5 P2P real estate lending platforms to earn upto 15% per year

computer screen showing p2p real estate method
pic credit: Google Images

In this article, you will learn how you can earn between 7% to 15% interest per year by investing in real estate-backed loans starting from just €50. If you have ever dreamed about becoming a real estate investor but do not have enough money yet or do not want to deal with all the hassle of investing in real estate properties, this article is for you.

Alright, so let’s first give you a bit of context. In this article, we will cover the currently best P2P real estate platforms, where you can invest in real estate-backed loans with a minimum amount of only €50.

Why You Should Invest In P2P Real Estate Backed Loans

Why the hell would I invest in P2P real estate backed loans, you might be asking? Well, there are a few good reasons to do so. All of the platforms I will be mentioning today provide an attractive annual yield, from 7% to 15%, which helps you reduce the impact of inflation and save up some additional money.

As a retail investor, you can simply sign up on one or multiple platforms, deposit funds, and invest in loans from various countries. The only requirement is to be over 18 years old and have a European bank account which you can get for free with Wise.com or Revolut.

After you have completed your verification, you can browse through the available investment opportunities or use pre-defined investment strategies based on your risk tolerance. That’s a super easy and fast way to get started. You don’t necessarily have to be an investment geek to begin earning money on your investments.

Still, if you have the time to educate yourself about some risk aspects, you can increase your return and lower your risk. Remember that all of your investments are backed by a mortgage which by default is one of the safest securities in the P2P lending space. Even if the loan defaults, there is still a physical asset backing the loan amount, which means that the risk of losing money is greatly reduced.

While P2P real estate lending is not risk-free and this is no investment advice, investing in mortgage-backed loans is a good option for risk-cautious investors who just want to get a decent return on their money.

Before I introduce you to some available options, here is a quick disclaimer. The following platforms are carefully picked for you based on historical performance, our in-depth research and investment experience, my personal visit to the platform’s headquarters, and countless interviews with the management. It’s certainly not just a random list of platforms that pay the highest rates. Alright, so without further ado, let’s dive into it.

P2P Real Estate Lending Platform Statistics

P2P real estate landing platform comparision table
Screenshot by Comprehensive minds

Here is a quick overview of relevant historical data you should know before joining any mentioned platforms. The funding volume gives you a good overview of the size of the company and its ability to raise funds. Platforms with higher funding volumes tend to operate longer, so the management is typically more experienced, and more investment opportunities are available.

The historical default rate represents the percentage of loans the borrower could not repay according to the agreed repayment schedule. Remember that those loans are still in recovery, meaning EstateGuru is restructuring the loans or liquidating the collateral, which is a mortgage in this case. Bad debt represents a loss for investors, and the average return stands for the platform’s historical average yield.

The next column gives you an idea of which countries you can invest in on a dedicated platform. When it comes to security, all investments are backed by a first-rank or second-rank mortgage.

EstateGuru

EstateGuru is a well-known p2p real estate platform from Estonia. The crowdlending site offers by far the most projects per month when compared to other listed platforms. EstateGuru makes it possible for you to invest in real-estate-backed loans from eight different countries for just €50. That’s a very low minimum investment amount for anyone who is keen to earn 11% interest per year.

EstateGuru is the best platform in the P2P real estate category. All the investments are secured by a first-rank mortgage and you get independent appraisal reports with tons of information about the borrowers. Their business model is very straightforward.

EstateGuru loan portfolio graph
Screenshot by Comprehensive minds

The historical performance over the years is very good with a low default rate and almost no loss of capital. Considering the fact that EstateGuru has funded loans worth €600 M it’s a very impressive track record. The platform is offering investment products such as automated strategies, custom auto-invest, or manual investment options, which means that it’s suitable for passive as well as active investors.

EstateGuru’s secondary market and the early exit option enable you to exit your investments should you need your money back before the end of the loan term. EstateGuru is by far the most secure platform from a legal and regulatory point of view. So if you are really someone who is very much risk averse, EstateGuru is a great fit for you.

It’s also the highest-rated platform on P2P Empire, which makes it the benchmark in the P2P lending space. I have been also investing for almost five years on the platform with no loss of capital and stable annual returns.

Reinvest24

Reinvest24 is a smaller less-known p2p real estate platform from Estonia. The company has three main products, real estate-backed loans in Moldova, development projects in Estonia, Latvia, and Spain as well as rental deals in Estonia. In the past, there has also been a project from Germany and Switzerland.

The platform is mainly known for its high yields. Reinvest24 often offers up to 15% interest per year for investors that decide to invest in the listed real estate projects. The minimum investment amount on Reinvest24 is just €100, which makes it easy for anyone to join the platform. While there is no Auto Invest, investing in the primary market takes just a few minutes.

The loan term is typically around 12 months, meaning you don’t need to commit your money for too long. The platform also offers a secondary market in case you decide to exit your investment before the end of the loan term.

REINVEST24 total projects funded MOM
Screenshot by Comprehensive minds

While the platform has been able to deliver on the advertised return and has to date no defaulted project, you won’t find many appraisal reports, meaning you won’t be able to determine the market value of a property unless you are a real estate expert in the dedicated market.

On the bright side, the track record is really good. Most of the projects are backed by a 1st-rank or 2nd-rank mortgage. If you are ready to commit your capital for a longer term, it’s worth exploring some of the available rental deals and benefitting from the capital growth of those properties.

Max Crowdfund

The next platform on this list is Max Crowdfund. This is a real estate crowdlending platform from the Netherlands. Max Crowdfund is mainly offering real estate projects from the UK as well as Germany. In terms of loan volume, it’s similar to what Reinvest24 has funded so far. The average net return is, however, lower at 8.7% per year.

The real estate loans on Max Crowdfund are backed by a first-rank mortgage and you can start investing with as little as €100 per loan, which makes it very attractive for beginners who are not yet ready to commit a larger sum of money. Investing in the platform is very straightforward. Currently, the platform only supports manual investments, meaning you have to click on a dedicated property and read through the terms before you invest.

There is no secondary market available, meaning you will not be able to access your money before the loan is repaid. As of right now, the platform has a 0% default rate, meaning that none of the investors lost a single Euro, which increases the trust in Max Crowdfund’s services.

InRento

Moving on to InRento, which is a relatively new P2P real estate platform with a focus on rental properties in Lithuania. InRento was launched with the goal to provide attractive monthly cash flow for investors who are looking to earn money from rental properties. The platform offers two different yield types.

One consists of fixed rental yield as well as fixed capital gain, meaning you know exactly what type of returns you will receive. And the second option comes with a variable rental yield based on occupancy as well as a variable capital gain factor. This means that you can potentially get a much higher return on your investment as the prices of real estate properties in Lithuania tend to grow more than what is offered as fixed capital gains in the previously discussed option.

InRento is a promising platform. The company is fully regulated by the Bank of Lithuania and investors get their unique IBAN account which means that you are not even transferring money to InRento but to your own bank account which is connected to your investment account. This is a feature that increases the safety of your uninvested funds.

There is no auto-invest but there is a secondary market so you can exit your investment whenever you need your money back. The average promoted return on InRento is 7.96% per year. Keep in mind that this can be much higher for investors who invest in rental deals with variable capital gains.

There have been two exits already, where investors earned on average 19.49% per year. That’s an excellent return on investment, especially considering the fact that your money is backed by a first-rank mortgage.

There is no doubt that InRento is a suitable alternative for risk-aware investors who love to invest in real estate and earn rental income. What’s a bit of a bummer for some of the investors is the minimum investment amount of €500 and the fact that by default InRento is withholding taxes on your earnings.

Luckily for non-Lithuanian residents, there is an option to reduce the tax that InRento is withholding from 15% to either 10% or 0%.

DAS-1 form filling procedure
Screenshot by Comprehensive minds

In order to get a reduction in the tax rate, you have to fill out a DAS-1 form and provide proof that you are a tax resident in your country. You can download the form directly from InRento and send both documents to the team to apply the lower rate.

This is valid for all investors whose countries have a double taxation treaty with Lithuania. Whether your tax rate will be reduced to 10% or 0% depends on the country where you are a tax resident. If you reside in Latvia, Cyprus, or the United Arab Emirates no tax will be withheld. If you reside in the following countries, you can get a tax reduction of 10%.

Also, if your country has a double taxation treaty with Lithuania, which most countries at least in the EU have. You declare what you have paid in Lithuania and then pay just the balance between what you have already paid and the amount you are supposed to pay in your country.

There are however a lot of country-specific laws which means that this is definitely no tax advice, and I suggest consulting a tax expert in your area to be on the safe side.

Profitus

Alright, so the last platform worth mentioning is Profitus. This is a regulated P2P real estate platform based in Lithuania. The average return on the platform is about 9.68% per year and all of your investments are backed by a first- or second-rank mortgage.

Profitus offers an auto investment as well as a secondary market which means that you can automate your investments as well as sell your investments if you need to withdraw money before the end of the loan term. What’s worth mentioning is that Profitus is currently only focusing on real-estate-backed loans from Lithuania.

The platform has an excellent track record with 0 loss for investors. Like InRento, Profitus is also withholding taxes but you can reduce the tax rate with the same procedure as mentioned earlier. If you are interested in earning passive income by investing in well-performing real estate-backed loans from Lithuania, you can use the promo code P2PEMPIRE to get a 50€ investment bonus.

Things To Consider Before Investing

Now that we have covered some of the currently best P2P real estate platforms, let me briefly share with you some of the things to consider. Keep in mind that in order to be eligible to invest on any platform, you have to have a European bank account to be able to deposit funds on the p2p real estate site.

Investing in real-estate-backed loans is certainly more suitable for investors who have a longer investment horizon. If you are looking to deploy your money for less than a year, it’s not really worth it. Remember that when investing in real estate loans, you are often receiving the interest at the end of the loan term. There are only a few rare occasions when you get the interest monthly or quarterly.

That’s one of the differences between the mentioned platforms and other players from the P2P lending industry such as Esketit or PeerBerry where the interest is added to your account every month. You should also be aware of certain risks that can materialize.

Investing in real estate loans from Moldova comes obviously with different risk factors in comparison to rental deals in Lithuania for example. The beauty of P2P real estate platforms is that most of them are regulated and the business model is comprehensive.

There are no third-party loan originators and unreliable buyback guarantees, which is also the reason why this investment category is likely the safest in the P2P lending world. But that’s just my opinion, let me know in the comments below what are your thoughts on the mentioned platforms.

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