreciation when the apartment is sold.

Let’s take a deeper look at how this all works.

Opening an Account on Brickstarter

Brickstarter is available to investors worldwide, and opening an account is simple enough. Once you’ve logged in and transferred the money (using Lemonway, an extra layer of security for the investor), you are able to choose from the available investments and go ahead and invest. The minimum investment is just €50.

Coronavirus Effects and Coliving

Sadly, Coronavirus is hitting Europe and forcing millions of people around the world to be in quarantine, and this has dealt a severe blow to the vacation rental market.

There is uncertainty in the economy as we are seeing the stock markets and other alternative investments collapse (Bitcoin, Oil, Forex…).

Brickstarter has not been lying on its laurels, however. The plan B investigation has started and Brickstarter has been studying other verticals. In particular, they have several co-living opportunities on the table that they are studying with their partners.

Coliving assets are a great business and the Brickstarter team is confident that they will be the next real estate revolution the same way vacation rental properties did in the past.

Brickstater wants to help you invest in the best coliving opportunities out there, and they are therefore working on becoming the 1st real estate crowdlending platform focused on coliving.

How Brickstarter Investments Work

Real estate investment has always been a safe haven during times of financial stress. In this scenario of uncertainty, with close-to-zero interest rates, and not knowing the real impact of this crisis on the different industries, investors will probably focus again on real estate. Brickstarter have a strong product, since they choose apartments in the best city centers with a high rental yield.

The way you invest in apartments on Brickstarter is through mezzanine loans. All investment opportunities are debt-free. This means that the opportunities don’t have any debt commitments and therefore are risk-free. The capital of your investment is secure, so the only risk is not achieving the forecast yield, but investors won’t lose the original invested capital.

How do investors profit? Here’s the simple calculation:

Total yield = rental yield + capital yield.

Your yield in the sum of the monthly interest you get from renting the apartment and the capital appreciation of the property when its sold.

Brickstarter is focused on vacation rental properties as it has many benefits in comparison to traditional rentals: higher yields, prepaid model, insurance by the main platforms (Airbnb, booking.com) and short-term rentals.

It also means that the impact of the coronavirus is going to be limited in time. Defaults on traditional rentals are more difficult to deal with, and we already know that this crisis is going to affect also traditional rentals.

So in the current scenario of uncertainty and bearish markets caused by COVID-19, having invested in real estate with Brickstarter is probably one of your safest investments.

Conclusion

The Spanish real estate market is notoriously difficult to invest in due to the bureaucracy involved. Even crowdfunding platforms are hard to sign up to for international investors, as they are typically only available in Spanish and require investors to register for a NIE number in Spain before being able to invest.

Therefore by being based in Estonia Brickstarter has removed a lot of these problems for investors, which is a very positive thing. On the other hand, the team that runs the platform and negotiates the apartments is all Spanish and based in Spain, so you get the best of both worlds.

As I described earlier, you profit from your investments in two ways with Brickstarter. On one hand, you will receive monthly benefits from renting the apartment to tourists and, when the property is sold, you will be able to receive the surplus of your investment. Using Big Data analysis, Brickstarter also estimate the best selling time. It is also able to determine the next hot spots in Spain and enter while the prices for buying are still relatively low.

Based on what I’ve seen so far and having spoken to the team behind Brickstarter, I would not have any reservations about recommending Brickstarter.

Invest with Brickstarter

Property Partner is arguably one of the better-known real estate crowdfunding platforms in the UK. The platform was founded in 2014 and gives you the opportunity to enter the UK property arena with an investment of just £1,000.

With property prices – at least in the case of London, much heftier than much of mainland Europe, this is ideal for those of you that want to gain exposure to UK real estate without breaking the bank. London is also where the super-rich all clamor to by some real estate, and I would argue it’s the most prestigious real estate market in Europe.

In this review, I look at the Property Partner platform from top to bottom. This includes an in-depth overview of how the platform works, the types of property you can invest in, how much you should expect to make, and what risks you need to consider before parting with your funds.

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If you’re looking to gain exposure to the real estate space – but you don’t quite have the means to go through the traditional channels, it might be worth considering a crowdfunding alternative. One such example is that of Rendity. The platform allows you to access the (primarily) Austrian real estate arena with an 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.

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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.

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