Up until recently, the real estate sector was exclusively accessible to wealthy or institutional investors. But thanks to real estate crowdfunding platforms, investing in this high-return industry is now accessible to any investor, regardless of the amount of capital he is willing to invest. Although real estate crowdfunding in Europe, and in Italy particularly, is still in its early stages when compared to other investment options, it has grown in popularity as a result of recent significant advancements, with many platforms operating across the continent and thousands of projects funded.
In this article, we will cover the most important aspects to consider while looking for the best real estate crowdfunding platforms, as well as give a list of some of the leading real estate crowdfunding platforms for investors living in Italy.
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 Italy
Crowdfunding has already become widespread in the real estate sector, with a market estimated at $10.78 billion in 2021. However, in 2022, Italian real estate crowdfunding platforms raised €145 million for 354 projects, with equity and lending platforms raising €55 million and €90 million, respectively. When it comes to real estate crowdfunding, many platforms offer investment opportunities in Italy, while others allow Italian investors to engage 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. On the other hand, 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 holdings 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 Italy
We assessed several platforms that allow Italian investors to invest in real estate or offer real estate investment opportunities in Italy, and you can find a brief overview of each one below, whether you are seeking 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. The platform offers several opportunities in Italy, and more than 2,800 Italian investors have used the platform to invest in real estate across Europe.
Founded in 2017, Walliance is an Italian real estate crowdfunding platform that offers partial equity ownership in real estate. Investors benefit from rental income and capital gains from property value appreciation.
Re-Lender is a crowdfunding platform that allows investors to fund real estate developers by investing in real estate loans. Re-lender provides financing to businesses in a variety of industries, including industrial, ecological, real estate, and technological. It was established in 2019 and has offices in Spain and Italy.
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.
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 Italy, which charge a fee or spread on each transaction, real estate crowdfunding platforms do not charge fees to lenders (people like you), but rather charge them to 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 Italy
|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|
|Bulkestate||€50||No fees||Not available||Yes|
Each real estate crowdfunding platform publishes key metrics regarding the projects it has funded over 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, the historical return, and the cumulative amount raised.
Comparing some metrics of the best real estate crowdfunding platforms available for Italian investors
|Platform||Number of investors||Number of projects||Historical return||Cumulative amount raised|
Why is Crowdestate one of the best real estate crowdfunding platforms for Italian investors?
Based on the above comparison tables, I believe Crowdestate is among the best real estate crowdfunding platforms for a Slovak investor 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 a relatively new investment vehicle in Europe and Italy in particular. Nonetheless, it has risen in popularity in recent years as new platforms have entered the market and are offering more diverse projects. It is a simple strategy to increase 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. 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 XTB, Trade Republic, Trading 212, or the US-based TD Ameritrade.
This article presents a few platforms we consider among the best real estate crowdfunding platforms available in Italy. We encourage you to check their websites, read about the projects, and check the investment process before deciding where to invest.