The leading European real estate lending platform with an impeccable track record
|Total Investment Volume||€357m+|
|Average annual interest||11.44%|
|Investment Fees||2% sec. market; €1 withdrawals|
|Who’s eligible to invest||EEA or Swiss|
|Investment Type||Real Estate Lending|
|Auto Invest Function||Yes|
|Website Language||En, Et, Lv, Lt, De, Ru, Fi|
PROS & CONS
- Outstanding track record
- Excellent transparency
- High and stable returns
- Restricted auto-invest features
- Diversification can be tricky
- No instant withdrawals
- EstateGuru’s quality and security standards are top-notch. The team investigates the viability and risk of each project before it’s released to investors and only 10% of all loan applications are approved. Every loan is secured through mortgages (97% are first-rank) and an average LTV ratio is below 60%. This helps to keep the default rate to a minimum (currently 3.7%). But that’s not all – the debt collection has proven very efficient as EstateGuru has so far never lost any investors’ money. Except for the brilliant loan book performance, the company itself has been steadily growing, generating profit, expanding to new markets and attracting venture capital (more on that below).
- Transparency is great on three levels. First, EstateGuru provides comprehensive performance statistics and financial reports, which lets you keep track of their overall condition. Second, there’s an abundance of information on each investment opportunity available for lenders, allowing you to have a full picture of the project you’re investing in. Finally, the communication is great. Unlike many platforms, EstateGuru keeps you informed after you have invested by sending regular updates about projects in your portfolio.
- Given the high-quality collateral, decent LTV ratios and, most of all, the almost perfect past performance, interest rates offered on EstateGuru are very juicy. The historical return of 11.44% is on par with other mainstream sites such as Mintos, but the first-rank mortgage offered by EstateGuru is arguably a much more solid security measure than any buyback guarantee.
- Anyone can use the auto-invest option, although its basic features are very limited – you can only choose the preferred loan amount, period and type. To unlock advanced selection criteria, including security, LTV, stage, interest, etc., you need to commit at least €250 into every single project.
- The €250 threshold for the (very useful) advanced auto-invest features is the first obstacle in achieving a good level of diversification. EstateGuru recommends a minimum of 25 projects to build a diversified portfolio. If you want to invest automatically, that would require at least €6,250 – given that an average EstateGuru portfolio is just above €4,000, many investors might be missing this target (or they invest manually). Another issue is the geographical distribution – EstateGuru offers loans from eight European countries, which sounds great, but as much as 93% of all projects are based in the three Baltic states. This somewhat constrains a good market coverage, but hopefully, more options from other countries will flow in the future.
- EstateGuru loans are rather long-term (average of 14 months), and there are several, albeit small, obstacles if you want to withdraw your money quickly. You need to hold each investment for at least 30 days. Then, you need to pay a 2% fee if you want to sell a loan on the secondary market, given someone is willing to buy it. A recent introduction of the tiny yet slightly displeasing €1 withdrawal fee is another hurdle on the way to get your money back into your bank account.
Who is behind EstateGuru?
The EstateGuru team is large and highly professional. The co-founder and CEO, Marek Pärtel has a long history in real estate and FinTech and is involved in the broader community as a speaker, angel investor and partner at several other ventures.
The company has successfully raised quite a lot of venture capital. Their last equity crowdfunding campaign on Seedrs attracted over €1.4 million and the one before over €900,000, both hitting over 250% of the target amount. According to Crunchbase, there have been four more funding rounds in the past.
The funding fuels EstateGuru’s expansion – outside the Baltic states of Estonia, Latvia and Lithuania, the platform has entered Spain, Germany, Sweden, Finland and Portugal, with the UK and Ireland to follow soon. EstateGuru works with other financial institutions too, to ensure smooth implementation of their services across Europe. To facilitate pan-European payments, they’ve teamed up with Lemonway. Besides, LHV Bank customers can get a quick and comprehensive overview of their Estateguru portfolios via LHV internet banking. EstateGuru, along with Coinbase, is the first service to be switched on to the platform.
What does EstateGuru offer?
You can invest in three main loan types depending on the financing purpose:
- Development loans are used to finance the planning process, the development, or construction of the property.
- Bridge loans are short-term loans, which help to meet the borrower’s current obligations before securing a permanent financing option or by increasing the value of the property or selling the underlying asset.
- Business loans serve to raise capital for supporting the day-to-day activities of the firm, business expansion, acquisition of equipment or goods, etc.
Loans can be further differentiated, depending on:
- Project stage. EstateGuru only lends against the current, not the future, value of the collateral. To facilitate the financing flow but keep the investment properly secured, they often fund projects gradually, “adding” funding as the value of the property (collateral) increases. Read more about EstateGuru’s stage loans here.
- Repayment schedule. Here, you have two main options: bullet loans offer periodical repayments of the interest and the principal paid back at the end of the loan period; full bullet loans involve the repayment of both interest and principal at the end of the loan period.
All EstateGuru’s loans are secured with a mortgage, regardless of the loan type. Duration of loans ranges typically from 6 to 60 months and there’s a good balance between loan types (development, bridge and business) as well as the underlying collateral (residential, commercial properties and land).
How much can you earn?
The average historical return stands at roughly 11.5%, but your returns will depend on how you build your portfolio. Interest rates on most loans oscillate around 10-12%, although you can find something on both the safer and the riskier side, with rates varying from 7.5% to 14.5%.
You can also make an extra 0.5% on your investments in the first three months after registration using this link. Keep an eye out on additional campaigns too – for example, earlier this year, the advanced auto-invest option was unlocked for all users from €50, instead of the €250 minimum investment amount.
Who is EstateGuru best for?
For everyone except very short-term investors. If your investment horizon is less than a year, you’re probably better off with a more liquid option, such as Mintos’ automated strategies with an instant withdrawal option. Otherwise, EstateGuru is, in my view, one of the best P2P investment options in the market, and including it in any well-diversified portfolio is a must.
How to invest on EstateGuru
You simply create an account and submit proof of identity and bank account details. Once this is verified, you need to go through the KYC verification and pass the appropriateness test. You add funds via a SEPA transfer or one of many payment options available (including Lemonway and Paysera), and then you can start auto- or manual investing.
EstateGuru is at the narrow top of the best P2P lending platforms in Europe, and I’ve already covered it in both the best real estate crowdfunding sites and best P2P lending sites rankings. Their history and track record are impressive. So are their statistics on loan volumes and the number of loans and investors as well as loan performance. With solid security, low default rates, no capital loss, and high returns, EstateGuru is highly recommended for almost any P2P investor.
At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.
When reviewing an alternative investment platform, we consider a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
- Management team
We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).