Jean Galea

Health, Wealth & Happiness

Why You Should Consider Investing in Baltic Real Estate through ReInvest24

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European real estate investment in Baltics through ReInvest24

Real Estate always was and will be a valuable asset, that is why property investments are considered by shrewd investors to be the most secure way of investing. Real Estate investments have high requirements for legal paperwork and steep entrance fees, but property crowd investing platforms like Reinvest24 are changing this.

Rental properties but investors will also benefit from capital appreciation.

This platform specializes in Baltic real estate, and therefore we need to focus on the economic outlook of this region before we talk about investing there. The hottest cities in the Baltics at the moment Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania). Reinvest24 has a special focus on Tallinn at the moment, so let’s talk about some of the reasons why this is so.

The average salary in Tallinn has almost tripled in the past twelve years and that’s a great indicator for the purchasing power of the local population and consequently the demand for quality real estate. A lot of people are moving to Talinn from the countryside and other countries because of the growing market in the city.

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Best UK Real Estate Crowdfunding Platforms in 2023

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The United Kingdom is one of the most economically advanced and stable countries in Europe, with a strong legal system and one of the most important capital cities in the world. This and many other factors make it an ideal location for real estate investment.

In a separate article, I’ve listed the best European-wide real estate crowdfunding platforms, but in this article, I’ll only talk about UK platforms.

The best UK real estate platforms are Property Partner and CrowdProperty. No other competitor comes close to these two platforms. I’ve invested in both and they are very professional.

I believe that property should form a part of everyone’s investment portfolio, which is why I have made it an important part of my investment strategy over the past few years. By investing in a variety of properties instead of one, you can diversify your portfolio, reduce your level of risk and increase your returns over time.

Between 1997 and 2016, UK property prices have grown by 11.65% per year on average. This is compared to the FTSE All-Share index which has delivered 3.03% p.a. on average over the last 20 years to the end of 2016.

Even after Brexit, the UK remains a good place to invest in real estate:

  • 250,000: The number of properties that need to be built each year in the UK to meet demand
  • 170,000: The average number of properties being built each year – 32% behind target
  • 80,000: The current shortfall of housing each year

While most people only think of London when it comes to investing in the UK property market, good investment goes further than just where the city is, it also comes down to the area the development is located in. The more popular the area is to live in, the more demand there will be from potential tenants.

Markers of a good location:

  • A population that outweighs the supply of housing
  • Potential for future capital appreciation
  • A young population
  • Migration of big business
  • Previous institutional investment

With that said, let’s take a closer look at my favorite platforms.

Property Partner

Property Partner offers us, investors, the opportunity to invest in properties directly or else into development loan bonds (recently introduced). A company is created for each property purchased, and investors buy shares in that company.

Most of the properties are geared. Property Partner only lists properties at 50-60% loan-to-value (LTV) of the purchase price. They buy multiple units at a discount compared to purchasing the units individually –adding further downside protection. Reducing risk further, they only gear multiple-unit properties as these have a more stable rental income stream to service the mortgage.

Read more: My review of Property Partner

You can manually choose which investment opportunities you want to pursue, or else select one of the three investment plans and have the platform auto-invest for you.

  • Income plan (6.5%+)
  • Balanced plan (7.5%+)
  • Growth plan (8.5%+)

The investment plans are ideal for those who have an amount less than €50,000 to invest, because at those levels it doesn’t make sense to spend a lot of time researching each opportunity and making manual investments.

The fees relate to services that Property Partner provides:

  1. Sourcing and performing due diligence on investment-grade property deals, often with significant discounts, by an in-house team of property professionals and analysts.
  2. Ensuring that properties are let, managed and maintained to a high standard, and distributing monthly or quarterly dividends to investors.
  3. Delivering an end-to-end managed investment, including sourcing and arranging mortgages, corporate structuring through SPVs, financial statement preparation, corporate tax compliance, and adhering to regulatory requirements.
  4. Providing a technology platform that facilitates online investment management and reporting, on an FCA-regulated trading exchange allowing investors to trade their investments 24 hours a day, 365 days a year.

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🏘️ Analysis of the Real Estate Market in Barcelona in 2020

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Note: Due to COVID-19 all bets are off and we will probably see a significant effect on the real estate market, with the most likely and immediate effect being a reduction in prices for properties on the market of around 8-10%. The effect could last around 2 years if the economy shows a steady recovery, and more if there is a catastrophic effect on the local or world economy.

Click here for the latest official stats

Let’s have a look at some general trends in the real estate market in Barcelona for 2020. This market is very much influenced by foreign investors, so there tends to be more activity and somewhat different prices than surrounding areas that are not much in demand by foreigners.

Rental prices have already reached the top or are already at a level where the potential growth is very low. The prices are far away from the prices of large European cities, but their limit is closely related to salaries (much lower in Barcelona) and these have a limited growth for now.

We still have the problem with Energy Efficiency Certificates not being provided by the owners or showing “in process” perpetually. There needs to be better enforcement from the authorities on this.

While rentals have generally stabilized, the sales market is very active with the highest volume in the last 5 years.

The fastest-selling properties tend to be priced in the €400,000 range.

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Should I Buy or Rent a Garage / Parking Space for My Car?

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I will shortly be needing a parking space/garage as I plan to buy a car in the near future. I therefore started looking at some prices for buying spaces and renting them out.

The going rate where I live is 18,000€ for a parking space in a communal roofed garage. I expect the value to appreciate steadily over time, although not at the same rate as an apartment in the same area.

I could also rent a parking space right in front of our apartment for 120€ per month.

The question is, therefore, whether it’s best for me to buy the space or rent it. Whenever it makes sense, I like to rent instead of buy. I think that buying stuff ultimately adds worry and financial burdens to one’s life, so you need to be careful with what you buy. This article perfectly illustrates the concept I’m talking about.

Since I’m not sure whether I’m going to be living in this area next year and I like to be free to move from one area to another in a city, or even to other cities in Spain or just moving to another country, freedom is very important to me and buying property is a restriction on that freedom. Moreover, the area where I live might not be the best place to invest in, so having the freedom to invest anywhere in the world is much better than forcing yourself to “invest” in property right where you live.

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🏠 Best European Real Estate Crowdfunding Platforms in 2023

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real estate crowdfunding europe

Real estate crowdfunding is one of the easiest ways to invest in property and one of my favorite forms of investment together with P2P lending.

Until recent years, the only options to enter the real estate market were to either buy property directly or to invest in a REIT.

Now, we have real estate crowdfunding sites, which are somewhat between those two forms of investment. If you want to learn more about the differences between these types of investments in the property market, check out my article on REITs vs Crowdfunding VS Private Investing.

Here’s a quick list of my favorite European real estate crowdfunding platforms:

  1. Rendity – top platform – my Rendity review
  2. Reinvest24 – the highest interest rates – my Reinvest24 review
  3. EstateGuru – the biggest platform – my EstateGuru review
  4. Property Partner – best UK platform – my Property Partner review
  5. Bulkestate – Baltic and Scandinavian real estate – my Bulkestate review
  6. Raizers – best for French real estate – my Raizers review

How Real Estate Crowdfunding Works

So let’s explore what real estate crowdfunding entails.

There are three basic ways of buying a stake in a real estate crowdfunded property: secured loans, unsecured loans, and equity investment.

Here is a short recap of what each of these means for the investor:

  • Secured loan (senior debt) – collateral is offered to secure the loan. The collateral can be real estate or some other asset, including a personal guarantee. With this type of loan the investor is the first in line to receive their payout, and in case of any problems the collateral can be sold to minimize losses. However, the existence of collateral means that the risk (and therefore the yield) is lower and one should definitely investigate the asset that is offered as collateral.
  • Unsecured loan (mezzanine loan) – while mortgage holders are usually first in line to receive payments, an unsecured loan means exactly that. It is not secured by collateral. This means that the interest rate offered should be higher than for a loan that is secured. If the project is unsuccessful, there are no assets to sell to recover any funds (i.e small loans). In this case, one should pay a lot of attention to whom they are loaning their funds in and how well the platform is equipped to handle problematic customers.
  • Equity investment – with this type of investment one should note the structure of liabilities – the company will pay debts to employees and creditors first and only then investors may receive their payments from the remaining assets of the company. In case of failure, there is a real possibility that the earnings of the investor are reduced to a 0. When the project succeeds, however, employees and creditors usually receive a fixed interest rate while the equity investor earns more. So, in this case, one should make sure that they assess the probability of failure. Is the project understandable? Are the numbers presented in the project realistic?

As a rule of thumb, it is good for an investor to remember – the lower the risk of the project, the lower the expected yield. And if you are considering investing in real estate that offers a 20%+ yield per annum, be sure to be very critical about the contents of the project before investing. Most likely it is not a secured project meaning a significantly higher risk level for the investor.

So, be sure not to look at just the yield but rather the investment. It is important to always know what you are investing in, who you are trusting your money with and to be realistic in terms of expectations.

My Experience with Real Estate Crowdfunding

Before we talk about my favorite real estate crowdfunding sites, let me remind you that I’ve been investing in real estate through online platforms since 2015, and I’ve used many platforms targeting various geographical regions.

On average, my returns have been around 5-7% per year.

The Spanish investments have been my biggest disappointment, largely due to either the incompetence of the platform team or the horrible government legislative changes.

Investments in the UK have also not provided me with much joy, but apart from the Lendy scam, the other platforms have been quite well managed and the big issue with property in the UK has been the Brexit event which was quite unexpected and threw everything off the rails.

On the other hand, the Baltics have provided some excellent returns, and this is what I consider to be the hottest real estate market in Europe at the moment. The German and Austrian markets have also provided me with stable returns – these are mature markets and the platforms in these countries tend to be run by serious and ethical people.

Investing in real estate online can be a daunting prospect to many new investors, as they might not be used to mixing an offline asset like property, with the technology and intangibility of the internet. And that is why I’d like to guide you towards what I feel are the best and most trustworthy platforms.

See also: How to evaluate private real estate investments

Keep in mind that within each platform there are different modalities of real estate investments. I’ve written briefly about these in my article about risk vs yield in real estate investment.

I would love to also invest in the US via top platforms like Fundrise and RealtyMogul, however, unfortunately, these platforms are not open to European residents. Nevertheless, here are the best European alternatives and top platforms.

1. Rendity – best overall platform

Rendity

Rendity is one of the few platforms focused on the German and Austrian real estate markets that also cater to international investors.

The vast majority of deals are situated in Austria. There are also a number of opportunities in Germany, too.

In these turbulent times, I appreciate the opportunity to invest in solid markets such as Germany and Austria.

In terms of statistics to date, Rendity notes that it has successfully completed 63 funded projects, which translates into €34 million in invested capital. The average annualized return thus far amounts to 6.10%.

This is a very solid platform with a good team behind it, and investors have been very happy with the results so far.

You can read my full review of Rendity to learn more about this platform and decide whether it’s the right choice for you.

Visit Rendity

2. Reinvest24 – for the best interest rates

After having invested in this platform early in 2019 and speaking with Tanel Orro (CEO of Reinvest24) on my podcast I can safely say that it’s one of my favorite real estate platforms. I like their approach of being cautious and very transparent with their investors.

Whereas other platforms publish risky loans indiscriminately at times, Reinvest24 are focused on projects that return interest over their lifetime. Their idea is to obtain real estate at very good prices, do some great refurbishing and then rent it out for some sweet monthly returns.

I would especially recommend such a platform to someone who wants to build a monthly passive income stream that can fully or partially sustain one’s lifestyle, which is what has popularly come to be known as financial independence, and closely linked to the FIRE (Financial Independence, Retire Early) movement.

All the projects I have invested on with Reinvest24 have exited successfully, and I look forward to continuing to invest on this platform. Moreover, they have kept their promise of launching the secondary market in 2020, thus increasing liquidity options for existing investors.

While Reinvest24 started off focusing on Estonian projects, they have now started to expand beyond, offering projects also from Latvia, Moldova and Spain.

Their interest rates are pretty fantastic, with plenty of projects offering rates of around 15% and just 6 months duration, so you won’t be tying up your money for a long time.

Visit Reinvest24.com

3. EstateGuru – the biggest platform

EstateGuru provides investors with the chance to invest in real-estate loans. The projects usually yield a bit more than 10% and are on average a year long.

Apart from pure real estate development loans for new projects, they also put up the following types of loans on the platform:

  • business loans
  • bridge loans
  • reconstruction loans

Most loans return interest on a monthly basis, although some have other arrangements. The main market for EstateGuru is Estonia, however, I have also seen loans from Latvia, Lithuania, Finland, Spain and Portugal. I expect them to keep diversifying geographically as they grow over the next few years.

I’ve had the pleasure of interviewing their COO Mihkel Stamm on Mastermind.fm, so do check out that episode if you want to learn more about the platform.

I have also written an extensive review of EstateGuru on this blog, where I provide you with all the details about how investing with this platform works and what results you can expect.

Invest with EstateGuru

4. Property Partner – the best UK platform

This is the top UK real estate platform in my opinion. They’re very well organized and professional in their analysis of each investment opportunity, which enables me to make informed decisions about my investments.

I’ve written an in-depth Property Partner review where I explain how this platform works. I’ve been very happy with how I’ve been treated as an investor. I think of this platform as one of the bedrocks in my real estate investment strategy.

I’ve been investing in UK real estate for several years through this platform, and even though Brexit was a tough blow, I have high hopes for future returns as the UK will never lose its appeal for international investors and expats.

Sign up at Property Partner

5. Bulkestate

The Bulkestate platform, as the name implies, enables real estate investment project crowdfunding and apartment bulk-deals for a price lower than the market value.

Bulkestate concentrates on Latvian real estate, and you can learn all about why they made this choice in my interview with the founder and CEO of this platform, Igor Puntuss, on Mastermind.fm.

You can also read my Bulkestate review for more information about this platform. Average returns are over 14% per year which is very good. You can invest in property development loans or engage in group buying of apartments, which is perhaps a unique feature of this platform and one to keep an eye out for in the coming months.

Invest at Bulkestate

6. Raizers

raizers

Raizers is the platform of choice if you want to invest in French real estate. It’s a platform that has been operating for 5 years with zero defaults. Go ahead and read my Raizers review if you’re looking for investing options in France specifically.

I’ve had the pleasure of discussing Raizers and the French real estate market with Raizers co-founder Maxime Pallain on my podcast, check out that episode if you want to learn more about Raizers. I found Maxime to be very open and knowledgeable and I have no problem trusting this platform based on their track record and solid team.

Invest with Raizers

As I mentioned earlier, I believe that the Baltics together with Germany and Austria offer the best opportunities at the moment.

However, the real estate market is in constant flux due to the numerous factors that affect it, and you, therefore, need to do your homework properly before deciding on an investment. For example, the duration of the investment can be the main differentiating factor between a successful investment and a disastrous one. Some markets offer time-limited but very lucrative investment windows, while other markets have certain properties that make them really stable and thus ideal for long term investments, perhaps at lower rates of return.

I also recommend that you check out my article about the taxation of P2P and real estate platforms in Spain. Although I wrote that article with Spanish residents in mind, the same concepts apply to most other countries in Europe.

Do you know of any other platforms that I have not mentioned? Let me know in the comments section.

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Jean Galea

Investor | Dad | Global Citizen | Athlete