Crowdfunding Is the Newest Way to Invest in Real Estate

8 January 2018

Housers is a Spanish start-up that arrived in Portugal last year, attracted by the real estate boom. Anyone can invest: the minimum is just 50 euros.

A 49-square-meter one-bedroom property in Campo de Ourique kicked off the collaborative purchase of homes in Portugal. The small apartment on the Rua Maria Pia sold in 20 days to not one, but 453 new owners. The excellent moment that the Portuguese real estate sector is experiencing has put the country on the map of international investors. The difference in this transaction in relation to the traditional models of acquiring homes for resale or allocation in the rental market is that in this case, the acquisition was made through crowdfunding or collective financing.

This first deal was led by Housers, a start-up that began operations in its home country, then invested in Italy, and has now decided to bet on the Portuguese market. The firm was attracted by the sector’s growth, where sales in Lisbon and Porto grew by 30%, according to preliminary data published by APEMIP. Prices accompanied the increase in sales.

Some Portuguese and international investors also look to the real estate market as an alternative investment for their savings – and the Brazilians lead the pack in this regard.

In its first operation in Portugal, Housers managed to raise 193,000 euros in less than a month. The property was acquired by 453 investors, of which 4%, around 20, were Portuguese. The average investment was approximately 400 euros, but the minimum investment is 50 euros. Half the buyers were Spanish: “At that time there were practically no Portuguese buyers. Our investor base was very Spanish – and the Spaniards, because of their proximity, know Lisbon well – so it was one of the best project starts we’ve had, João Távora, the head of Housers in Portugal, revealed.

For this initial investment, the real estate fintech set the annual net return for the investment at 4.05%, predicting a total return of 36.37% by the end of five years (the timeframe the company expects to rent the apartment before an eventual resale). The return, the executive in charge of the operation, is inviting when compared to the meagre interest rates offered by other, more traditional financial investments. “Real estate has always been relatively safe, there are peaks, but it has a great advantage over other products or financial investments such as stocks. Its value will never go down to zero,” Mr Távora asserted, justifying the investors’ interest in the deal. Their Spanish investors are especially aware of the consequences of a real estate bubble.

In Portugal, the company expects to attract more investors. Currently, the fintech firm already has 800 to a thousand Portuguese investors, out of a total of 73,000. “Our objective is to attract 11,000 local investors by the end of 2018,” he said, detailing that the analysis points to growth in the Portuguese real estate market over the next three to five years, during which period they want to continue investing in new real estate projects, diversifying their investment base in Portugal, and increasing the points of potential interest for possible investors. “We are looking for real estate to invest in, and Lisbon is our most significant area of interest in Portugal,” he stated. Porto is in the firm’s plans, but it has yet to find the ideal property that will kick-start its operations in Portugal’s north.

With rising prices in the capital and some housing shortages in the city centre, Housers’ focus is now on Graça, Ajuda and Penha de França. By the end of the year, Housers wants to finalise the sale of 12 to 15 properties in the country. But investors on the platform can also choose projects in other countries. “The idea is that investors can invest wherever they want, diversifying their risk, both regarding products and real estate markets.”

Original Story: Diário de Notícias – Ana Margarida Pinheiro

Photo: Global Imagens

Translation: Richard Turner