What is 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 500 loans, and only had one defaulted loan which is a very good ratio:
As you can see from the graph, they are continuously growing, and they plan to expand to the UK & to Portugal in the future (currently most of the loans are around the Baltic countries).
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 really low (0.2% when I invested), 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 activated mine with just one parameter: 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 over a year that 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%, which is quite high compared to the average rate of the platform which is of 3.3%. 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. Here are my gains since I started to invest on the platform:
As you can tell from the graph, after a slow start (as I only got interests back from projects), I got a steady growth of my income on the platform, and then a steep increase of the gains, mostly due to some projects paying back more than expected after they were completed. The actual XIRR of the platform is at 7.73%, and going up as more projects are being repaid. 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.