Real estate crowdfunding is my favorite way to invest in real estate, as it allows to invest in a completely passive way in real estate and to diversify your portfolio really quickly. I used it to completely replace the income from a flat I owned, and now all my real estate investments are 100% passive and diversified in many real estate deals across the world.
However, it can be scary to actually get started, which is why I wanted to give you this step-by-step guide to get started investing on a real estate crowdfunding platform.
As an example for this guide, I'll take the Housers platform, but you could also follow this guide with any real estate crowdfunding of your choice.
The Housers Platform
Before I dive into the core of the article, I want to spend some time to introduce the Housers platform, which I will take as an example for this guide. This was the first Spanish real estate crowdfunding platform that I invested on, and they are now proposing many real estate deals, in Spain but also in other countries like Italy.
I like the platform because they propose a lot of attractive deals, and you can invest in deals for as low as 1 Euro, allowing an easy diversification of your real estate portfolio. They also have a very clean interface and all the features that you could expect from a nice real estate crowdfunding platform: secondary marketplace to buy/sell shares in deals, payment by credit/debit, and ease of transferring your earnings to any bank account.
The first step to invest on a real estate crowdfunding platform is to browse new deals. Those are deals that are currently available to investors, and that are being funded directly by investors. For example, when I wrote this article there were two deals available on the platform:
As some platforms are very popular (like Housers), there are not always new deals available. However, as most platforms, Housers also proposes a secondary marketplace, allowing people to buy/sell shares on previously funded projects. This is also a great way to invest in real estate crowdfunding, as shares in previous projects are usually at the market price, being sold by people that just want to get out of their investments. This is the marketplace on Housers:
Note that on some platforms, you will have to deposit money first (usually via bank transfer) before you can invest in a deal. However, as on Housers you can invest directly by using a credit/debit card, it is not necessary to do a deposit first.
Investing in Real Estate
The next step is to find good deals to invest in, and then to actually invest in those deals. Finding a good deal is actually a topic on its own - so for that I recommend getting my free real estate crowdfunding checklist that you'll find at the bottom of this post.
For the example here, I selected on a deal that was available on Housers:
Usually, on the page describing the deal, you will find a description, as well as all the financial information about the deal. Especially look for the annual yield (the rent you will receive) and the expected capital gain (what you will gain if the property is sold one day).
Once you are ready to invest, you simply need to select how many shares you want and then pay:
After that, no need to go anywhere to see a laywer or notary to officialise the purchase: you are immediately the owner of a piece of real estate!
Monitoring Your Investments
The final step is to then monitor your investments, and watch the earnings from rent (and later from the sale of some of your investments) go to your account. As real estate crowdfunding is 100% passive, you don't have to take care of anything to manage your properties. The only thing you will have to do is to vote along with other investors when a big decision has to be taken about the property, for example to sell it after a given amount of years.
This is for example my dashboard on the Housers platform:
From there, you can, for example, reinvest your gains directly on the platform, or simply transfer them to your bank account. On the platforms where I already invested a lot, I tend for example to take the gains out every month, to reinvest them somewhere else as I like to be diversified on several platforms.
To sum up, the process of investing on a real estate crowdfunding platform like Housers is quite straightforward: browse deals, select good deals and invest in them, and then grow your portfolio from there. Even if you are currently holding other assets or even 'classical' real estate, I'd really recommend trying out real estate crowdfunding.