You have a financial portfolio of varying size and, like most people, you want a profitable and secure investment? Beyond traditional savings solutions, there are several ways to invest your money for greater profitability. Real estate is one of those reliable investments not to be overlooked.
Enhancing Your Financial Portfolio: Everyone’s Business
Whether you have significant savings or not, it is essential to find the right investment solution to make the most of it. Risky investments or those made without thorough consideration are rarely good deals. When it comes to savings, it’s better to take the time to think and weigh the pros and cons to avoid unpleasant surprises.
Traditional Savings: A Low-Yield Solution
While savings accounts were a profitable investment in the 1970s, 50 years later, the fact is that savings no longer generate returns. Worse, a savings account can actually cost its owner money.
Indeed, with an average interest rate around 0.1% and banking fees also averaging 0.1%, the math is straightforward. But you also have to consider wealth taxes on these investments, around 0.4% in French-speaking Switzerland. Finally, factoring in the current inflation of about 0.6%, the conclusion is simple: it’s best to be wary of risk-free investments with returns that are at best zero or even negative.
Real Estate: A Profitable and Secure Investment
A real estate property is concrete and tangible; it cannot be lost or stolen. Unlike stocks, its value cannot collapse overnight due to an unexpected event. When done sensibly, real estate investment represents one of the most secure investments in Switzerland in the short, medium, and long term.
Real estate investment serves various purposes. It can help diversify your portfolio, prepare your estate, or make your money work for you through highly attractive returns. Indeed, real estate is a profitable investment that can generate average returns of 5 to 8%, whereas stocks yield less than 3% over time with a lower level of security.
Real Estate Investment Accessible to Everyone
Do you think real estate investment is reserved for the wealthy? That you need to have already built a significant financial portfolio to invest? Forget that idea—thanks to real estate crowdfunding, this profitable investment has become much more accessible.
What Is Real Estate Crowdfunding?
For several years, the Swiss real estate market has been opening up to a wider audience through an alternative financing method: real estate crowdfunding, also called participatory financing.
Crowdfunding is essentially a fundraising method usually conducted via a digital platform. It is well known for financing business or association projects, with many platforms existing worldwide. In the case of real estate crowdfunding, it involves collective investment in properties, generally for rental purposes. This is known as crowdinvesting.
Specifically, during a fundraising campaign for the joint purchase of a property, you are free as an investor to buy as many shares of the property as you wish. You then become a co-owner of the building alongside other crowdinvestors. Once the property is fully financed and generates income, you receive a share proportional to your investment.
What Are the Advantages of Crowdfunding?
There are many good reasons to get started with real estate crowdfunding. The first obvious advantage is that you become a property owner and gain access to a profitable investment, even with limited resources. Indeed, it is possible to participate in a project starting from an investment of CHF 20,000. Moreover, you benefit from the expertise of real estate professionals who manage the platform. You are thus assured that properties are carefully selected based on their potential. This allows you to access ownership even without in-depth market knowledge.
Additionally, like any rental investment, you receive monthly returns on your investments but with limited property management. You delegate the management responsibilities to a property management company. Since the property is shared, rental risk is spread out, reducing your potential loss of income in case of unpaid rent, for example. And if you want to exit and sell your shares? Waiting lists are maintained by providers, ensuring you can resell quickly.
To be a profitable investment, a real estate investment must be carefully analyzed, and market knowledge is essential. However, crowdfunding disrupts this reality by opening rental investment to a broad audience. Even as a novice, you can now benefit from the attractive returns of rental real estate without bearing all the risks.
