Due to its attractive investment characteristics, the real estate market is growing quickly and taking up more allocation in investors’ portfolios. However, historically, only wealthy and institutional investors had access to this market due to the high capital requirements. Real estate crowdfunding platforms have stepped in to fill this gap, enabling anyone, regardless of capital, to participate in this high-return sector. Despite the fact that thousands of projects have been funded and numerous platforms are in operation across Europe, real estate crowdfunding is still in its early stages compared to other investment options. This is especially true in Ireland, where few platforms exist, but many other European platforms allow Irish investors to add real estate exposure to their portfolios.
In this article, we’ll discuss the key considerations to keep in mind when choosing the best real estate crowdfunding platforms and provide a list of some of the best real estate crowdfunding platforms for investors living in Ireland.
What is real estate crowdfunding?
Real estate crowdfunding is a technique used by developers to obtain cash and finance their projects from “the crowd,” whether for remodeling, construction, or simply rental management. Real estate crowdfunding platforms connect developers with potential investors, who may want to get exposure to real estate with a small amount of money and earn a good interest in return. Unlike direct property ownership, investors do not have to worry about property management or paperwork. They just invest, and the interest they earn is determined mostly by the project’s type.
About real estate crowdfunding in Ireland
Real estate in Ireland has enjoyed fast growth and prosperity over the years, driving property prices to relatively high levels. However, an unprecedented housing crash occurred in 2008, with properties losing more than half their value through several years of consistent decline. A report by real estate agent Savills Ireland showed that over €5.5 billion was invested in the Irish real estate market in 2021, up from €3 billion in 2020. Moreover, according to a PWC report, Dublin is the fifth (along with Paris) most active real-estate market in Europe for capital invested, after London, Frankfurt, Berlin, and Munich, with more than €3 billion of capital inflows.
Like in other countries, it takes some time to buy an apartment in Ireland due to the increased cost and paperwork. Accordingly, investors looking for a fast way to get exposure to real estate use crowdfunding platforms. In Ireland, few platforms are available on the market. However, Irish investors used other foreign platforms to participate in real estate investment projects in other European countries.
When looking for the platform that best suits your needs, several factors should be examined. To create a portfolio with diversified real estate exposure, you might want to look for a platform that offers investment opportunities from multiple countries. Alternatively, if you plan to take your gains on a regular basis, you should look at the fee structure (particularly withdrawal fees). Furthermore, you may wish to pick a platform with a secondary market if you want to liquidate your holding easily. Finally, if you are a more risk-averse investor, you may want to look into the platform’s history and the default rate of its previous projects.
Best Real Estate Crowdfunding Platforms in Ireland
Based on our assessment, we found only one Irish real estate crowdfunding platform. We assessed several other platforms that allow Irish investors to invest in real estate. Accordingly, here’s some information about the best real estate crowdfunding platforms available for Irish investors, whether you are looking for local or international investment opportunities:
Crowdestate is one of the most 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. Even though they currently do not have investment opportunities in Ireland, almost 300 Irish investors used the platform to invest in real estate across Europe.
Founded in 2018, Property Bridges is an online real estate crowdfunding platform. They facilitate loans to the construction sector by connecting developers with lenders who are willing to finance real estate projects through asset-backed securities.
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.
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.
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.
Features of real estate crowdfunding platforms
When considering real estate crowdfunding platforms, it is important to consider the platform’s main features, such as the minimum account balance, fees charged, secondary market availability, and auto-investing.
- Fees: Unlike brokers in Ireland, which charge a fee or spread on each transaction, 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 at any time. 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 Ireland
|Platform||Account Minimum||Fees||Secondary Market||Auto-invest|
|Crowdestate||€100||No fees on deposit or withdrawal||Yes (subject to 2% fees)||Yes|
|Property Bridges||€500||No fees||No||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|
Usually, 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. Although not all real estate crowdfunding platforms have a statistics page, we presented in the table below some of the key metrics that we could find, such as the number of investors, the number of projects funded, historical return, and the cumulative amount raised.
Comparing some metrics of the best real estate crowdfunding platforms available for Irish investors
|Platform||Number of investors||Number of projects||Historical return||Cumulative amount raised|
|Property Bridges||4.6K+||28+||7.85% (2021)||€16 M+|
|Rendity||Not disclosed||160+||6.30%||€112 M+|
Why is Crowdestate one of the best real estate crowdfunding platforms for British investors?
Based on the above comparison tables, I believe Crowdestate is among the best real estate crowdfunding platforms for British investors looking for European real estate exposure. 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 for 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.
Real estate crowdfunding is still relatively a new investment vehicle in Europe, and in Ireland in particular. However, it is becoming very popular among Irish investors due to its simplicity in increasing exposure to the real estate sector at a cheap cost (in some cases, without any cost). Furthermore, investors can begin investing with a small sum of money. Although we couldn’t find more than one real estate crowdfunding platform in Ireland, many other European platforms offer Irish investors the opportunity to get exposure to real estate by offering attractive projects across the continent. On the downside, while some platforms provide secondary markets, real estate crowdfunding is less liquid than other investment options such as forex or stocks—both of which are available through well-known brokers, such as eToro.
This article presents a few platforms we consider among the best real estate crowdfunding platforms available in Ireland. We encourage you to check their websites, read about the projects, and check the investment process before deciding where to invest.