Real estate investment, traditionally, reserved for large estates, who could buy a hotel, a large office building or a shopping mall. Individuals can only make their savings profitable by buying a garage space or even a house. However, all these options required large previous savings, which was not possible for less than 10,000 or 20,000 euros, even if financed through a mortgage.
In recent years, investment has been democratized in the real estate sector, as in other markets such as the stock market. Now There are investment options on the market starting from 250 or 500 Euros. even less.
Socimis paved the way
This sociable (Listed Real Estate Investment Companies), sole purpose buy and then lease real estate assets and collect periodic rents. The tax formula looks like this: Reit international: they are required to be listed on the stock exchange, pay no corporate taxes, and distribute their profits to their shareholders through dividends.
The two largest companies in Spain are Colonial, which has office buildings in the best areas of Paris, Madrid and Barcelona, and Merlin Properties, which also owns offices, shopping centers, logistics warehouses and soon data centers. Both are available on Ibex-35 and have liquidity for trading, which allows individuals to invest in real estate from six or seven euros, the price of its shares. In return, a dividend with an annual yield of about 5% at the current price of the shares. Lar España is the third Socimi in terms of size and liquidity. It specializes in malls and parks and offers a higher dividend yield than its double-digit competitors.
The biggest disadvantage of such real estate investments is that, as they are listed companies, their value is subject to the value of financial markets, just like an electricity or technology company. Shares of this Socimis It has been trading on the downside since it broke out. The pandemic was in the first weeks of 2020 and never again recovered the values of 2019. On the other hand, analysts this could be an opportunity because companies trade at a discount to the value of their assets. For example, Colonial owns real estate worth €11.83 per share and is priced at just over €5 on the stock market.
Crowdfunding goes hand in hand with digitization
came with digitalization crowdfunding specializes in real estate for the real estate industry. It originally consisted of: partnering with an entrepreneur to develop a specific project, for example, buy land and build a housing development. Here returns are variable and will depend on the final profitability of the project. It is normally over 10% or 15% with annualized tickets that carry risks and start at 250, 500 or 1,000 euros.
They later evolved into what is known as lendingwhy lending to a developer to build or buy land. Here, the participants crowdfunding They issue a fixed rate loan that will repay the principal and pay interest at maturity. Depending on the risk for the investor, the return usually varies between 8% and 12% per annum.
The last job they attended is rent. In this mode, a group of investors buys an assetcommercial facilities up to now, leased to a brand, for example, to a supermarket chain. This allows them to receive periodic incomenormally every three months and for three to five years after the purchase, it gets back the invested capital when the asset is sold.
Housers was the first company to bring crowdfunding to Spain. later, Urbanitae became one of the most growing ones., with the support of major venture capital funds and even Andorran bank Andbank. In the heat of the growth of these platforms, others that are already fully entrenched in the market were born, for example: cityManaged by Rafael Merry del Val, former CEO of consulting firm Savills, or Other Funders.