While real estate investments were exclusively available to wealthy or institutional investors, real estate crowdfunding platforms facilitated access to this high-return industry. Although real estate crowdfunding in Europe is still in its early stages compared to other investment options, it has grown in popularity as it has recently made significant advances, with many platforms operating across the continent and thousands of projects funded.
In this article, we’ll discuss what factors should be considered when checking real estate crowdfunding platforms, and we’ll list a few of the best real estate crowdfunding platforms in Europe. We considered fee structure, secondary market availability, diversification, and unique features.
What is real estate crowdfunding?
Real estate crowdfunding is a method for developers to raise funds and finance their projects from “the crowd,” whether for renovation, development, or just rental management. The real estate crowdfunding platforms match developers with potential investors, who will have the opportunity to invest in those projects for a small amount and receive interest in return. Unlike owning property directly, investors don’t need to worry about property management or the paperwork. They simply invest, and the interest they receive will depend on the project’s type.
About Real Estate Crowdfunding in Europe
As per the latest Polaris market research, the global real estate crowdfunding market was valued at $10.78 billion in 2021 and is projected to reach $250.62 billion by 2030. Hence, a CAGR of 45.6% during the forecast period. In Europe, this sector is seeing impressive growth and getting more popular among investors in recent years. Unlike US platforms, European real estate crowdfunding platforms allow users from almost any country to invest and get exposure to the European real estate sector.
Several factors should be considered when searching for the best suitable platform. To build a diversified portfolio, you’ll prefer a platform that offers projects spread across several countries. You might want to check the pricing structure if you plan to withdraw your profits regularly. Moreover, you might want to consider a platform that offers a secondary market as you might want to liquidate your position. Finally, if you’re a more risk-averse investor, you might need to check the history of the platform and the default rate of its previous projects.
Best Real Estate Crowdfunding Platforms in Europe
Here’s some information about the best real estate crowdfunding platforms in Europe based on our assessment:
Crowdestate is one of the well-known real estate investing platforms in Europe. The platform provides excellent diversification opportunities as its projects include various property types (residential, retail, office, and healthcare buildings) and are spread across Europe (Estonia, Finland, Latvia, Poland, Slovakia, Romania, Italy, and Portugal). Crowdestate was founded in 2014, and its projects include rental, development, and renovation, in addition to business financing.
Based in Estonia, EstateGuru is a real estate crowdfunding platform that focuses primarily on short-term property-backed loans (the average loan term is 14 months). The real estate projects cover several European countries, such as Estonia, Lithuania, Germany, Latvia, Finland, Spain, Portugal, and Sweden. It was founded in 2014.
Established in 2015 and based in Vienna, Rendity is a real estate crowdfunding platform focusing on projects in Austria and Germany only. It provides various types of investment like Rendity Income and Rendity Growth.
Founded in 2017, Reinvest24 gives access to equity real estate crowdfunding, with projects across six different European countries: Moldova, Estonia, Latvia, Spain, Switzerland, and Germany.
Bulkestate is an Estonian real estate crowdfunding platform founded in 2016, concentrating on the Latvian real estate market. The platform also offers a “group buying” feature, which lets investors directly buy a property at a considerable discount.
Features of real estate crowdfunding platforms
When considering real estate crowdfunding platforms, it is worth checking the main features of the platform, such as minimum account balance, fees charged, availability of secondary market and auto investing.
- Fees: Unlike European robo-advisors which usually charge fees on assets under management, real estate crowdfunding platforms do not charge fees on lenders (people like you), they rather charge it on borrowers. Still, some platforms might put commissions on withdrawals, or impose a success fee whenever the return on investment is above a certain rate.
- Secondary market: Many platforms offer secondary markets where investors can sell their investments and exit their positions anytime. Some platforms charge a fee on transactions executed on the secondary market, so it is worth checking those fees before proceeding with the transaction.
- Auto-invest: Some platforms offer an auto-invest feature allowing investors to automatically invest available funds based on predetermined criteria.
Comparing features of the best real estate crowdfunding platforms in Europe
|Platform||Account Minimum||Fees||Secondary Market||Auto-invest|
|Crowdestate||€100||No Fees on deposit or withdrawal||Yes (subject to 2% fees)||Yes|
|EstateGuru||€50||€1 per withdrawal, inactivity fee of 2.5€/monthly||Yes (subject to 2% fees)||Yes|
|Rendity||€100||No fees||Not available||Yes|
|Reinvest24||€100||1% success fee and €2 per withdrawal||Yes (1% fee may apply)||No|
|Bulkestate||€50||No fees||Not available||Yes|
Each real estate crowdfunding platform publishes key metrics regarding the projects funded throughout the years. We recommend checking this statistics page as it indicates the platform’s efficiency in offering successful and profitable projects to investors. Some key metrics are presented in the table below, such as the number of investors, the number of projects funded, historical return, and cumulative amount raised.
Comparing some metrics of the best real estate crowdfunding platforms in Europe
|Platform||Number of investors||Number of projects||Historical return||Cumulative amount raised|
|Rendity||Not disclosed||160+||6.30%||€112 M+|
Why is Crowdestate one of the best real estate crowdfunding platforms in Europe?
Based on the above comparison tables, I believe Crowdestate is among the best European real estate crowdfunding platforms. Here are a few reasons why I believe it has an advantage over other platforms and why I think you should consider it when looking for a suitable real estate crowdfunding platform:
- A rigorous due diligence process: Crowdestate chooses only the best investment opportunities to investors after conducting an extensive background check on projects’ information, business plans, and financial models.
- A low minimum balance required: With only €100, an investor can start investing from almost anywhere in the world.
- Secondary market available and active: 33.11% of investors are active in the marketplace. As such, whenever an investor needs to exit the market, he might be able to find a potential buyer faster.
- Diversified projects: The projects offered on the platform are well diversified geographically and across different types (residential, commercial, and business financing).
- Low fee structure: Unlike several real estate crowdfunding platforms, Crowdestate does not charge any commission on withdrawals. However, it charges a 2% commission on transactions conducted on the marketplace and a success fee (typically 20%) over the 8.00% hurdle rate per year.
- Auto-invest: Crowdestate allows investors to automatically invest the funds available in their account according to specific parameters such as investment amount, expected interest rate, investment term, type of investment and country.
European real estate crowdfunding is a relatively new investment vehicle that has grown in popularity recently as many platforms entered the market. It is an easy way to get exposure to the real estate sector at a very low cost (in some cases, without any cost). Additionally, investors can start investing with a small amount of money. On the downside, although some platforms offer secondary markets, real estate crowdfunding is less liquid than other investment options such as forex or stocks – available on European Trading Platforms, the EU competitors to the US-based Robinhood, Webull, E*Trade, or TD Ameritrade.
This article presented a few platforms we consider among the best European real estate crowdfunding platforms. We encourage you to check their websites, read about the projects, and check the investment process before deciding where to invest.
Crowdestate is one of the very first real estate crowdfunding platforms, established in early 2014.
Start your real estate investment journey by signing up on Crowdestate to access a wide range of pre-vetted real estate investment projects.
Have questions about real estate crowdfunding? Here is our blog post about 7 things you should know about real estate crowdfunding.