EstateGuru Review 2020
Is EstateGuru a great platform for real estate crowdfunding? Find out in our EstateGuru review below:
EstateGuru is an excellent platform with a great track record going back to 2014. They only have very few loan defaults, but no loss of capital (due to the use of collateral). The company behind the platform became profitable in 2018. Looking at a downside, you can only fully use the auto-invest feature if you plan to invest a minimum of €250 per loan. If you at a later point wish to exit the platform, you can do so by reselling loans on Estateguru secondary market. However, doing so will cost you a 2% fee. The platform is best for larger investors.
It’s free to use the platform.
Last updated: October 17, 2020
Introduction to our EstateGuru review
Are you considering investing through EstateGuru? Then read on. We’ve written this EstateGuru.co review to help investors determine if EstateGuru is the right choice for them.
Below you will find an overview of the things that we will discuss more in detail in this EstateGuru review. Simply click on the links to jump directly to the thing you want to know more about.
Learn about this in our EstateGuru review:
What is EstateGuru?
EstateGuru is a European real estate crowdfunding platform. On the platform, you can invest in secured property loans.
EstateGuru OÜ, which is the company behind the platform, is based in Tallinn, Estonia. The company was founded in 2013, and about a year later, the platform launched in the autumn of 2014. Since then an ever increasing amount of investors have decided to join the platform.
At present, more than 61,000 investors have registered on the platform and receive an average return of 11.60%.
It is possible for investors to start investing on the platform with as little as €50.
How EstateGuru works
EstateGuru has a two-sided marketplace platform.
On one side, they are attracting real estate projects that need funding. They then offer them loans with up to loan-to-value (LTV) of up to 75%. This means that if a project owner wants to borrow €750.000, they should be able to offer a collateral object value of €1.000.000. However, the typical loan on the platform is much lower than the LTV of 75%.
It is possible for EstateGuru to provide this funding up to five times faster than if the project owner should go to traditional financial institutions. At the same time, EstateGuru is able to offer loans up to 50% cheaper than other alternatives to the traditional financial institution.
EstateGuru charges the project owners 3-4% of the total loan amount. Furthermore, they will have to pay a 0-2% administration fee on an annual basis.
Before any project is added to the platform, it has to pass a due diligence process performed by the EstateGuru team.
On the other side, EstateGuru also has to attract a sufficient number of investors to the platform. The investors then get the opportunity to invest in the projects listed on their website.
No investment fee applies to investors on the platform.
Frequently asked questions:
Real estate crowdfunding is a great alternative to investing directly in properties. This is due to the fact that you can diversify between a lot of properties without having to invest millions. At the same time, you will have the opportunity to experience the high returns that real estate has historically provided to investors.
EstateGuru OÜ is a profitable company which in 2018 could present a net profit of €109,259. Since then, the platform has continued to grow.
We have already taken a look at some of the reasons why EstateGuru has become a popular choice among both project owners and investors. In the following part of our EstateGuru review, we take a closer look at some of the key features that make it easy to invest through their platform:
1. EstateGuru auto-invest
On EstateGuru, you will be able to find an auto-invest feature. By using this feature, you can put your investments completely on autopilot and you won’t constantly have to check if new loans are available for investment on the platform. All you need to do is setting up the EstateGuru auto-invest function one time.
To use their auto-invest maker, follow this process:
- Make sure you have signed up
- Log in to your account
- Click “Auto Invest”
From here you can make auto-invest rules to make EstateGuru automatically invest in the type of loans you desire for your investment portfolio:
If you plan to invest less than €250 in each loan, you won’t be able to use the advanced settings (the dark area on the screenshot above). So if you are a small investor, with a tiny investment portfolio, the EstateGuru auto-invest feature might not actually be that great for you. If you think €250 is too much per loan, but you want to use auto-invest, you might want to check out our Crowdestate review. On that real estate crowdfunding platform you can start using the auto-invest feature with €100.
However, if you plan to invest over €250 in each loan, you can make settings according to your desired level of risk. Especially loan-to-value (LTV) is worth taking a look at. As a rule of thumb, the lower the LTV, the lower the risk.
Using the auto-invest function can be a really good idea due to the fact that the loans on EstateGuru typically are funded very quickly.
2. EstateGuru secondary market
In October 2019, EstateGuru enabled investors to use a secondary market on its platform. You can use this feature to either resell loans, or to buy loans from other investors that wish to resell their loan.
The EstateGuru secondary market is great if you want to sell your loans before maturity if you want more liquidity or if you find better investment opportunities somewhere else.
However, if you consider reselling your investments on the secondary market, you should be aware that there is a 2% fee for doing so. It is also only possible to sell investments that are fully funded and are over 30 days old. For buying there is no fee.
3. EstateGuru Premium
In September 2018, EstateGuru Premium was introduced to the platform. If you invest more than €100,000 on the platform, it is possible for you to join this “club”. You will get an invitation from EstateGuru, when your account exceeds €100,000.
Some of the benefits from being a member of EstateGuru premium are:
- Getting pre-notified about upcoming loans
- Possibility of marking interest in loans before they are published
- A personal EstateGuru contact
- Free Trustly deposits
- Invitations to EstateGuru events
- Bonus offers for larger investments
If you want access to these large investor benefits, you’ll have to deposit at least €100,000 to invest at EstateGuru after you open an account on the platform.
4. Investments secured with collateral
One of the best things about investing on Estateguru is the fact that all loans on their platform are secured with collateral. Moreover, a thorough due diligence is conducted before an asset is made available for funding on the platform. However, EstateGuru does not guarantee your loans.
The collateral in which the loans are secured with can be things such as land or an apartment. If the borrower then can’t repay their loan, EstateGuru will make sure that the collateral is sold, and most of your investment should then be recovered.
Who can use EstateGuru?
Both individuals and organizations can invest through EstateGuru.
If you want to invest as an individual, you must at least meet the following requirements:
- Being at least 18 years old
- Having a bank account in countries in the European Economic Area or Switzerland
- Going through certain KYC procedures
If you live up to these requirements, then you can start investing through the platform.
It is also possible to start investing with EstateGuru if you run a company. When you are filling out the registration form, you should just click “select this if you represent a company”. From here, it should be straight forward signing up as a company on the platform.
It is possible to invest via EstateGuru in the vast majority of countries in the world. Today, you will find investors from over 100 countries on the platform. As some countries are restricted due to different laws and procedures, it can be a good idea to contact EstateGuru if you want to know if and how you can become an investor on their platform – you can use the chat on the website.
How safe is EstateGuru?
To determine if EstateGuru is safe, we have taken a look at some of the potential upsides and downsides of investing on the platform in the following part of our EstateGuru review.
1. EstateGuru profitability
EstateGuru OÜ is very transparent about its financials and you are able to find their annual reports on the website. By looking at the annual report of 2018, we found that EstateGuru made a profit for the year of €109,259. This contributes positively to the safety of the platform as there is less risk of a profitable business going bankrupt. This also reduces the platform risk.
It is also far from all crowdinvesting platforms that are profitable. But here EstateGuru is ahead of the competition.
2. Main risks
In the following, we go through some of the main risks of using EstateGuru that we have considered when making this EstateGuru review:
EstateGuru bankruptcy risk
Of course, there is a risk of EstateGuru going bankrupt. Like many other P2P platforms, EstateGuru has also created a procedure for what should happen in this case:
If EstateGuru goes bankrupt, then the agreements between borrowers and investors will still be valid. This is due to the fact that EstateGuru is a facilitator of investments and not an asset manager. The agreements made on the platform will be transferred to another capable management company which will manage the interests and investments of participants on the platform. EstateGuru has also secured investors by keeping their funds separate from the company’s own assets.
Financial turndown risk
If you choose to invest in real estate through EstateGuru, then you also take on real estate related risks.
Therefore, a financial turndown in real estate could affect the investments on EstateGuru as a real estate crash could cause a decline in property values. This will probably cause more defaults on the platform.
Is EstateGuru safe?
As EstateGuru is a profitable company, there is less risk than on many of the unprofitable P2P platforms.
Moreover, due diligence on the projects is also conducted by EstateGuru before they are listed on the platform. However, if you choose to invest on EstateGuru, you should include the possibility of a real estate crash in your considerations as it will probably affect the return of your investments.
Overall, we believe that EstateGuru is a great platform with serious projects and decent management.
Our experience with EstateGuru
Of the many real estate crowdfunding platforms we have tried, EstateGuru is one of the most transparent ones. The fact that we were easily able to find annual reports about the company was a big plus in our book.
When it comes to investing, we think that EstateGuru has the essential features. However, we have experienced that it sometimes can be a bit difficult to get all funds invested on the platform, as there is a limited amount of projects.
For smaller investors, the fact that you have to invest €250 per loan when using auto-invest to unlock the advanced settings like deciding on a maximum loan-to-value (LTV) didn’t make much sense to us. However, for larger investors, the feature is really great.
EstateGuru reviews on Trustpilot
Trustpilot is a great place to learn what other people think of EstateGuru. We have collected some bad, some average and some good EstateGuru reviews from Trustpilot for you to take a closer look at:
Best EstateGuru alternatives
Not sure EstateGuru is the right choice for you? Then there are also some good EstateGuru alternatives to consider. The following are some of our favorites:
Even if you choose to use EstateGuru, it may still be a good idea to take a closer look at some of the platforms above. By using multiple platforms you minimize your overall platform risk. At the same time, you will have the opportunity to diversify your portfolio further.
Conclusion of our EstateGuru review
As a conclusion to our EstateGuru review, we think that EstateGuru is one of the best platforms in the market when it comes to real estate projects. They have been in the market for a long time, and have managed to turn into a profitable company. They are very transparent about the projects on their platform and offer great features like auto-invest and a secondary market.
EstateGuru does also nurture the big and most influential investors on the platform. Among other things, they offer benefits for investors with over €100,000 on the platform like bonuses for larger investments and invitations to EstateGuru events.
All the investments are secured with collateral, which is great for investors. They are also open about the fact that they expect defaults, but that the collateral oftentimes will protect the investors anyways.
With that said, EstateGuru is definitely one of our favorite real estate crowdfunding platforms.