If you’re looking to invest in French, Belgian and Swiss real estate, you can take a look at Raizers.

The French market is one that has been in constant growth for the past decade, so it’s quite a solid market.

While Raizers also operates in Belgium and Switzerland, there is currently more demand in French for borrowing. This is mostly due to the fact that real estate development deals are structured in France versus Switzerland. Nevertheless, we should be seeing opportunities in other countries too when the conditions are right. So if your aim is to geographically diversify your real estate investments, you should still consider Raizers.

I interviewed the CEO of Raizers, Maxime Pallain, on my podcast Mastermind.fm. There are a lot of gold nuggets about real estate crowdfunding in general, so I highly suggest listening to that episode if you’re interested in this space or Raizers in particular.

Raizers’ Founding Story

Associated in the creation of a first company in 2012, Maxime Pallain and Grégoire Linder encountered difficulties in finding financing. After five refusals from banks, the sixth agreed to finance this company which has moreover become a success.

Following this experience, the two founders wanted to respond to this difficulty of access to financing by launching a platform that could remedy this difficulty of finding equity capital. This is how Raizers was born in 2014, bringing together companies and investors, allowing individuals as well as professionals to lend to real estate developers, thus providing access to investment opportunities previously limited to institutional investors.

A little later, in 2018, Raizers specialized 100% in financing real estate developers and property traders.

Since its accreditation in France by the AMF (Autorité des Marchés Financiers), Raizers has opened offices in Switzerland, Belgium and Luxembourg.

Today, Raizers registers more than 90 million euros invested with an average return of 10% and a default rate remaining at 0%, on more than 140 transactions.

Investment Opportunities

The vast majority of investment opportunities are in France, so we can say that this country is the current focus of Raizers. There have been other opportunities in Switzerland and Belgium, as well as Martinique and Guadalupe.

Raizers, on the one hand, provides the web platform and attracts investors, while on the other end establishes good contacts in the markets it operates in to find property developers and property projects that the team believes offer a good return at a minimal level of risk.

The minimum investment amount is €1,000. While others have criticized this limitation and see it as a con for this platform, I think it is a low enough limit. It simply does not make sense for investors to invest less than €1,000 in anything in my opinion. Many of the investors who do invest lower amounts tend to be less financially savvy and should be spending their time amassing a bigger investment pot through side hustles, their main job, or entrepreneurship. When they have sufficient funds they can look at setting aside part of that for investing. I’ve written more about this topic in my post about whether you should invest in P2P lending, and in my other post about FIRE.

The average length for investments is 20 months and the preferred vehicle for investments is short-term bonds. There have been no defaults so far in the five years that Raizers has been in operation.

Taxes

Raizers does not withhold any taxes for you. You can read more about taxation of P2P lending in my post on the subject.

Support

Phone and live chat support are available in English and French, and I found the support staff to be professional and helpful. No problems whatsoever.

Secondary Market

Raizers does not currently provide a secondary market, which is a disadvantage compared to other platforms that offer the ability to liquidate investments early should the need arise.

On the other hand, you probably don’t need a secondary market for investments that are less than two years anyway. When investing in such platforms you should only invest money that you won’t need in a few months.

I have also confirmed with Raizers, that in the eventuality that an investor wants to sell his investments to another investor of his choice, Raizers will have no problem in changing the contract to assign ownership of the investment to the new investor.

Partnership with Capitalium

Recently, Raizers launched with Capitalium, a Swiss-based asset manager and family office, a partnership investment fund to co-invest alongside the crowdfunders in real estate transactions funded on the platform.

The two companies are stepping up their development in a market acknowledging a strong growth in demand, +102% in 2019, demonstrating their ability to innovate for the benefit of their clients.

This partnership seeks to combine the best of both worlds, the one of traditional but innovative finance, seeking alternative and responsible investment opportunities, and the world of fintechs, which brings transparency and simplicity to investor and entrepreneur clients.

Final Thoughts

Alternatives to consider include Raizers, Reinvest24 and Rendity. Check out all the real estate crowdfunding platforms I’ve used in my dedicated post on the best European real estate crowdfunding platforms.

If it’s the French market you’re targeting, then I can say I haven’t come across a better option thus far. Most of the platforms are only available to French investors, either legally or de facto by only providing the website in the French language.

Raizers, on the other hand, is clearly focused on the international investor community, which is a big plus for those of us whose French is non-existent or shaky at best. You don’t want to be taking investment decisions when you don’t properly understand the project descriptions, financial documentation and contracts you’re signing.

Raizers has a team of 10 motivated employees and, despite the corona crisis, and considering the crowdfunding constant growth in demand, are seeing a steady growth in their business.

I am monitoring this platform and will be updating this post as the months go by, but in the meantime, please feel free to leave your comments below if you have already used this platform yourself.

Join Raizers

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.

[Read more…]

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 hello@rendity.com. 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
4. Reinvest24

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?