{"id":10260,"date":"2022-10-06T16:52:26","date_gmt":"2022-10-06T16:52:26","guid":{"rendered":"https:\/\/loans.tiida-nissan.ru\/?p=10260"},"modified":"2022-12-08T18:40:46","modified_gmt":"2022-12-08T18:40:46","slug":"crowdinvesting-high-yield-real-estate-financing","status":"publish","type":"post","link":"https:\/\/loans.tiida-nissan.ru\/crowdinvesting-high-yield-real-estate-financing.html","title":{"rendered":"Crowdinvesting: high-yield real estate financing for private investors?"},"content":{"rendered":"

Low interest rates in the capital market are gradually becoming a threat to savers.<\/p>\n

Investment in tangible assets seems to be advisable – especially real estate is often recommended by financial experts.<\/p>\n

With the help of crowdinvesting, even small amounts of capital can be invested in real estate. In addition to a lush return, however, there are also some dangers waiting for savers.<\/p>\n

Everything you need to know about crowdinvesting in real estate, and what advantages and disadvantages it offers private investors, you will learn in this article.<\/p>\n

Historically low interest rates: the savers' dilemma<\/h3>\n
\"Crowdinvesting:<\/div>\n

Low interest rates on investments<\/p>\n

The current interest rate environment has been a headache for savers for several years:<\/p>\n

Those hoping for adequate returns cannot continue to rely on fixed-rate financial products such as term or overnight deposits.<\/p>\n

As before, these are safe investments, but the low interest rates ensure that a creeping expropriation of savers is taking place – the return is lower than the slowly recovering inflation.<\/p>\n

Endowment life insurance policies also seem hardly suitable for making meaningful provisions for retirement. The guaranteed interest rate has been gradually adjusted downward in recent years; experts doubt that life insurers will even be able to generate this low interest rate if the low-interest period persists.<\/p>\n

Experts give a clear answer on how investors should invest their money:<\/p>\n

Tangible assets have the distinct advantage of being able to decouple themselves from the general interest rate trend of the capital market – the performance depends almost exclusively on demand. Real estate, in particular, has been experiencing high increases in value for a number of years. For private investors this is only a weak consolation, because usually not enough capital is present, in order to be able to transact larger real estate business.<\/p>\n

Who wanted to invest so far "concrete gold", had to decide for real estate funds – and accept at least two disadvantages:<\/p>\n

    \n
  1. A significant portion of the return generated remained with the banks.<\/li>\n
  2. The selection of concrete real estate projects was made by the credit institution.<\/li>\n<\/ol>\n

    At this point, so-called crowdinvesting opens up new opportunities for investors.<\/p>\n

    For the first time it is possible to invest comparatively small amounts starting from 500 euros in real estate. For private investors this option is therefore already interesting if the financial means are manageable.<\/p>\n

    Crowdinvesting is an association of capital providers who finance a specific real estate project at least in part. The developer usually resorts to mixed financing, including bank loans. Through an online platform, potential financiers can view the expose of certain projects and invest accordingly.<\/p>\n

    One of the advantages is that project selection can also be made somewhat idealistically. For example, it is possible to promote the new construction or renovation of a property in your own hometown.<\/p>\n

    \"Crowdinvesting:<\/div>\n

    Screenshot from exporo.en – Here: portfolio of different construction projects<\/p>\n

    The advantage of the crowdinvesting platform is that the risks are classified in different categories.<\/p>\n

    The categorization is made from "AA" for an almost sure repayment up to "F" for a high-risk project. Because even with a comparatively solid real estate investment must be calculated with a not to be underestimated risk of loss.<\/p>\n

    Terms are usually at least 12 months, and annual interest rates are around 5 to 6 percent. In view of the current interest environment it concerns thus quite dreamlike net yields.<\/p>\n

    Retirement planning via crowdinvesting? Experts urge caution<\/h3>\n
    \"Crowdinvesting:<\/div>\n

    Is crowdinvesting a good investment?<\/p>\n

    Experts, however, hardly believe that all retirement capital should be invested in real estate via crowdinvesting.<\/p>\n

    The main problem is the fact that they are usually so-called subordinated loans. As the name suggests, these are loans that are only repaid with a very low priority in the event of the developer's possible insolvency. The obligations are so low that banks will even accept such a subordinated participatory loan as equity capital.<\/p>\n

    For this reason, the paradoxical situation arises that capital generated through crowdinvesting leads to the credit rating for the construction project actually increasing. The developers buy this improved creditworthiness through a higher interest rate, which is granted within the framework of crowdinvesting.<\/p>\n

    In case of reliable and punctual repayment of the loans, it is definitely a win-win situation. If, on the other hand, the developer runs out of money, investors can be reasonably sure of a total loss. Accordingly, it seems hardly surprising that many experts also only advise investing as much money as seems bearable in the event of a loss.<\/p>\n

    In addition, as with any other investment, it is advisable to diversify investments. If different projects are supported, the return on one construction project may offset the potential loss on another real estate project. Moreover, it is not a forced advantage that the selection is made by the investor. Those with little expertise in real estate business may well have their difficulties in selecting right projects.<\/p>\n

    Last but not least, there is of course still the risk that the currently booming real estate market loses momentum. At present, it still seems exaggerated to speak of a real estate bubble, more and more often the current value development, especially in prime locations, is viewed critically.<\/p>\n

    Crowdinvesting for startups: experts advise against it<\/h3>\n
    \"Crowdinvesting:<\/div>\n

    Investing in startups?<\/p>\n

    Investing in real estate is not the only option; companies can also be financed via crowdinvesting.<\/p>\n

    Unlike the better-known crowdfunding, however, the focus here is also on return on investment. So this is in no way a "donation" as crowdfunding usually is. It is rather a matter of promoting a thoroughly desirable and promising project and at the same time earning a handsome return on investment.<\/p>\n

    In principle, however, it is high-risk capital, which a few years ago was reserved for companies. Again, it's difficult to assess how crowdinvesting benefits investors and businesses.<\/p>\n

    Funded startups, aside from the comparatively high interest rate, need to consider that many new co-owners will also result in a higher level of say being demanded.<\/p>\n

    In addition, transparency is also required, which is not likely to please every idea generator: In order to promote one's own product or service to investors, the business idea must be presented quite openly – which is not likely to escape the attention of competitors either.<\/p>\n

    In addition, experts rate the risk of failure as particularly high for start-ups. At the same time, financiers hardly profit in the event of a possible success; the profit sharing of shares is far greater here.<\/p>\n

    Experts advise in any case to study the investment contracts more closely. Unlike conventional financial contracts, crowdinvesting is still a little-known form of financing, at least in this country, and different providers have widely differing contract designs.<\/p>\n

    Successful growth market: Crowdinvesting is becoming increasingly popular in Germany<\/h3>\n

    In the USA, crowdinvesting has already established itself as an entirely new form of financing.<\/p>\n

    The construction of a high-rise building, which was realized via the "Prodigy Network", is often cited as a successful example in this context. In the process, 3.800 private investors for the fact that the equivalent of around 155 million euros could be collected. This is the single largest amount raised globally via crowdinvesting for a real estate project.<\/p>\n

    In Germany, experts likewise believe that growth is likely to continue for some time – currently, the volume of funds generated via crowdinvesting is increasing rapidly: while only €20.1 million was raised in 2014, the figure rose to €45.9 million in 2015, before even reaching €63.8 million in 2016, €40.3 million of which was in real estate investments.<\/p>\n

    One cause that inspires some optimism among financial experts is that crowdinvesting platforms are seen as transparent and simple – which are not necessarily qualities previously attributed to the financial industry.<\/p>\n

    Many people are quite dissatisfied when asked about the quality of the financial market products they have received so far. Especially if the interest rate situation does not change soon, the run on crowdinvesting is likely to intensify further.<\/p>\n","protected":false},"excerpt":{"rendered":"

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Investment in tangible assets seems to<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nCrowdinvesting: high-yield real estate financing for private investors? - loans.tiida-nissan.ru<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/loans.tiida-nissan.ru\/crowdinvesting-high-yield-real-estate-financing.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Crowdinvesting: high-yield real estate financing for private investors? - loans.tiida-nissan.ru\" \/>\n<meta property=\"og:description\" content=\"Low interest rates in the capital market are gradually becoming a threat to savers. 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