The real estate crowdfunding.

by Lisa Woodcock

 

Risks do not prevent its success

Risks do not prevent its success

Appeared in 2014, crowdfunding ( real estate crowdfunding ) , a new way of investing in real estate is a huge success. For the first quarter of 2017, the real estate crowdfunding specialists’ barometer is 20% higher than in 2016 over the same period. This means that more and more private investors are attracted by this type of financing , which generally offers a low entry ticket and an often attractive return . In all, this is 36 million euros collected since the beginning of the year, via 22 platforms, to finance a total of 85 projects. According to the forecasts, by the end of the year the total collection could reach 90 million euros, for a forecast of 180 to 200 funded projects. The real estate crowdfunding allows mainly to finance programs of promoters. They turn to the platforms when developing their financing plan and propose long investment periods, with profitable returns. Other players in the real estate sector are gradually joining them. Indeed, developers and developers have started since the beginning of this year to turn to crowdfunding real estate , despite their need for funds is lower. The consequence has been a general decrease in the amount of collections, rising from 476,190 euros in the first half of 2016 to 423,529 euros in 2017. Another novelty, the projects financed no longer exclusively concern real estate residences but also offices, logistics needs and also shops. It is mainly individuals who invest in participative real estate financing .

An investment that pays off

An investment that pays off

Barometer actors say the results are very encouraging . The amounts reimbursed in the first half of 2017 amounted to 9 million euros, whereas in 2016, it had only reached 5 million euros. Ditto for the number of projects reimbursed , 12 for 2016, while they are 31 in the first half of 2017. Experts say that these statistics are very positive. With 15% of funded projects already repaid to investors since the start of crowdfunding in France, the trend is confirmed. Half of the projects funded in the first half of 2016 have already been repaid. The average yield went from 9.2% over this period to 9.5% in the first half of 2017. However, one must always be cautious and above all aware of the risks. In case of problem, the investor can lose all his bet because there is no guarantee. Even if some show a yield ranging from 7 to 12% excluding taxes over a period of 12 to 24 months, legal proceedings are underway against certain platforms. It is strongly recommended not to invest more than 5 to 10% of its assets.

Investing in the “crowd immo” is attractive for individuals, provided they have funds and balanced finances. The one whose budget is overwhelmed by monthly payments scattered several credits, may consider a grouping of loans . It allows all outstanding loans to be combined into a single loan at attractive interest rates in order to repay only one monthly payment that can be adjusted downwards. This operation increases both the repayment period and the total cost of the new credit.