EstateGuru Review 2024: Is it Safe to Invest?
Last Update: Tue, Jan 16 2024
In order to diversify my investments, I regularly invest on new platforms that I then review so you too can invest on them & feel confident in doing so.
In this article, I will review the real estate crowdfunding investment platform EstateGuru, that I got to know by reading out it on real estate crowdfunding blogs, but also directly heard about it via other investors. Therefore, I really wanted to try it out and to add some more property investments to my portfolio.
What is EstateGuru?
EstateGuru is a European Real Estate Crowdfunding platform based in Estonia, that mainly funds property loans for businesses. As such, all the loans on the platform always come with a property as a guarantee, which makes it very safe for the investors. Note that I usually prefer to invest in equity real estate crowdfunding (where you get a monthly rent from your properties), so I was at first a bit reluctant to invest in property loans. However, the fact that you can easily diversify into many loans will also provide a monthly income at the end and will add more diversification to my portfolio.
So far, they funded over 700 Millions worth of real estate loans of the years:
As you can see from the graph, they are continuously growing, and they recently expanded to several European countries like Spain and Portugal, making it a true European real estate crowdfunding platform.
What returns can I expect from investing on EstateGuru?
The returns that you can expect on EstateGuru greatly depends on which projects you will invest in on the platform. Currently, they advertise an average return of 10.64% on the platform:
This is an excellent yield in the real estate crowdfunding space, as many platforms are more around 7%. If you compare that to classical real estate, this is also an excellent annual return, as you will usually only get a 5% annual yield on classical real estate in Europe. I will of course verify this yield in the rest of the review.
Is it safe to invest on EstateGuru?
The question of the safety of the investors funds is central when investing on a crowdlending platform, as they will be managing all the money that you deposit on the platform and invest it in the projects that you select. When reviewing a new platform before adding it to my portfolio, I look at three things: what the platform offers in terms of guarantees, the company itself (and their team), and finally how the projects listed on the platform are picked.
Risks & guarantees on EstateGuru
EstateGuru offers loans that are backed by real estate properties, which are there as a collateral in case something would go bad with the project. They also have low LTV (loan to value) on all the projects they offer on the platform, meaning there will be enough cash to cover the money due to investors in case a project would go to default.
EstateGuru is also a very transparent company, and they regularly publish reports that shows all the current statistics about the company and their activities, like the amount of loans funded, the current status of all projects on the platform, and much more.
They also got their European Crowdfunding license (ECSPR) in May 2023, which is an excellent news for the platform:
This means that the platform is now regulated under the European framework for crowdlending platforms, and adds an additional layer of safety for investors.
The company & the team
As for all the platforms I add to my portfolio, I checked that EstateGuru was actually a real company registered in Estonia, and it is.
I also checked their management team, to see who is actually behind the platform. The information about who is on their team was really easy to find on their site, and I really liked this transparency.
I for example checked the profile of their CEO Marek Partel. I found that he has a long track record in the field of finance & real estate, having for example be the co-founder of Invego, a company that is building real estate projects in Estonia.
Let's now talk about the projects that are present on the platform, as most of the risks will come from this part of the platform.
On EstateGuru, all projects are coming from borrowers that apply for funding on EstateGuru. They are currently coming from many EU countries, like the Baltic states but also countries like Spain or Portugal.
They also use a strict process to select which real estate projects will be funded by the platform, evaluating the financials of the projects, but also the experience and track record of each the borrowers that apply on the platform. As I already mentioned before, they only take projects with low LTV, usually around 50% from what I saw recently on the platform.
Getting started with EstateGuru
It is actually really easy to get started with EstateGuru and have your money start generating interests on the platform.
Creating an Account & Depositing Money
As for most of the real estate crowdfunding platforms, the first step is to open an account. On EstateGuru, this is very easy and it took me less than 5 minutes to get my account opened.
Once this is done, you can actually add money to your EstateGuru account. I did that via TransferWise, and the money was on my account in 2 days.
As a note here, I now systematically try to also withdraw money on all the platforms that I review, just to make sure there is nothing shady on this side. For EstateGuru, there were no problems at all and I got my money back in 2 days as well.
Browsing Available Deals & Investing
We can now actually browse deals that are available on the platform. As I mentioned before, most of the loans on the platforms are short to medium term property loans, which is great as you will get your money back faster & it's usually a sign of a solid borrower. Note that for all loans, the property is, of course, coming as a guarantee in case the borrower wouldn't pay back. The interests rates on the platform are usually around 11%, which is great for real estate crowdfunding. This is for example the loans that were available when I started to invest on the platform:
You can also dive deeper into each loan and get a lot of details concerning the loan
For some of them, you can even get drone footage of the properties, which I think is pretty cool. On this page, you'll also find information about the borrower, and the exact loan repayment calendar.
The Auto-Invest Function
You could, of course, invest manually into each loan, but this is not what I would recommend on the platform. As the default rate on EstateGuru is quite low, it's safe to actually spread all your capital into as many loans as possible. And for that, they have a very handy auto-invest function that is really easy to configure:
I of course chose a custom strategy, with the following settings:
It focuses on one parameter in particular: short-term loans only. This will ensure that I invest in the highest quality of loans on the platform, and also that I will get my money back quicker. Note here that the loans on the platform are usually funded very rapidly, so I might raise the 50 Euros cap in the future as currently, I can't get my money invested fast enough.
My Current Results with EstateGuru
Let's now talk about the returns that I got on the platform since I first invested. At the time I've updated this article, it's now been several years since I started to invest on the platform. I currently only have one project that is in the 31-60 days late zone, one which is over 60 days late, and four defaults. I have invested in over 85 projects so far, so this gives us a default rate at the moment of 8.88%. However, EstateGuru has an excellent track record of defaults recovery, and so far no capital have been lost for investors on the platform. I will of course update this section has I get more information about those defaulted loans. For two of them, EstateGuru is already in the process of collecting funds, and the process is well under way for the two others.
My forward yield is also now estimated at 11.05% by the platform, which is completely in line with the projects I invested in on the platform.
As for all platforms I invest in, I also exported the raw data from EstateGuru and used TrackInvest to plot the actual results from the platform. I found that my current effective yield is at 11.10% - really close that what is advertised by the platform, so I am definitely very satisfied with my returns on EstateGuru.
I will of course update this article when I receive more money from the projects I invested in via EstateGuru.
Verdict: Should You Invest on EstateGuru?
As I mentioned at the start, I usually prefer more 'traditional' real estate crowdfunding investments where I own a part of a property that will give me a monthly income from the rent. However, I have to say that I am really satisfied with EstateGuru. The fact that I can invest in a wide variety of loans with great returns means that after some time it would be like receiving a monthly 'rent' from my investments on the platform. After more than a year of investing on the platform, I have good returns and whereas some of the loans I invested in went to default, this is to be expected on such a platform, and EstateGuru has an excellent track record of recovering defaulted loans with so far no capital loss for investors across the platform.