“... real estate is the foundation of wealth.” – Theodore Roosevelt
Indeed, real estate is a tangible, stable, and profitable investment but it has not had the reputation of being accessible to everyone. This privileged investment has long remained out of reach for the general public.
For several years now, an alternative financing method has been establishing itself in the Swiss market, enabling a true democratization of investment: real estate crowdfunding.
Let’s review the good reasons to get started with real estate crowdfunding.
A Simple and Transparent Model
Co-ownership Acquisition
As an investor, you become a co-owner of a fraction of the building proportional to your investment. You decide the number of shares you want to acquire based on the amount you wish to invest.
Your name is registered in the Land Registry as a co-owner of the selected building, always corresponding to your share of participation.
Property and Co-ownership Management by the Provider
You don’t have to worry about anything!
The selection of properties is carried out by platforms that apply numerous criteria before offering them to their investors. These platforms are often managed by real estate professionals with extensive experience in their respective fields.
The day-to-day management of the building is delegated to a property management company responsible for rent collection and building maintenance.
The administrative aspect is also handled internally.
As a co-owner, you have the opportunity to participate in decision-making related to the management of the building during the general assembly and to vote in proportion to your share in the property.
Rental Yield Paid Monthly to Investors
You receive your returns in your bank account each month, accompanied by a management report detailing your income and expenses.
You benefit from net rental income from which all charges have already been deducted (building expenses, mortgage interest, management fees, insurance, etc.). Only the tax liability remains your responsibility.
A true transparency of costs and management is guaranteed.
Potential Capital Gain Returned Upon Resale of the Property
Waiting lists of investors are created for those wishing to buy shares from exiting investors. You then have the possibility to sell, at any time, all or part of your co-ownership shares with a potential capital gain.
The provider organizes this list and finds a buyer who will purchase your shares, taking your place within the existing co-ownership. Bank fees for early exit may apply, but this is done without additional penalties from the platforms.
Real Estate Investment Now Accessible to Everyone
Investing in real estate in Switzerland is not an easy market to access. Several barriers persist, making real estate investment a solution reserved for the wealthiest, institutional investors, or insiders.
Thanks to real estate crowdfunding, the platform allows you to be exempt from these restrictive elements:
Initial capital contribution;
Coordination of various stakeholders;
Legal framework.
You are now able to invest at your convenience in profitable income properties chosen by you, which will allow you to build a real estate portfolio.
The Advantages of Co-ownership Compared to Real Estate Funds and Condominium Ownership
Real Estate Funds
A real estate fund is a collective investment vehicle whose assets consist of real estate properties, held either directly (through buildings) or indirectly (through companies). In other words, a real estate fund is a mass-market product where the collected funds are invested in real estate. The funds are managed by professionals who charge annual management fees to investors.
However, the popularity and demand for these real estate funds in Switzerland are beginning to meet their limits. The most sought-after funds show agios (purchase premiums) of 100%, which is double their net asset value. Such an investment therefore presents a considerable risk and theoretically, it will take many years before an investor can realize a return on their investment.
It is in this context that real estate crowdfunding revolutionizes the real estate investment process by making it accessible to the widest audience and by sparing you the risk of paying agios.
Discover the difference between crowdfunding and real estate funds through this comparison table
What’s the Difference with Condominium Ownership (PPE)?
Condominium ownership (PPE) grants the owner an exclusive right of use over a specific part of the building, namely an apartment.
In crowdfunding co-ownership, owners hold a fraction of a building composed of several apartments, which significantly reduces rental risk in case a tenant leaves.
A Simple Investment Process
This trendy new concept has been designed to turn a complex process into a simple action.
Invest in a simple, accessible, and secure way:
Online registration;
Subscription to the real estate project that suits you;
Data analysis and verification;
Signing and notarization;
Finalization of your investment.
Then, all you have to do is collect your income and recover your initial investment at the end of the subscribed period!
As you can see, real estate crowdfunding is an investment within your reach that will allow you to grow your savings.
