A solid real estate lending platform with exposure to Austrian and German property markets
|Total Investment Volume||€63m+|
|Average annual interest||6.2%|
|Who's eligible to invest||EU bank account holders|
|Investment Type||Real estate lending|
|Auto Invest Function||No|
|Website Language||English, German|
PROS & CONS
- Access to Austrian and German markets
- Diverse investment options
- A transparent and useful rating system and API
- Low availability of projects
- Manual investing comes with several constraints
- Relatively low interest rates
- There aren’t many options for English-speakers to invest in German, let alone Austrian, real estate. For example, Bergfuerst, which we included in our best European real estate crowdfunding platforms ranking, is available only in German, while most international platforms tend to skew towards the Baltic markets. Yet, real estate investments in the mature and stable markets of Vienna and Berlin are very lucrative and can easily constitute a cornerstone of a balanced portfolio.
- You can invest in two main project types – rental (Rendity Income) and development (Rendity Growth), which offer different time horizons and risk/return ratios – you can read more about both options below. Until recently, the lack of an auto-invest and early exit options when using the two products was a considerable downside, but Rendity resolved both issues by introducing a Savings Plan. It’s pretty much a fancy name for an (enhanced) auto-invest feature – you can choose your investment preferences and let the algorithm allocate your capital accordingly. As a bonus, you can also withdraw funds within 14 days, and invest from as little as €100.
- Although risk scores are not unusual in the P2P scene, their methodology can often be hidden and their credibility questionable. Mintos, for example, has often been accused of assessing many loan originators way too generously. Rendity’s rating system, on the other hand, is one of the most transparent and clear-cut I have seen. Projects are given points across eight categories such as location, development stage or developer’s track record, and assigned a risk rating between A (less risk) and E (more risk). Besides, Rendity provides an API (Application Programming Interface) feature, which can be integrated with third-party sites and applications to provide quick access to Rendity projects. Thanks to this, you can view active Rendity deals, including funding aim, return, duration etc., directly on the Rendity page at P2PMarketData.
- With 105 projects funded since October 2015, Rendity is not the most dynamic platform out there. You can expect between one and two new deals a month, and they tend to get funded quite quickly. It’ll therefore take time to build a well-diversified portfolio and either way, you might have to invest large sums into fewer projects than you'd usually do. The high quality of projects should offset the limited diversification though, while Rendity’s Instant Interest option helps you smooth out your returns and avoid cash drag to some extent as the interest accrues already during, and is paid out right after, the funding period.
- If you choose to invest manually – which until recently was the only option – you have to keep in mind the lack of a secondary market and a relatively high minimum investment threshold (€500). You can resell the rental investments after 24 months but that’s still a long-time horizon. With development loans, you have no other choice but to wait until maturity (up to 3 years).
- Don’t get me wrong – 6%+ returns are great given the maturity of German and Austrian markets. However, many investors might be used to and expect more in the P2P lending sphere, and the competition is fierce. Several real estate lending platforms, such as EstateGuru or Raizers, offer returns of 10% or even 12%.
Who is behind Rendity?
The three young founders – Lukas Müller, Tobias Leodolter and Paul Brezina, hold the positions of CEO, CIO and CFO respectively. None of them had a great deal of experience before launching Rendity but the excellent record over the 5+ years of running the company works very much in their favour. In the meantime, Lukas has started an investment management company and a co-working space in Vienna, Tobias has got involved in a law firm, and Paul seems to have taken up an academic career. The website also lists eight employees responsible for sales, marketing, stack development, customer support, etc.
What does Rendity offer?
The two main investment types on Rendity include:
- Rendity Income, which focuses on rental projects with relatively long maturities of up to 7 years (but remember – you can resell after 2 years). They offer to return up to 4% with quarterly income distributions. You can earn money via rent payments from the tenants as well as the appreciation of the property value.
- Rendity Growth, which includes development loans – these tend to be shorter-term (although not very short – typically between 18 and 30 months). They offer slightly higher interest rates (up to 7%) but you must be comfortable having the funds locked up for the entire period, as the principal is repaid at the end of the term. The loans serve to fund building new or renovation of existing property.
Within the Savings Plan, you can choose one or a mix of both investment options.
How much can you earn?
The average historical return stands at 6.2% and in general, you can count on returns between 3% and 7% depending on the kind of deals you invest in. Although this is very attractive for the respective markets, the offered returns are significantly lower than on many popular real estate lending sites such as EstateGuru, which might win over many high-return-seeking investors. I’m very curious to see how the returns from the Savings Plan will shape. You can also earn an extra €25 if you register using this link, and make another €25 for every friend you invite that joins and invests on the platform.
Who is Rendity best for?
Traditionally, Rendity used to be best suited for more conservative investors with long investment terms and high portfolio values. Several constraints including long maturities, high minimum investment thresholds and the lack of auto-invest option and the secondary market might have scared off investors who favour simplicity, liquidity and/or a hands-off approach. This, however, seems to have been resolved with the launch of the Savings Plan – now, even if you opt for high liquidity and auto-invest, you can take a bite from what Rendity offers.
How to invest at Rendity?
Registering on Rendity is very simple. Creating an account as an individual requires just an email and a password – you will only need to verify your identity (in line with the Know Your Customer rules) when you withdraw money from the platform. Another way to get hold of Rendity investment opportunities is to use EvoEstate, where you can invest in Rendity loans while also retaining access to EvoEstate’s secondary market and auto-invest feature. At the same time, you can diversify into offers of 15 other available loan originators.
Rendity is one of the most solid European peer-to-peer lending platforms. We have previously included it in our best real estate lending sites as well as best P2P lending platforms rankings. Since then, Rendity has expanded the offer with the introduction of the Savings Plan – it’ll be interesting to see how the demand for such a product will shape and what return it can bring. Savings Plan or not, Rendity gives you an excellent opportunity to invest in top-notch projects in Vienna and Berlin with attractive interest rates and stable income. It’s definitely worth including in almost any well-balanced portfolio.
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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
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