Real estate can be a great source of passive income.
An interesting investment given the good return and relatively limited risk.
There are a lot of advantages to it, but also snags.
Investing in it, for example, seems only reserved for people with a lot of money in the bank.
But that is no longer true.
You can start with just 50 US dollars .
Real estate is the ideal way for many people to generate passive income. It is therefore a smart investment. The underlying asset, the property, is very stable in value. This ensures that the risk is limited because you can always resell the property.
In fact, the value of houses continues to rise over the years. This will certainly continue for years to come with the current housing shortage. So that is already the first profit you can make.
In addition, the direct return is also interesting, because you rent out the property and you can often ask a lot for that in the private sector. For example by renting out a building as student rooms. Especially when you calculate this back to a percentage return on your investment. So you receive the increase in value + the rent, which is double the return .
But just buying a house and then renting it out is not something you do just like that. That involves a lot of money . Tons, that is, and not everyone has them lying around. And financing for applications is often difficult and, moreover, not attractive. For example, you only receive mortgage interest relief for your own home, but not for such an investment. If you already get a loan for it.
You also invest in one property that you buy. So you don't have any spread of risk. What if something turns out to be wrong with that house? Or the neighborhood is deteriorating? Or nobody wants to rent it? Etcetera etcetera. Then you enter the ship. In short: you should only dare to do this if you are already really rich.
If you are not yet, there is a way out, namely crowdfunding . There are special platforms with which you can invest in real estate projects from small amounts. Below we mention the two best in our opinion. One in NL, one outside. This is because the returns differ considerably between the Netherlands and abroad. A third and final option is to invest indirectly through special investment funds and ETFs.
We start with real estate projects abroad. Simply because they often have higher returns . Why? Because they are located in regions that are in considerable economic development, especially the Baltic States (Estonia, Latvia and Lithuania) you often see them here.
The best platform for this is Estateguru . They issue loans for real estate projects in the aforementioned countries, but also Finland and Spain. The return you get on your investment is around 12-14% , which is not bad. You have to put in at least 50 US dollars per investment, that is manageable.
The advantage of this way of investing is that there is a real underlying value, namely a physical building. So in the worst case that the person who takes out the credit can no longer pay, this property can always be sold so that you still get your money and return.
Of course you also have this advantage in your own country. The disadvantage is that the return you get is a lot lower , namely 4 to 5% and that the minimum investment is also higher , namely a thousand US dollars. The best platform for this is Exporo at the moment.
Exporo does the same as Estateguru but in Germany and the Netherlands. Especially with our eastern neighbors by the way. Furthermore, the way of working is identical, although here you are dealing with a company based in NL and also customer service in our own familiar language.
The extra interesting thing at Exporo is that they themselves rent out the buildings after construction and that they often already have tenants before they set out an investment round. This provides extra security for the return.
The third option is not to invest directly in real estate, so not yourself or via a crowdfunding platform, but indirectly as an investment in specific shares or funds . By the shares we mean that you buy them from specific companies that specialize in the field of real estate. Think of Wereldhave, Unibail Rodamco, Eurocommercial Properties or Vastned Retail to name just a few examples.
A slightly safer and easier way to do this is through funds or ETFs. There are real estate funds that you can buy in which a large number of similar companies are represented. Because you automatically spread over multiple investments with an investment fund or ETF, you have less risk.
Whichever option you choose, use the best online broker in the Netherlands for this , and that is Binck Bank . They have an award-winning investment platform and low transaction and service costs. And all the mentioned ways of investing indirectly in real estate are both on.
The difference is that you are investing here and no longer necessarily invest. There is therefore no underlying asset and no fixed return. So always ensure a good spread and a diverse portfolio of investments.
You have now taken several options for how to invest in real estate, even with little money . Time to determine which ways suit you. Do you prefer a platform or a country? Above all, try out multiple methods and also providers at the same time, because that is another way of spreading risk.