Statistics
| Investment type | Real estate |
| Average returns | ~14,8 % |
| Minimal investment | 100 EUR |
| Secondary Market | Yes |
Reinvest24 has gained the curiosity of a lot of people in the investing community.
This Estonian-based real estate crowdfunding platform has been making waves since it was established in 2018.
Wanting to diversify my investment portfolio, I tried Reinvest24 to experience FIRST HAND if this platform is REAL and IF IT ACTUALLY WORKS.
I’ll devote this article to give an unbiased and concise Reinvest24 review. This includes sharing my OVERALL experience, the legitimacy of the platform, and the results I got from this venture.
Let’s get on it, shall we?
Alternatives
Compare it to other similar platforms
Full review
What Is Reinvest24?
Reinvest24 is a real estate investment platform. They are based in Tallinn, Estonia, and focus on building and developing real estate properties mainly in the Baltic region.
Their top cities include Tallinn in Estonia, Latvia’s capital – Riga, and Vilnius, Lithuania.
Recently, they have also expanded their investment offerings to include properties in Moldova, Spain, and Latvia.
The platform is in its THIRD year this year. It was founded in 2017 by Tanel Orro who previously worked for LVH (Estonia’s largest banking group) in the asset management department.
Since its formal launch in 2018, Reinvest24 has:
- Expanded its portfolio and funded more than 10 properties.
- Grown and managed 12 million Euros worth of real estate projects.
- Generated over 4 million Euros profit back to its investors.
What Is “Crowdfunding”?
Before I delve into my Reinvest24 review, I’ll quickly go through the concept of real estate crowdfunding.
CROWDFUNDING is basically pooling small investment amounts from a CROWD or a number of individuals to finance a business venture.
In REAL ESTATE CROWDFUNDING, the business venture would have something to do with residential or commercial properties.
Usually, developers crowdfund in order to build and get a project going in exchange for a share in the property.
Real estate crowdfunding platforms are very popular nowadays for individual and private investors.
If you’re new or curious to try this out, the way it works is that the collateral for the investment is a SHARE on the property itself.
THE MONEY YOU PUT IN GUARANTEES THAT OWN A SHARE OF THE PROPERTY.
Although there might be risks to real estate investment (which we’ll look into below), Reinvest24 MINIMIZES these by enforcing strict criteria or should I say, a “FORMULA.”
As I was doing my own Reinvest24 review, I found out they conduct due diligence before listing a property. Suitable projects for Reinvest24 should meet the following:
- Vacancy index in the area and of the property. This indicates the ease or difficulty of finding a tenant. Common factors would include cost of rent, location, and building amenities.
- Ease of selling the property in the market.
- Price growth expectation. This is the average or trend of capital growth over x period of time for similar properties.
To be honest, having these set criteria in place gave me peace of mind during my first time investing on the Reinvest24 platform.
- It means they CAREFULLY STUDY each project before adding it to their offerings.
- It also implies my investment is funding a HIGH POTENTIAL PROJECT that has been thoroughly checked.
Pros and Cons
Real Estate Crowdfunding Platforms: Pros
Among other investments, REAL ESTATE remains a valuable asset across all countries and generations. Let’s start with the PROS or advantages of real estate crowdfunding.
Low Maintenance and Minimal Risk
The good thing about this type of real estate crowdfunding compared to investing in a real estate property on your own is the minimal risk and work it entails.
In contrast to owning your own real estate property, it’s arguably LESS STRESSFUL as you won’t be the direct owner. Allow me to explain.
Managing a real estate property requires permits, development plans, building maintenance, and so on.
In crowdfunding, you won’t have to worry about all this.
Budget expenses, labor, project design, filing taxes, and even managing tenants, will be the responsibility of the developer or operator.
Invest Online
You won’t have to travel to Estonia or even leave your home! You can invest in a property and do all your transactions without stepping a foot outside the door.
Small Investments To Opt In
It’s also a great OPTION for those who have more than enough money BUT not enough to buy and build your own commercial real estate property.
If you’ve always wanted to invest in real estate and grow your money, this is perfect for you.
Reinvest24 allows SMALL capital investments. The minimum investment is just 100 Euros!
Cultivate A Diversified Portfolio
You have CONTROL over how much you want to invest and which projects to invest on.
REMEMBER: A diversified portfolio for property investments increases your chances of higher returns.
For example, if you divide your investments into smaller shares in multiple projects, you won’t have to worry much if one property did not generate income for a certain period.
In contrast, you would feel the impact or loss if you put all your investment in just one property.
Real Estate Crowdfunding Platforms: Cons
However, as with most business ventures, there are disadvantages or challenges in this type of investment.
Sensitive to Market Downturns
A loss might be expected if the market fails or faces a downturn.
For example, calamities, pandemic, or border conflicts might affect the vacancy rate of the properties.
Prolonged vacancy would further depreciate the value of the property.
Illiquid Investment
As in most real estate investments, the investment is NOT liquid. If you need an investment that you can easily convert to hard cash, reconsider other investing options.
How does it work
Steps for Investing in Reinvest24
Starting your investment in Reinvest24 is pretty straightforward and simple.
As everything is done online, the transaction per se is doable within 10 minutes.
Check Investment Calculator
What I initially did was to make use of their investment calculator. You can find it here.
On their website, Reinvest24 has a calculator to help you estimate the average yield and possible income you can gain from your investment.
Try to calculate the yield for the amount you plan to invest.
However, if you have a figure in mind on how much you want to gain from Reinvest24, you can also work your way backward.
Increase or decrease the figure until the income reflected in the calculator is close to how much you want to gain. This will help you determine how much you should invest.
Disclaimer: These are just ESTIMATES and can vary with the actual results you can get.
It takes into account the CURRENT state of the real estate market. However, there might be factors in the future that can fuel or disrupt the market. USE THIS AS A GUIDE ONLY.
Create Account and Transfer Funds
The second step is to create an account.
This is where you will be able to see the available properties as well as the income report for the properties that you have invested in.
Once you have your account, it’s now time to invest!
Before you can build your portfolio, you need FUNDS. To do this, you need to deposit money to the platform via bank transfer.
The bank details will be provided by the platform. Popular options are Western Union, Paypal, or Wise.
As for me, I opted to transfer money using Wise. Within one day, the transaction is reflected in my Reinvest24 account.
To be sure, I also tried to withdraw my first rental income and transfer them to my bank account. This was a success – after 2 days, the money is already reflected in my account!
Author’s note: In order to invest, you need to be at least 18 years old and your active legal capacity is not in any way restricted.
Choose and Monitor
When logged in, look for the properties tab.
Here, you’ll be able to see available and new projects on the platform.
Once you click on a particular project, you’ll see a detailed description of the property such as:
- Future use
- Current status
- Funding target
- Gross rental income
To invest in one of the rental projects, you only need to enter the investment amount you’re willing to put in.
Once you do, the page will also do REAL-TIME estimations on the monthly rental income and capital growth for your investment.
Lastly, click the “Invest” button to seal your investment. That’s it!
I was satisfied with my experience. The platform itself is also user-friendly and easy to navigate.
However, I noticed that, unlike bigger platforms, Reinvest24 does not have an auto-invest feature available. This is understandable considering the limited number of available options offered in their platform.
Author’s Notes: Reinvest24 collects a 1% investment fee which was previously 2%. Whether you are engaging in the primary market or buying in the secondary market, the fee is the same. Reinvest24 collects this to cover property acquisition expenses.
Returns
How Do They Generate Profit?
Investors (ie. you) put in an amount of money (depending on how much you want to invest) to support a particular project.
There are 2 ways that your money grows:
1. Cash Flow From Rental Revenue
Investor gains a share or owns a part of the property after investing.
As owners, you will also get a share from the property’s monthly profit distribution. This is sourced from the rental fees collected from the tenants.
2. Increase in Property Growth Value
Another scenario would be what some would consider as “classic” or traditional real estate investing.
In the event that the property is sold (after a predefined period of time), investors also get profits from the property’s capital growth.
However, keep in mind you can only benefit from this when you sell shares on the secondary market. Only when it’s sold will you be able to cash in your profit.
The good thing about Reinvest24 is they have this secondary market feature readily available and linked in their platform.
For instance, if you decide to sell shares to Reinvest24’s secondary market or withdraw funds, you can easily do this using your Reinvest24 account.
In BOTH cases, YOUR SHARE from the profits is DIRECTLY PROPORTIONAL to the amount of investment you put in.
The MORE shares you have in the project, the HIGHER your percentage is from the income.
How Much Returns Can I Expect From Reinvest24?
Reinvest24 markets an average of 14.6% annual return rate on their platform. This comes from a combined capital growth and rental yield.
Browsing through their P2P lending platform, most properties listed have an average return of 8% annually while the capital growth is around 5-6%.
Risk
Is Reinvest24 Safe?
My Reinvest24 review would be incomplete without answering the most common question – “IS MY INVESTMENT SECURED?“
As mentioned, Reinvest24 is mainly an equity-based real estate crowdfunding platform. Each investor owns a share of the property.
Special Purpose Vehicle
There is a Special Purpose Vehicle (SPV) property company for EVERY project listed in Reinvest24. The presence of SPV is an advantage for Reinvest24 investors.
The SPV becomes a form of a subsidiary company that rightfully owns the property titles. Each investor becomes a DIRECT shareholder of the subsidiary company.
It means you gain DIRECT property shares on the property and not with Reinvest24.
This also means that if Reinvest24 shuts down, you will still have property rights as your investment is WITH the subsidiary.
Mortgages
In addition to SVP, investors money is secured through MORTGAGES managed by a collateral agent. Again, having this in place puts the investors at an advantage.
Support
Customer Service
Aside from checking their website and looking at reviews found online, I also did a little digging on my own.
First, I tried to reach their support team. Checking the quality of their support team was secondary.
My main goal was to check if the customer service was real and also to verify the existence of the platform.
After getting in touch with their team, I was surprised! Not only were they approachable and professional, but they’re also very knowledgeable about what they are doing.
They are familiar with the ins and outs of the business. So whether you are a first-time investor or if you want to further diversify your portfolio, they would be able to assist you.
Permits
However, I am aware that some fraud companies might go the distance and hire their own fake customer support team. So I did a final check of their registration and documents to see if they are LEGALLY operating.
Upon checking the Estonian company directory, it matches the records with their registration information. The name and company address are also spot on.
So, YES – Reinvest24 is LEGIT and a trustworthy platform.
My experience
Reinvest24 Review: Results After 12 Months
As mentioned, I started my account and first investment back in mid-November 2018. I decided to go over the minimum investment of 100 Euros and put in 400 Euros.
My first investment listed an expected yield of 11.6 to 12%. Calculating the monthly rental income I have in my account, the annual yield is about 11.4% – which is pretty close to what was listed.
It’s not exactl to what was estimated but it’s NOT BAD either.
Since then, I decided to invest an additional 400 Euros as more properties became available for investing. In total, I invested 800 Euros in Reinvest24.
What I Like:
- Decent Return Rate
- Easy to navigate platform
- Complete details on projects
- Introduction of secondary market tool
- Introduction of development loans
What Can Be Improved:
- Addition of auto invest feature
Although it has been running for 3 years now, Reinvest24 is still considered a “new” platform.
I’m happy with the results I got but it’s still early to tell. With many competitors and other real estate platforms that have been in the market longer, Reinvest24 still has a lot to prove.
INVESTMENT ADVICE: Whatever platform you will use, research, and do your due diligence before investing in a property. Check and study the details first before deciding on which property to go for.
Contacts
Reinvest24 Contact Information
- Email: support@reinvest24.com
- Phone: (+372) 52 433 38
- Address: Swiss House, Roosikrantsi 11, Tallinn, 10119, Estonia
Verdict
