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Investire nel crowdfunding immobiliare online: ecco come e perché

Tempo di lettura: 2 minuti

Una domanda frequente che si pone chi si avvicina al crowdfunding immobiliare per la prima volta è “Come posso iniziare ad investire in crowdfunding?”. Un blogpost è certamente il modo migliore per rispondere a questa domanda, dando anche qualche utile consiglio.

Internet sta trasformando il mercato immobiliare, dando nuove opportunità a coloro che vogliono investire in immobili una parte del proprio capitale. Il crowdfunding immobiliare online è uno strumento in costante evoluzione le cui potenzialità se sfruttate al meglio possono garantire ottimi risultati. Va però utilizzato con consapevolezza.

Le opportunità offerte dal crowdfunding immobiliare online

Prima di iniziare ad investire in crowdfunding immobiliare, l’investitore deve “settare” le proprie aspettative di guadagno in maniera chiara ed essere consapevole dei rischi che l’investimento comporta. Il crowdfunding immobiliare online offre la possibilità di costruire un portfolio di investimenti basato sia sulla rivalutazione del capitale che sulla generazione di flussi di cassa positivi. La strategia più comune è quella di combinare entrambi i tipi di investimento così da bilanciare i rischi e ricavare ottimi ritorni.

La scelta dell’investimento e il calcolo dei rischi

L’investitore deve sempre valutare qual è il rapporto tra il livello di rischio e i potenziali guadagni del progetto scelto. Un alto ritorno sull’investimento potrebbe comportare l’esposizione a un elevato grado di rischio.

È importante essere realisti riguardo alle proprie aspettative di guadagno. Le opportunità di investimento di breve periodo (dai 6 mesi ai 2 anni) propongono un ritorno annuale che può arrivare anche al 10 / 12%.

I consigli per investire nel Crowdfunding immobiliare

Crowdestate è una delle prime piattaforme attive in Europa. Dal 2014 ad oggi, ha promosso oltre 110 opportunità di investimento, raccogliendo più di 50M di Euro e restituendo oltre 25M di Euro agli investitori. Sulla base di questa esperienza, è possibile stabilire delle linee guida per avvicinarsi al crowdfunding immobiliare ed utilizzarlo in maniera mirata, minimizzando i rischi e massimizzando le possibilità di guadagno.

Il crowdfunding può funzionare come elemento bilanciatore, in aggiunta agli investimenti tradizionali (titoli azionari, obbligazioni, valute, ecc). E’ in grado di ridurre la volatilità del portafoglio mantenendo alti ritorni.
Ai  nuovi investitori suggeriamo di destinare agli investimenti in crowdfunding fino al 20% del loro portafoglio totale. Il crowdfunding rappresenta ancora uno strumento di investimento nuovo, per questo motivo nuove piattaforme e nuovi servizi nascono (e a volte spariscono) ad una velocità impressionante. Affidarsi allo storico dei risultati di una piattaforma rimane il modo migliore per garantire i propri investimenti.

Inoltre, è importante conoscere se stessi.

Preferisci avere un’entrata fissa mensile oppure investire in un progetto che si apprezzerà nel tempo, con maggiori risultati, ma che non saranno disponibili prima di 3-5 anni?

Se il tuo obiettivo è costruire piano di lungo periodo, potresti propendere per investire la maggior parte del tuo portafoglio in progetti di lungo periodo e lasciare solo una piccola parte agli investimenti di breve periodo. Allo stesso tempo, non dimenticare che i progetti di breve periodo ti permettono di avere guadagni più rapidi e così finanziare i tuoi investimenti a lungo raggio.

Se queste informazioni ti sono state d’aiuto, scopri le nuove opportunità di investimento disponibili.

Is it better to invest a large sum of money all at once, or make steady smaller investments over time?

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Exactly ten years have passed from the last financial crisis. Even though the crisis’s exact beginning is debatable, a turning point was definitely in September 2008 when Lehman Brothers, the fourth-largest investment bank in USA, filed for bankruptcy. Just one year before that, credit markets had been at an all-time high, while half a year after the bankruptcy, in March 2009, they had fallen to their lowest. Crowdfunding was a fresh approach in 2008 and credit markets had been actively operating for over 100 years – which leads us searching for answers to the title question from credit markets.

We have reached 2018. The ETF SPY, which tracks the 500 biggest companies in the US, had reached around 155 dollars by the market high-point and decreased to around 80 dollars during the fall, but today, it is traded at 265 dollars. Let us imagine purchasing shares in 2007 with the high-point price of 155 dollars. How would we react if we saw prices steadily falling on credit markets? Would we sell? With what price? What proportion? We might even feel faint because a constant decrease in prices could cause extreme unpleasantries, and we would even prefer not to follow the market. If we entered the market in the beginning of 2009, we might find ourselves at a completely different starting-point – we would have no personal relationship with market prices and trading would be somewhat smoother. Regardless, financial advisers in the US have said that in 2007, their phones were red and euphoric callers were asking information about all sorts of exciting companies, but in 2009, they were under the impression that they might as well terminate their contracts with phone companies, for market operators were scared to conclude any transactions. Trust in markets was persistently earned back and by the time investors came to the stock exchange, a new boom was already in full swing.

You might wonder, why does a crowdfunding marketplace write about credit markets on their blog? The truth is, we are not actually writing about credit markets so much as investing psychology. The behaviour of credit markets often represents the behaviour of investors.

Regardless of the preferred investment type, all investing is the same in a psychological sense: purchase when times are good, capitulate when times are hard. It should be exactly the opposite.

When investing a large sum of money, one must get it right twice: when making the investment and exiting the investment. But how could we, in January 2009, have known that in March, credit markets would hit the bottom? Or how could we know the market state in June 2019? It requires extraordinary perception (which most investors lack) to foresee such turns, and even then, one could easily be mistaken. We can achieve long-term success on markets, though, if we hit neither highs nor lows, but simply invest consistently.

Consistent investing enables us to overbear the need for market timing because we add investments to our portfolios in different phases of the economic cycle, so our portfolios do not depend on the actual state of one or few objects. When in 2014–2016, Crowdestate was mainly focused on equity projects related to intra-Estonian real estate development, then in 2018, we have taken the direction of financing companies. We concluded that risks have significantly increased in real estate development and while under appropriate conditions, real estate development is profitable at any stage of an economic cycle, access to such projects is more complicated than a few years ago. Financing companies have provided us with interesting opportunities and we have brought several projects to the market. A large proportion of those are recurring or phased, which is why crowdfunding has proven its ability to collaborate on projects that need larger sums of money.

Crowdestate has been able to constantly diversify the product portfolio and make sure that when investing a large sum of money, an investor’s portfolio would include objects of similar risk profile. Steady investments dissipate such risks, for even if the economy should suffer a fall, the market might open unexpected opportunities that could turn out to be a very profitable investment.

Don’t wait any longer to invest, and start investing with Crowdestate over HERE.

Crowdestate replies: Why we chose to verify accounts?

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In a few months, Crowdestate will be five years old and our investor community includes almost 24,000 international investors. We have managed to keep our sign-up processes short and simple, and we have based our current investor identification process on the information provided by investor himself as well as on the data collected during funds transfer transactions.

Since Monday, we are asking our investors to pass through an additional quick identity verification process, that takes just a few minutes and requires the use of any internet connected device equipped with a camera (laptop, tablet, smartphone etc). User portrait and documentation snapshots are taken during the process and those snapshots are used to verify the investor’s identity according to current legislative requirements.

The need for additional verification might raise questions like “Why do we need it?” and “Why do we need to implement it today?” – if we managed to cope with it before, why can’t we continue as before?

There are two major reasons for introducing our new investor identity verification process.

Need to be compliant with current and upcoming regulation.

While crowdfunding has been around for a while, it is still somewhat gray and unregulated area in most EU countries and the future rules are still work in progress. Several crowdfunding platforms (including Crowdestate) are operating segregated “client accounts” to keep track of their investor’s funds and to facilitate money transfers from and to investors, and such “client account” might be qualified and payment services and fall under the jurisdiction of current European Payment Services Directive (PSD2), which means the crowdfunding platform’s payment services should be licensed by the Financial Supervision Authority. While the Payment Services Directive is a universal and unified law applicable across the European Union, different countries are interpreting its contents differently. For instance, Estonia has is considering the operations of “client account” to fall under the exemptions of the PSD2 directive and therefore not being subject to payment institution license. At the same time, the southern EU countries require a full payment institution license in case the crowdfunding platform is operating the “client account”.

Meanwhile, the first draft of pan-European crowdfunding regulation is circulating in the corridors of the European Parliament. According to the published draft regulation, all crowdfunding platforms are subject to financial regulation and licensing principles. The draft foresees the platforms operating a segregated client account to have an additional payment institution license.

Crowdestate is actively looking for opportunities to expand to new European countries and we have concluded, the even if our current business model and current regulation do not require to have a payment institution license, the licensing is inevitable in the near future. Therefore we have started the preparations to apply for a full payment institution license and as a part of that, we need to upgrade our anti-money-laundering and terrorism financing measures to be compliant with all current regulative acts. As a result of that, our processes and procedures will be very similar to the one that you are used to seeing in any European bank or financial institution today.

Need to ensure our compliance with other market players.

In most of our investments, Crowdestate’s investors are funding just a part of the total capital stack (usually equity or mezzanine capital) and a commercial bank takes the role of a senior lender. While in Estonia our current processes and procedures have been satisfying to our banking partners, the more south we move, the more questions we get on identity verification and anti-money laundering prevention themes. The potential senior lenders expect to receive an external confirmation that Crowdestate’s processes and procedures are fully compliant with anti-money laundering and terrorism funding prevention laws and the best verification is seen to be a license issued by Financial Supervision Authority.

Summary

While there is no hurry (yet) to implement the additional investor verification processes and procedures, it is in both our investors as well as Crowdestate’s best interests to implement them as soon as possible. Identity verification is a small and quick step taking just a few minutes of our investor’s time. All information collected during the verification process is fully confidential, used only for the specific verification purposes and is not being shared with any third party.

The verification of our investors’ identity ensures that our business activities are compliant with all current and future regulations, therefore ensuring transparency, security and long-term business continuity of Crowdestate’s business activities.

Thank you for being with us!

 

Learn more on how to verify your identity.

Crowdestate and Veriff: how to verify your identity

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Crowdstate now requires all investors to verify their identities to ensure security and prevent fraud.

Read more on why we chose to verify accounts HERE.

Currently, it’s not possible to create new investment accounts or use Autoinvest without verifying your identity. After 1 month you aren’t able to submit an investment application or transfer money to a bank account, so here’s a short instruction on how to do it straight away.

IMPORTANT:

  • Make sure your name under “My Profile” matches with your name on your document.
  • Google Chrome works the best.
  • You need to use a camera (web camera on your laptop or comuper, phone camera or camera on your tablet.)

If you don’t have an investment account

Set up Google Authenticator OR confirm your phone number.

When you wish to invest or change your investment account details you don’t have to wait for the SMS code, you can just confirm your actions by using Google Authenticator. It’s especially handy while being abroad.

How to enable two-factor authentication?

  1. Install a Google Authenticator app on your Android or iOS device if you don’t already have one. If you need help getting started, please see Google’s Support Page.
  2. Open “Profile” and “Validation and contract signing method” in your Crowdestate account and scan the QR code with the Google Authenticator app.
  3. Enter the Two-factor authentication code provided by the Google Authenticator app

All set. Now proceed by following the steps shown below.

If you have an investment account

1. Go to your ‘Profile’ and look for ‘Identity verification’.

2. Agree with the terms and conditions and press on the blue ‘Veriff’ button.

After what you will be forwarded to Veriff’s page, where you need to select a document you’d like to use for verifying – ID card, passport or drivers license.

3. After pressing ‘Confirm’ you can see all the steps you need to follow to take a portrait and a document photo.

                       

4. In the end, you are able to see all the pictures you took, and if you wish you can retake them.

5. In case everything is OK, just press ‘Confirm’ and wait for the confirmation email.

              

When your identity has been verified, you can create an investment account or proceed with your current account.

Company’s investment account

Go to your investment account settings (‘Overview’ – ‘Settings’ – ‘Edit account settings’), add additional documents and wait for the confirmation email.

In case of questions or you need some help, write to us at info@crowdestate.eu and we’ll help you out.

Time to verify! 🙂

The expected rate of return and calculating XIRR

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What does the expected rate of return mean?

Cash flows received from crowdfunding projects can vary greatly – for example, proceeds from equity capital investments depend on the success of the implementation of the business plan. In the case of an apartment building in development, overly slow sales and increasing input prices may constitute a risk. The opposite may also occur: the input prices are stable, but the market situation allows selling apartments faster than expected despite increasing sales prices.

In the case of business loans with a set payment schedule, there is slightly more clarity, but possible days of late payment interest must be considered – they may both increase and decrease the rate of return. It all depends on whether the late payment interest rate is the same as the interest rate of the loan or differs from it.

In both cases, investors are interested in the expected rate of return because based on that, decisions can be made about investing capital. Crowdestate uses the XIRR function, known from spreadsheet programs, to calculate the expected rate of return. As sums received from the project may differ in size and frequency, the XIRR function calculates the internal rate of return for an irregular cash flow. Here is an example.

Let us assume that we invest 1,000 euros to an equity capital project on 6 January. The market is more active than expected, which is why the developer decides to make the first disbursement of 550 euros on 9 August and the last, also of 550 euros, on 3 September.

The rate of return calculated with the XIRR method is 16.53%, but in reality, we earned a 10% rate of return on the initial investment. Which number is correct?

Both calculations are correct, but they show different things. The return on investment (ROI) shows the amount of money we have earned compared to the initial investment. XIRR presumes that the investor has constant access to similar projects – in simpler terms, if the available capital can be reinvested into a project with a similar rate of return, the investor will earn 165.3 euros in interest income on 1,000 euros in one year. Therefore, XIRR considers both the time of receiving the money and the sizes of the sums, based on which, it finds an interest rate converted to an annual basis, by which the value of the investment increases. Therefore, XIRR is a discount rate that, when implemented, allows us to see the current value of all cash flows.

Loan interest and internal rate of return are different

In the case of projects with fixed interest rates, the assessment of the expected rate of return is generally quite precise. For example, in the finished L. Koidula 32 (II) project, the interest rate was 11%, but the actual rate of return was 11.05%. The Koidula project was unique due to its single disbursement, which minimized the difference between the interest rate and the actual rate of return.

When financing the operating capital of Global Nord Timber (III), the sponsor of the project asked investors for 400,000 euros for up to seven months. It was agreed that the sponsor would pay an interest of 15% from the principal amount of the loan. Monthly repayments would consist of 28,000 euros plus current accumulated interest. The last payment would be 260,000 euros plus interest. Assuming that all payments take place according to schedule, the rate of return of the project is 16.1% with the XIRR method. This is slightly higher than the agreed 15% interest rate because the XIRR method assumes we can reinvest the repaid money under the same conditions each month.

The expected rate of return on equity capital projects

In the case of equity capital projects, Crowdestate offers three possible scenarios: a negative scenario, a base scenario, and an optimistic scenario. With all three scenarios, the cash flows of the project are assessed from a conservative, probable, and optimistic viewpoint and the expected rate of return is calculated based on these assessments.

The expected rate of return is, therefore, a function of Crowdestate’s best assessment of possible proceeds.

Example of calculating XIRR

Here are some tips for if you wish to calculate the rate of return of your portfolio yourself using the XIRR method.

Insert the dates in the first column and the investment sums in the second. The picture below shows that investment sums can be positive or negative. The logic that is generally used states that when making an investment, we give away money, negatively affecting the amount of money we have. Therefore, these results are marked as negative. Incoming money (repayments of the principal amount, interests, and late payment interests) are marked as positive, because they increase the amount of money we have, positively affecting the sum.

In order to calculate the long-term XIRR of your portfolio, you will need to mark the current date and the current balance of the portfolio on the last line. As shown on the sample portfolio below, two investments have been made, due to which, four repayments have been made with 650 euros still to be received. If this sum were received on 17 September 2018, the internal rate of return of this portfolio would be 15.64%. However, every additional day causes the internal rate of return to decrease due to the time value of money – the euro of today is worth more than the euro of tomorrow.

In case you don’t have an account with Crowdestate yet, you can create it here.

Thank you for investing with us! 🙂

Should you invest as a private person or through a company?

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Writer: Ranno Tingas, partner, Ernst & Young Baltic AS (EY)

Picture: Ranno Tingas

This is a question that all investors ask themselves sooner or later. Ideally, it should already be decided when making an investment, but often, there is still time and a reason to think about it at a later stage. Fortunately, you can transfer your investment to a company later, but it needs to be done correctly.

The advantage of investing as a private person is its simplicity and the minimal bureaucracy involved. Therefore, new types of investment and investing platforms are at first often tried out as a private person. However, if volumes and revenues start growing, the question unfortunately arises eventually about whether investing as a private person is still sensible. This is because any interest income of a private person is immediately subject to taxation and, unfortunately, it is not possible to offset the gains and losses incurred by a crowdfunding platform. In addition, the deductibility of expenses is very limited for private persons and the risks are borne entirely by their assets. An important advantage that companies have is that income tax is paid only when distributing the profit and not when earning it. Thus, companies have obvious tax advantages, but also higher administration costs (time and money). With regard to the income tax rate, there is no difference in the taxation of interest income – the same tax rate applies to companies and private persons. In both cases, the income tax rate is 20%, but for private persons, it is calculated on the basis of gross income and for businesses, from net income (hence, the tax rate here is 20/80).

Investments can be transferred to your company as a sales transaction or non-monetary contribution. 

Generally, the sales transaction option is more reasonable, as it enables to receive tax-free money from the company in the extent of the selling price of the investment. The transfer of an investment to your company through a non-monetary contribution is more bureaucratic, but in this case, no money is being moved. A free transfer or donation of investments to your company is not reasonable for a number of reasons. As an investment made through crowdfunding is essentially a loan, then we are talking about transferring a debt claim from a private person to their company. The transfer of an investment must be properly documented for the accounting of the company and for taxation purposes so that it would later be clear what was going on and what transaction it was.

If the decision on the form of the transfer of investment is made, then the issue of the price arises next. The general tax principle is that transactions between the involved parties must take place in market prices. Therefore, it is necessary to figure out the market price of your investment. However, it can be difficult to determine this and an assessment will not be worthwhile in the case of smaller amounts. Therefore, taking a risk and using the offer price, nominal value, and residual value of the investment at the secondary market can be a useful benchmark. It must be considered that a profitable sale of investment to a company makes the private person liable for income tax. Caution should be taken with investments whose actual market value is lower than the nominal value because selling them to a company for a higher price than the market value (albeit for nominal value, for example) creates a tax risk for the company.

Although transferring investments to your company is a permissible transaction, caution should be exercised when transferring investments to a company at a nominal price (shortly) before the end of the investment period. The tax officer may interpret it as tax evasion – being motivated by the desire to avoid interest profits as a private person and directing the profits to a company instead. In judicial practice, such income received by the company is taxed as the personal profits of a private person in the worst-case scenario.

In conclusion, there is no simple formula to tell whether it is better to invest as a private person or through a company. However, in crowdfunding, it is more economical to use a business when dealing with larger investments. It is the individual duty of every investor to define the ‘larger investment’ that would outweigh the extra bureaucracy and additional costs.

Check our FAQ ‘Investment account’ section, where you can find answers to the following:

  • Moving investments from one investment account to another.
  • How to transfer money from one investment account to another?
  • Multiple investment accounts: private and business account.

In case you don’t have an account with Crowdestate yet, you can create it here.

Time to invest! 🙂

8 common mistakes investors make and how to avoid them

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Tip: You are able to read more about a specific topic by pressing on the blue parts of the text, which will lead to the articles, blog posts that give you more information.

 

Graystone investment group defines real estate investment as, “the purchase, ownership, management, rental and/or sale of the property for a profit.” It’s become a popular way to try and earn income in the last few decades, with the exception of the 2008 financial crisis period in the U.S.

Investing in real estate can be highly lucrative, but also highly risky. If you don’t know what you’re doing, or you aren’t careful, financial trouble is a real possibility. People have gone bankrupt from getting in over their heads on their investments and leaving themselves nowhere to turn.

To help you avoid that fate, we’ll go over eight common pitfalls of real estate investing, and how you can do your best to avoid them.

8 Common Real Estate Mistakes

Overspending on books, classes, and similar resources without using them.

By all means, educate yourself on the field of real estate investment if you have no formal background in it already. Learn the ins and out of the game, the smart ways to buy and sell, and the proper resources and channels you should go through when doing so. However, be as smart about your education as you hope to be about your investments. Buy what you need, then USE it. Don’t just buy a new book or course when you get bored with the one you have.

Jumping in without learning the basics.

This goes back to our first point: education is essential. You don’t want to spend more money on a property than you can make back, or get stuck with it in a bad market and have to pay the mortgage with money you might not have.

Not shopping around enough, OR waiting too long to buy.

You shouldn’t leap at the first property you see without comparing it to others in the area to make sure it’s as good of a deal as you think it is. Look around in different neighborhoods, assess markets and property values, and make sure people are renting there. On the flip side, don’t pass up something you know is a good deal because you’re always afraid that another, better one is around the corner.

Believing you have to be rich to invest in the real estate market.

While it does take some capital to purchase assets, you don’t have to be filthy rich to get started in the world of real estate. Often you can control a property by putting down a fraction of what it’s worth to secure it, then bring in additional income through rent to pay the mortgage and maintenance fees on the property. There are also several crowdfunding platforms you can use to invest in properties for a smaller amount of the total cost (Crowdestate for example).

 

Getting too attached to a property.

If your end goal is to resell or flip a property, it’s useful not to get too attached to it, or the tenants who you rent the property to because you’ll eventually have to leave them both behind for other investments.

Trying to buy off-market properties that aren’t up for sale.

According to the finance blog Bigger Pockets, there can be a benefit to buying an off-market property in a good area or an area that will see a lot of business soon. However, if a seller knows they’re sitting on valuable property and aren’t already motivated to sell, they may try to gouge you for a higher price than you’d usually pay. 

Thinking this will make you rich overnight.

There’s no such thing as an overnight success, and real estate investment is no exception. The best route is the patient one. Start small, learn, and grow your investment portfolio as your skills increase. 

Not taking the time to fully analyze a property before buying.

This is among the most serious mistakes would-be investors make, and it can literally ruin you financially. If you don’t have enough money to take on a property, or it doesn’t look like you’ll be able to sell or rent it, you should probably hold off on buying. Don’t rely on shortcuts; know the market you’re buying into inside and out. It’ll clue you into how well your property will perform. If you see an abundance of red flags, walk away.

 

 

Keep these things in mind, but remember that they’re only guidelines. Do your research, and make sure you’re thoroughly educated before you invest in a property. It isn’t something to be taken lightly, but done correctly, being a real estate investor can be lucrative.

And a lot of fun! 🙂

Invest in Italy with Crowdestate

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Based on the success in the Baltic area, we have brought Crowdestate to a new market: Italy. You have now the opportunity to invest in a market which is experiencing a perfect moment for real estate.

The sector is growing, especially in the main cities, such as Milan.

After suffering an important drop in terms of real estate values and a number of properties sold, during the economic crisis, with several years of a slow and decreasing economy, the Italian market is now presenting good positive indicators. Here some data from 2017:

  • 5.1% more residential properties sold than 2016 (5 years growth in a row).
  • Transactions value reached 11.2B€, which is higher than pre-crisis results (10.8B€ in 2007).
  • 15% more Italians say that they want to buy a residential property.
  • The commercial market increased 4.2% in terms of value, compared to 2016.
  • International investors have gathered over 5,8 billion euros in real-estate investment in the country; which is almost 60% more than the same period the previous year.

In 2018, the growth is still in place

  • Looking at the main forecasts, the number of properties sold during the year should increase between 2% and 4% compared to 2017.
  • After several years of depreciation, properties prices are going to increase, up to 2%.
  • Rental market (both traditional and short-term) is booming, especially in the main cities. The number of rental ads increase by 10.2% in 2017 and are still growing in the first half of 2018 (+2.9% yoy).
  • The price for renting a room in Italy has increased 4% last year. With a 9% increase compared to three years ago.

 

Focusing on the main cities

Currently, Milan is surely the safest and most growing market to invest in the country. It offers the best economic indicators, such as the highest demographic growth (+8.8%in the last 5 years), the employment rate (68.4%) and average salary (34.000€ per year).

Milan is the capital of Italian fashion and it’s one of the five shopping capitals of the world. It has the third largest exhibition center in the world, located on an area of 345,000 m2, hosting 51 events, and receiving more than 5 million visitors a year.

The city is also a big university hub, attracting students both from Italian cities and abroad. Politecnico of Milan and Bocconi University, two of the leading Italian universities, account for 20% of foreign students in Italy and host more than 60.000 students.

Property prices are currently at their minimum, representing a great moment to join the market. In 2017, there was a 6.9% increase in the number of total transactions. In parallel, rental prices are also experiencing continuous growth with a year-on-year increase of 5% in 2017.

How is Crowdestate entering the market?

Crowdestate is expanding its team and opening new offices. I, Niccolò Pravettoni joined the company this year and I am in charge of running activities in Italy. I have previous experiences working for top leading international companies such as Airbnb and Google, managing big impactful projects at a country level.
I have in-depth knowledge of the Italian real estate market, including expanding trends and patterns from estate auctions to short-term rentals. I’m now developing new relationships with local and experienced real estate developers in order to offer Crowdestate investors new and profitable ways to invest and diversify their portfolio.

So start investing in Italy with Crowdestate and diversify your portfolio! 🙂

Crowdfunding your way to financial freedom

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Tip: You are able to read more about a specific topic by pressing on the blue parts of the text, which will lead to the articles, blog posts that give you more information.

 

Think about what it would be like if you never had to worry about money. There would be no debt to keep you up at night. You could check your bank balance without wincing. You could even splurge on something fantastic and actually be able to feel excited about it. How amazing would that be? 🙂

This is called financial freedom.

Research shows that it can make you feel happier and more satisfied with your life, regardless of the actual value of your bank account.  But how do you get it?

 

Crowdfunding and the asset classes

Experts say that one of the savviest strategies for achieving financial success and freedom is diversification. This means spreading your money across several different asset classes.

An asset class is a particular type of investment. Stocks, for example, are ownership shares in a company. These pay dividends if the company’s value on the stock market increases. Fixed income investments allow the investor to lend money to an organization in exchange for interest on the loan. Cash equivalents, such as money market accounts, are easily accessed and particularly liquid.

The final type of asset class includes commodities and real estate. These more tangible assets tend to be less vulnerable to inflation, but they have often been less accessible to the average investor. Crowdfunding has changed all that.

What is real estate crowdfunding?

The model of crowdfunding allows people to invest in real estate together. Each person contributes a relatively small amount and becomes a part of a Limited Liability Company, which holds the title on a piece of real estate or offers a loan secured by the property. The operating agreement of the company entitles each investor to a share in the income that the property generates.

Benefits compared to other asset classes:

More Choices

Crowdfunding allows you to place your assets in real estate without putting up tens of thousands of dollars or more for a down payment. This means access to property types such as commercial buildings and mid-size apartment buildings, which might otherwise be out of reach.

More Flexibility

Investing in crowdfunded real estate also empowers you to create a customized portfolio. That way, you can select only those projects that align with your goals.

More Security

Finally, because real estate tends to be less volatile compared to other asset classes, it offers more stability in your portfolio and thus in your overall net worth. This is the cornerstone of financial peace of mind.

The goal – Financial Freedom!

Regardless of the investment type that you choose, your goal is likely to increase your net worth with minimum effort and attention. As one of a community of investors, you can let the professionals handle the logistics of the investment and focus on watching your assets grow.

Every new way that you invest can be another step toward a life free from financial worries. If you haven’t thought about real estate crowdfunding before, now is the time to see how it can free you from your money constraints!

And in case you are still wondering if you should invest with Crowdestate, here are 5 reasons why:

  • no fees,
  • minimum investment 100€,
  • use our marketplace to buy or sell shares,
  • you can have multiple investment accounts and invest under your company’s name,
  • you can set up an Autoinvest, which will invest for you (so you don’t have to worry about missing an opportunity).

Go and invest! 🙂

New pre-booking system: what you should know!

Reading time: 1.5 min

 

There’s a new investment opportunity, you were sitting behind the computer just before it was being opened for investing, you were all set. When the clock turned 3 the project was funded in less than a minute and even without you noticing, you had missed your chance to invest. Or when you had set up Autoinvest, went through the day thinking Autoinvest invested for you. But when you arrived home and sat behind the screen, you saw that for some reason your investment had not gone through. Can you relate?

We’ve been working on an efficient solution, which would solve the previous issues, so when you’d like to invest in the project, you wouldn’t have to worry about not making the cut.

This week we conducted a big system update, which included launching a new pre-booking system. With the new system, there are few new changes, that you’d need to be aware of.

You can read how everything works from now on in this blog post.

The difference between old and new

According to the old system, it was possible to familiarize yourself with the project 24h in advance before it was released for pre-booking.

When it comes to the new system, the investment opportunities will be open for pre-booking straight away and the pre-booking will last 24h.

What’s new?

No more limits: You can invest as much as you want.

100€ guarantee: To all investors, who have invested money (in any amount) during the pre-booking period, will be guaranteed a participation of 100€ in the project.

  • In case during the pre-booking period there aren’t enough investments to cover the total amount needed to finance the project, then once the pre-booking period has ended, the investment opportunity will open for investments the way it did before.

If there are more investments than the project could fit, then the investments will be distributed proportionately among the investors, for example:

  • Investment opportunity amount is 1000€.
  • During the pre-booking, 4 investors invest in the amount of 100€, 1000€, 10 000€ and 10 000€.
  • Investments will be 100€, 100€, 400€ and 400€ and the remaining investments will be returned to investors.

OR

  • During the pre-booking, 5 investors invest in the amount of 100€, 200€, 1000€, 5000€ and 5000€.
  • Investments will be 100€, 100€, 200€, 300€ and 300€ and the remaining investments will be returned to investors.

The maximum number of investors, who will be able to pre-book, will be the sum of the investment project/100. In other words:

  • (An example) The investment opportunity amount is 1000€, the maximum amount of investors, who could participate, is 10 because the minimum investment amount is 100€ (10 x 100 = 1000€).
  • In case this happens, the pre-booking period will end immediately, all investors will receive an investment of 100€ and the remaining amount will be refunded.

Autoinvest:  During the pre-booking period, Autoinvest will automatically invest the specified amount (that you have set up). There will be no restrictions, however when there are too many investments than the project could fit, then the Autoinvest investment will be cut the same way as the investment made by hand.

  • In case you have set up multiple Autoinvest accounts, in the pre-booking period only one Autoinvest will invest for you – the one with the biggest investment amount.

Notice: The new pre-booking system does not apply to mortgage loans and RIA opportunities. 

To sum it up, in the pre-booking phase investors can submit their preferred maximum investment amounts. Afterward, the final investment amount will be determined by the number of pre-booking investors. It will remain between 100€ and your submitted maximum investment amount.

 

Well, how does it sound? Understandable? Confusing? A bit frightening?

In case you have any questions, feel free to write to us. But do keep in mind the best way to fully understand, how it all works, is to give it a try yourself.

Have fun while investing! 🙂