Joining The Crowd
People looking to dip their toes in the property investment market have been given a new way of doing it using the modern internet phenomenon of crowdfunding.
With the real estate market in the big Spanish cities like Madrid and Barcelona, and hotspots such as Marbella on an upward trend, and with the stock markets generally offering low returns, the idea of putting money into bricks and mortar is an increasingly attractive one.
But for many small investors opportunities to get involved in the market are restricted and some developers too still have problems raising finance for projects when looking to take advantage of the positive trend in property sales.
Good returns on property investment
Now a company has been set up looking to bring the two together in what is hoped will be a mutually beneficial partnership. The idea behind website housers.es is to attract hundreds of investors willing to put up a minimum €500 each to either buy and reform property or invest in a promoter’s development. They get to choose exactly what project their money is spent on and then receive a share of the returns—potentially far more than is currently available from bank accounts.
Developers in turn have access to a different form of finance, one that offers an alternative to banks and reduces dependency on them.
It is early days yet, but housers.es has just finalised the financing of its first project. It has raised €80,500 to buy and reform a two bedroomed flat in Madrid in what is scheduled as a five year investment. The intention is to renovate the apartment and take rental income before selling it on at a profit—with the target price being €110,000. If all goes to plan, a return of 67.8 per cent is anticipated over the five-year period through a combination of rental income and capital gains.
Profits will be paid out monthly for rental income, or in a lump sum on the sale of the property.
Marbella is a property hotspot
We shall have to see whether crowdfunding really does take off when it comes to real estate, but the company has ambitious plans and is looking to raise €300million to invest in around 1,500 properties over the next three years.
For people looking to invest relatively small amounts in property it may be an interesting proposition, but it is not risk free. Fixed costs remain, for example taxes and fees for property purchase, plus the 12.5 per cent cut housers.es takes. For many people, more traditional forms of investment or simply buying a house or apartment in a hotspot like Marbella, and thus cutting out the middleman, may still be seen as the better option.
Marbella Direct has seen over the past few years how high value properties in and around Marbella, particularly villas and luxury apartments in areas like Sierra Blanca, the Golden Mile and Nueva Andalucía, are in increasing demand.
If you are interested in investing in these areas Marbella Direct has a selection of quality properties for sale with good rental potential; please contact us to discuss your exact requirements.