The providers in the real estate crowdinvesting niche are well known. But who are the investors? This is what the Zinsbaustein platform wanted to know.
Crowdinvesting in real estate is still a niche. Investors mostly invest in subordinated loans for real estate projects via internet platforms. The interest rates are comparatively high at 5 to 7 percent, but so are the risks. Because if the project fails, investors must assume that they will not get any money back. So far, this has only been the case for one of 387 projects – 149 have already been repaid.
Nevertheless, the form of investment is enjoying great growth. According to the Federal Crowdfunding Association, 218 million euros were invested in 2018. In 2017 it was 126 million euros in the previous year. This year it is already 100 million euros after four months.
Top assets and real small investors
These projects are mediated through a number of Internet platforms, the largest of which is Exporo with a share of more than 60 percent. So while the brokerage market is manageable, little has been known about investors so far. The Zinsbaustein platform therefore recently surveyed around 10,000 investors and potential investors in order to get a picture.
Above all, it was about how wealthy investors actually are. The result is a very colorful mix, even if, of course, there is often a certain amount of wealth behind it. More than a third of those surveyed stated that they had more than 100,000 euros in their portfolio. Almost 30 percent, on the other hand, had invested less than 50,000 euros. Top assets and real small investors were both equally large. Just under ten percent said they had invested more than 500,000 euros or less than 10,000 euros.
The latter are more cautious. Despite lower interest rates, investors with smaller budgets would have tended to show more interest in products with a conservative risk profile.
According to the survey, the platforms have so far been on the wrong track in one respect when they highlight short running times as a plus in their advertising. In fact, there is great interest in projects whose duration extends beyond the often usual one to two years, especially if they bring continuous payouts. Around 60 percent of those surveyed hope for terms of more than ten years and annual returns of between 5 and 6 percent.
Such products are currently bringing more and more platforms onto the market. For example, Exporo is offering a ten-year investment in rented micro-apartments in Hamburg, which should bring a payout of 4.5 percent over ten years.
Zinsbaustein, in turn, recently expanded its product range to include so-called club deals, in which investors and a maximum of 19 other investors invest in a project of at least 50,000 euros. “Just like our real estate projects, which are usually sold out at record speed, the sale of new real estate financial products via digital platforms also has a future, which open the way for investors to the white capital market,” says Managing Director Volker Wohlfarth. “The results clearly show that our existing offer is very well received and has the potential for diversification”.