A few weeks ago, I received an annual statement from my bank of my savings account, where I have been putting away a small amount of my salary each month for some time. After seeing how little interest has been added this year, I decided that I would rather invest the money somewhere where I get more interest. After deducting the account fees, there isn’t much left.
In general, it’s never a bad thing to have a little cash cushion for emergencies. Therefore, a savings account definitely makes sense if you want to save a little bit, but not if you want to have an increase of money.
Last year, I already started investing a little bit in ETFs and cryptocurrencies like Bitcoin on eToro. This works quite well and I was already able to get a nice return with it, but ETFs and cryptos fluctuate very quickly and therefore I looked around for more investment options to make my money work for me without much effort.
What is P2P-Lending?
Peer-to-peer, also known as crowd lending, stands for “person to person” or “private person to private person”. This form of investment involves loans from one private individual to another. With peer-to-peer lending, there is no intermediary bank. Instead, some companies have now set themselves the goal of handling this intermediation. The main advantage over a bank is the elimination of high bank fees and the usually tedious bureaucratic effort.
I looked at several P2P platforms and options and compared them. In the end, I decided on the two platforms Bandora and Estateguru. I particularly liked the latter, so I would like to briefly describe Estateguru here.
Estateguru is a platform from Estonia, which specializes in real estate secured loans. The properties are located Through the platform, more than 2000 loans with a total amount of almost 300 million euros have been financed so far. All loans are secured by a mortgage and undergo specific risk analysis by a team of experienced real estate professionals before being made available to investors. The construction projects and borrowers are located in Estonia, Germany, Spain, Finland, Latvia, Lithuania, Portugal, and Sweden.
How to invest?
At Estateguru you can invest from as little as 50€. So, you don’t need a big capital to invest in a P2P loan and get returns. After registering on the platform, you can transfer an amount from 50€ to the account. I started with 100€ to get to know the platform first and then invested another 400€.
There are several real estate projects with all the information to choose from. Once you have decided on a project, you can invest in it. Of course, only with the maximum amount that you have previously loaded on his account.
After that, it can take up to two weeks until enough investors have been found to fully finance the loan. If in the time not enough funds or investors can be raised, then the amount is automatically posted back to his account. However, since I registered on Estateguru, this has not been the case yet. On the contrary, the loans are often fully invested faster than you can co-invest yourself. But for this case there is Auto-Invest.
Once the loan has been fully funded, the funds are released after a careful credit check of the borrower. The borrower repays amount according to the agreed schedule. As an investor, this can be viewed in his portfolio at any time. After full repayment of the borrower, the amount deposited by the investor, including the return, is released to his Estateguru account and thus it can be withdrawn from there or immediately invested in other P2P loans.
With the auto-invest function, you can automatically invest a specified amount on several real estate projects on an ongoing basis. This way you can’t miss any projects and you get a diversified portfolio. As soon as there is a new project on the platform, the Auto-Invest investments are made first and only then it is activated for the manual investment. Therefore, it is quite possible to miss out on a project without the auto-invest feature, as within a few hours the project has been fully invested in. After all, there are over It therefore makes sense to use the Auto-Invest function.
WHAT I LIKE MOST ABOUT ESTATEGURU
High return without fluctuation:
An average return of 11.5%. This is almost twice as high as my investments in ETFs. Further, these are fixed and do not change during the funding period.
Since the loans are secured by mortgages, I don’t think the risk is very high.
Before investing in a project, you can already see all the details about the construction project and financing. Even during an ongoing loan, one can always see the progress of the borrower’s repayment in his portfolio.
Even for P2P newbies like me, the financial terms are very well explained on the platform. I also recommend taking a look at the FAQs.
I currently have 1,000€ invested in 5 projects with a return of 10-12.25%. These have a duration of 12 months. I am very excited to see if everything goes according to plan and will definitely invest further.
Get additional 0.5% on your investments
You also have money lying around in a savings account and would prefer to get returns with it? If you also want to invest on Estateguru and enjoy returns, you can register here via this link and get an additional 0.5% on your investments in the first three months.
Dieser Artikel ist keine Finanzberatung. Es geht lediglich um meine Erfahrungen und recherchierten Informationen. Mehr Infos zu Estateguru finden Sie hier.