Crowdhouse.ch is Swiss real estate crowdfunding platform that allows individuals to acquire shares of rental buildings. The platform, which went live in late October, aims to gather several small investors and allow them to become co-owners of a property by investing a minimum of CHF 25,000.
According to co-founder and CEO Robert Plantark, the idea is to give small investors the opportunity to invest directly into the Swiss real estate and earn revenues from both rental stream and the appreciation of the property itself.
Plantark and his co-founder Ardian Gjeloshi both worked several years in the real estate industry prior to launching their startup. With Crowdhouse.ch, the two entrepreneurs want to solve the inaccessibility issue of the Swiss real estate, Plantark told the audience during a Startup Grind presentation in Zurich.
Unless investors have “have several millions to buy big properties,” real estate in Switzerland is mostly inaccessible to the masses, he said, something that Crowdhouse.ch wants to change.
Properties are first subjected to due diligence and are checked by real estate specialists in terms of sustainability and rental potential. Once an investor acquires shares, he or she is registered in the Land Register and can perceive rental income based on his or her investment.
The investment period is usually five years, after which the property is sold at the best possible price. Investors are then repaid the amount they had invested, plus potential capital gains on the appreciation of the property. Ideally, an investor can expect a return of between four and six percent, Plantak told 20 minutes.
As of its revenue model, Crowdhouse.ch charges a broker commission as well as a property management fee.
Crowdfunding in real estate
In 2014, crowdfunding in real estate raised over US$1 billion, according to CNBC. In the US, leading platforms include Realty Mogul, Property Moose and Fundrise.
“[Crowdfunding in real estate] is absolutely catching on,” Jiliene Helman, founder and CEO at Realty Modul, told CNBC.
Following the 2007/2008 global financial meltdown, people started loosing faith in traditional financial institutions. Consequently, as investors became more conscious with how they spend their money, crowdfunding became attractive as it provided opportunities suitable even for recession periods, Helman explained.
On Realty Modul, investors can pool their money starting from US$5,000 per individual. Return for investments varies on risk level, but Helman estimated it can rage from 7% to 20%.
The platform has already 17,000 active institutional investors who have invested more than US$80 million in over 250 estates since it went live in 2013.
Image credit: House key, Shutterstock.com.
