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Real estate crowdfunding, also known as participatory real estate financing, is a relatively new investment method that allows individuals to finance real estate projects by pooling their capital through an online platform such as Raizers. This innovative approach makes real estate more accessible to the general public and offers potentially attractive returns.
Traditional real estate investing presents investors with various management challenges that can lead to additional costs or require a more time-consuming commitment. With real estate crowdfunding, investors are not involved in project development, organizing construction work, paying contractors, monitoring the construction site, or selling the properties involved in the construction or renovation program. Ultimately, crowdfunding appears to be a way to invest in real estate while avoiding the operational aspects of the process.
Crowdfunding real estate investments typically start at €1,000 (this varies by platform), making them more accessible, even for investors for whom real estate might not have been an initial focus. Furthermore, the funds are tied up only for a relatively short period—which depends on the nature of the project—and rarely exceeds two years.
Although, like any form of investment, real estate crowdfunding involves risks, the returns offered—even if they vary from one project to another—are often higher than those of current savings accounts or even euro-fund life insurance policies. For real estate crowdfunding investments, the return is generally annual and is displayed by the platform when it presents the opportunity to investors. Please note, however, that this rate is shown before taxes; applicable taxes must be deducted for the individuals involved.
