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Would you recommend investing in Swiss property with Crowdhouse? Is the concept sound? What do the costs and returns look like?
Hi there,
Crowdhouse AG offer a crowdfunding investment service through which you can invest in Swiss real estate. When you invest in property through Crowdhouse, you actually become a co-owner of the properties in question and hold a title deed. Terminating your relationship with crowdhouse has no affect on property ownership.
Crowdhouse Properties are financed in part via a fixed rate mortgage. The investment capital collected by Crowdhouse is invested in a down payment. Income generated by renting out the property, minus expenses, is divided between co-owners.
You must invest a minimum of 25,000 Swiss francs in one property. Investors can purchase a maximum of 30% of any one property. Co-owners are free to sell their share of the property if they so choose.
According to Crowdhouse, real estate for investment is selected based on strict criteria. Investors can choose which properties they want to invest in. Crowdhouse manages the transfer of the funds and the legal work involved in the property purchase, much like a real estate agency. Income generated through the rental of properties is distributed by Crowdhouse to investors after deducting mortgage costs, maintenance costs (including rennovation fund contributions) and adminsitrative expenses. Crowdhouse handles the property management.
In exchange for its services, Crowdhouse charges a commission equal to 3% of the purchase price of each property purchased, plus adminsitrative fees. It also charges a success-based fee of between 5% and 7.5% of profits as payment for its ongoing property-management services.
Real estate crowdfunding gives investors the opportunity to invest in real estate even if they cannot afford to purchase real estate on their own through a mortgage. It also allows real estate investors to diversify their real estate holdings by investing relatively small amounts of capital into many different properties. However, it is important to account for crowdfunding platform costs just as you would account for real estate agency fees and property management fees. You should also compare costs, terms and conditions to those involved in other types of real-estate co-ownership (cooperative housing or real estate corporation stocks, for example).
Best regards from Moneyguru
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