EstateGuru is one of the best real estate P2P lending platforms in Europe that lists property-backed real estate loans. When investing on this platform, you can expect annual returns as high as 11%. EstateGuru has a long track record of successful collaborations, which is only one of the many reasons to invest through EstateGuru. Check out the following review to find out more about this P2P lending platform and see whether it’s the right fit for your investment needs.
EstateGuru in Numbers
As experienced P2P investors, we know that not every P2P platform is as good as advertised. Looking at the platform's statistics will give you a good idea about its past performance.
|Investor's earnings:||+ €12 M|
|Total loan value:||+ €178 M|
|Amount of investors:||+40,000|
|Loss of investors' money:||0%|
|Average portfolio size:||€ -|
|Latest financial report||Report for 2018|
So, what are some of the key points to draw from the above table? Firstly, EstateGuru’s investor base is growing rapidly.
Secondly, EstateGuru has no problem finding new development projects to meet investors’ demands.
Finally, despite there being fewer investment opportunities on EstateGuru when compared to competitors like Mintos, we’ve never experienced any cash drag. It’s worth noting that this is in fact quite rare within the real estate P2P lending industry.
Cash drag defined: Cash drag usually occurs when there aren’t enough available loans on specific P2P lending platforms. Your uninvested funds don’t earn any interest during this period.
EstateGuru Referral Code
New investors on EstateGuru are eligible to receive a sign-up bonus. This is how the EstateGuru referral program works: program:
- 0.5% cashback bonus: After the first 90 days of registration, EstateGuru will give you an additional bonus of 0.5% from your average portfolio size
If you invested €1,000 on EstateGuru you’ll receive a €5 cashback bonus.
In order to claim your bonus on EstateGuru, you need to sign up with our link. No additional EstateGuru referral code is required. EstateGuru will be able to allocate your registration with our link and add the referral bonus to your account.
EstateGuru’s New User Requirements
In order to sign up on EstateGuru and invest into property-backed loans, you need to pass their new user requirements:
Much like EstateGuru’s competitors, you must be over 18 years old and have a European bank account in your name from which you’re able to transfer funds to EstateGuru.
If you don’t have a bank account yet, we recommend N26. We use this bank ourselves when testing various P2P platforms and we’ve never experienced any issues at all. The transfer of funds usually takes no longer than one or two days.
EstateGuru allows investors to sign up and invest from all over the world. Even though the P2P lending platform is mainly targeting investors from central Europe, the investor base from the UK as well as the U.S. is constantly growing. In fact, EstateGuru offers significantly higher returns than most of the P2P lending platforms from the UK or the U.S., which makes it an attractive alternative.
Risk and Return
When evaluating the risks behind using individual P2P lending platforms, it is important to complete a general risk assessment and look at the safety of the platform.
Most EstateGuru investors work manually and therefore inspect every single project prior to investing. This is best practise as it’s good to look at certain key numbers when choosing your investments.
The ‘€50 per project’ rule
When we invest on EstateGuru, we usually invest the minimum amount into each project, which is €50. This helps to diversify our portfolio and minimize the risk.
The higher the LTV the higher the interest rate
We also look at the loan to value (LTV) ratio. EstateGuru doesn’t list any development projects with a higher LTV than 75%. If we decide to invest into a project with an LTV of 75% the interest should be higher than most other projects with a lower LTV. This isn’t carved in stone, but this strategy helps us to decide whether the investment is worthwhile.
Development projects are often financed in stages. This is a common practice within the real estate industry. It’s important to note that investing in stage loans isn’t going to help your diversification as the risk of default is not diversified when you invest in another project.
Borrower’s track record
One of our favorite features on EstateGuru is that you, as an investor, can view the borrower’s previously funded EstateGuru projects. Many real estate developers use EstateGuru to finance multiple projects. This feature gives you an idea whether the borrower knows the industry and whether they could pay back their previous loans.
The type of collateral can play a big role when deciding which project to fund. In most cases, EstateGuru is listing development projects, secured by a first-rank mortgage. There are, however, a few projects that are secured by a second rank mortgage. In that case, you have a significantly higher chance of working with bad debt and the borrower being unable to repay the loan.
When choosing your investments, you’re able to include the location of the development projects. Ask yourself the following location-based questions before choosing your EstateGuru loans:
- In which country is the loan based? Is the project based in a country that has similar debt collection laws to your own?
- And in which specific location? Is the project based in a metropolitan area or in the outback? This is important to note as the specific location of your project will affect the drop in value during a recession.
Is EstateGuru Safe?
Considering the safety of the companies you’re investing in is of utmost importance when working with P2P platforms. While you might have invested in stocks without much consideration of the safety of the companies you’re investing in, successful P2P investors always look into the financial history of the businesses taking out loans.
But how do you find out which companies are safe? You talk to people that are in charge of the due diligence.
We personally met up with EstateGuru last summer to get more insights into their risk assessments and we found that they are using similar risk models to those used by banks. The difference between a bank and EstateGuru is that the P2P lending platform takes a wider look at the real estate project as well as the borrower.
As a result of their cautious process, EstateGuru has never lost any of their investors’ money to date.
This doesn’t mean, however, that borrowers haven’t ever faced issues when it comes to paying back loans. Instead, it’s EstateGuru’s automated processes that helps retrieve money as fast as possible. The process of debt collection is very effective, and in fact, most of the borrowers do everything they can to pay their loan in time.Here is one of the EstateGuru projects that we had the chance to visit last summer in Tallinn.
Having a real estate developer borrow your money is very different to a private consumer who has taken out a loan to finance a car or any other consumer goods. Developers, particularly in the Baltics, need to keep their reputation positive in order to secure financing for future projects. Late payments or defaults might have a negative impact on their future, which is the reason why many borrowers on EstateGuru pay on time.Here is a sneak peak into our EstateGuru portfolio. Eventhough we have currently two loans with the loan status "default", it does not mean that we will not retrieve the money back. So far all the loans with this status were paid back.
In conclusion, we can’t guarantee that you won’t lose money on EstateGuru, however, if you diversify properly and invest in multiple projects that are backed by a property, the chances are very slim.
EstateGuru is our favorite platform when it comes to real estate investing through P2P lending. Investors can choose between investing manually or automating your investments. This is great for anyone who doesn’t have time to evaluate every single project but prefers to diversify based on a few basic preferences.
While the Auto Invest feature on EstateGuru can be used by anyone, advanced diversification options are only available to those who invest at least €250 into one single project. Basic diversification options aren’t very useful as you can only define the loan amount, period and type.
Advanced diversification allows you to choose the preferred security, LTV, stage and interest.
Apart from the Auto Invest, every single project has a thorough description. When compared with platforms like Monethera or Crowdestor, EstateGuru’s project descriptions are always on point and include all of the data that EstateGuru has ever gathered about the borrower.
This is particularly useful when investing manually and evaluating individual projects.
Liquidity Rates on EstateGuru
Now it’s time to look at how fast you can withdraw money on EstateGuru.
A lot of investors don’t think about the liquidity when choosing their P2P lending platforms, however, it’s really important to bear liquidity rates in mind. With EstateGuru you usually commit your money for at least 12 months. There is, however, the option to use the secondary market and cash out before the end of your investment period.
EstateGuru's Secondary Market
The secondary market on EstateGuru is a marketplace for investors who want to sell their claims to other investors and against the borrowers. Sellers and buyers should know that this isn’t a trading platform and that investors who sell their investments will be charged a 2% fee. Buyers also cannot sell their claim within 30 days after purchase.
Please note that you can only sell your claim on the secondary market if there is a buyer interested in purchasing it. When doing this, you’ll have no way of knowing how long it will take to sell your claims or whether anyone is interested in buying them at all.
This isn’t the case with platforms such as Crowdestor or EstateGuru, where the loan period is on average around 12 months. EstateGuru does, however, give you the ability to sell your claims on the secondary market for a discounted price.
We think that the flexibility of being able to withdraw your money earlier than you’d anticipated is worth the 2% hit your money will take, especially when you compare EstateGuru’s fee to Envestio’s ‘buyback guarantee’, which basically does the same thing.
EstateGuru’s Customer Support
Customer services teams are the faces of every P2P lending platform company, and EstateGuru is no exception to this rule. At some point during your investment journey, you’ll have certain questions that you’ll want quick and competent responses to.
When we reached out to EstateGuru to verify information or explain certain features in more depth, we were very impressed with the help we received. Not only did the team respond within 24 hours but they were also keen to meet up with us during our trip to Tallinn to show us some of the projects they were working on.
There aren’t many P2P platforms in Europe that are as transparent with their investors as EstateGuru. We’re certain you won’t be disappointed with EstateGuru’s customer support.
EstateGuru Review Summary
Our EstateGuru review should have given you a good idea as to whether investing on this platform is right for you.
EstateGuru is a great platform for anyone who is looking for secured P2P investments for a minimum of 12 months. Looking for short-term P2P investments? You’re better off going with Mintos or PeerBerry.
Since using this platform we’ve also found that most investors earn more than 11% per annum from their property secured investments; there is no unusual cash drag; and you can automate your investments with the Auto Invest feature.
Overall, EstateGuru is incredibly professional and reliable. We have been investing in the platform for several years without any issues. If we encounter any problems in the future, we will make sure we update this EstateGuru review so to keep the information accurate.
If you need more reasons to invest, sign up now and get yourself an additional cashback of 0.5% from your investments during the first 90 days.
Ready to do this?
What is the difference between bullet and full bullet loans?
The interest for full bullet loans is paid in full at the end of the loan period. Meanwhile, the interest for bullet loans is paid according to the loan contract, which could either be monthly or quarterly.
What is LTV?
LTV stands for Loan to Value. In the real estate niche, this represents the ratio of the loan to the estimated value of that property on the market. Most of the loans listed on EstateGuru have a loan value of 65%.
Should I invest on EstateGuru?
You should invest on EstateGuru if you are looking for P2P investments secured by a property, annual returns of more than 11%, automated investment strategies and a secondary market.
Is investing on EstateGuru safe?
Investing on EstateGuru is generally safer than investing in the stock market, investing in funds or even investing on other P2P lending platforms that list unsecured loans. Your investment on EstateGuru is backed by a property and therefore real value.
|Address:||Tartu mnt 10/Pääsukese 2 Tallinn, 10145, Estonia|
|Phone:||+372 6412 777|
|Social Media:||Facebook, Twitter, LinkedIn, Instagram|