Reinvest24 is a crowdfunding site offering strong rental yields and easy exposure to real estate in the Baltic states
Reinvest24 is a little different to most of the other investment sites we cover here at Explore P2P. It is a real estate crowdfunding site, rather than a P2P investment site. However, we think that the investment and return profile will be of interest to many P2P investors.
Reinvest24 offers investors shares in individual properties in the Baltic region. The shares receive dividends from the rental of properties, and unlike P2P investments, investors can benefit from any future growth in real estate prices (but also with the risk that prices may fall). Reinvest24 takes care of everything on behalf of their investors – asset selection, renovations (if required), legal work, finding tenants, collecting rents, and asset management.
Why could this type of investment be particularly interesting right now? Rental yields in this region are around 2 to 3 times higher than can be achieved in Western European markets. Net rental yields of properties offered by Reinvest24 range from 5.6% all the way up to 15.1%. Economies in the Baltic region are growing much more quickly than the rest of Europe, which should continue to translate into higher future income levels and asset prices. And finally, unlike many other real estate markets around Europe and beyond, prices are currently low. Prices are very affordable relative to local average income levels. They are also very cheap on an absolute basis, being around 75-80% lower than equivalent properties in major European cities. Prices have been however increasing, and it appears there should scope for this continue.
We think that Reinvest24 is really most suitable for investors looking to invest on a long term basis. The secondary market for the shares has not been launched yet (that will allow investors to sell their shares), although this is expected shortly. It is also not possible to know currently how much liquidity the secondary market will have, and at what price levels the shares will trade relative to the market values of each property. Reinvest24 however notes that secondary market sales on other crowdfunding sites such as Property Partner tend to be very close to market values. In our view, investments into Reinvest24 should have an investment horizon of at least 3-5 years.
Reinvest24 has a minimum investment of only 100 euros. To visit their site, click here.
Interview with Tanel Orro, CEO of Reinvest24
To visit Reinvest24, click here
Example investments available from Reinvest24
'Majaka' building
This is a project to renovate a residential building close to Tallin's tech hub (Estonia), and then rent once completed. An 8% net rental yield is forecast, together with capital appreciation as a result of the renovation work.
'Kreutzwaldi'
This building is zoned currently for either residential or commercial use. The property offered by Reinvest24 was let to a Norwegian IT firm on a long lease, generating a net rental yield of 5.6%. The very central location and quality of the property is expected to see it benefit from growth in rents and valuation in the future.
Hello
Do you invest in this platform? I made account but i was not impressed. Design of pages and pictures from project look awful and unprofessional.
Hi Sander,
thank you for your question. Let me try to explain what i ment by that:
The 2% fee from the entry is barely enough to cover the expenses. Without the 10% operating fee it would be almost impossible for Reinvest24 to become profitable.
Hope that makes sense, let me know if theres anything else. All the questions are more than welcome!
Thanks for the update & interview.
Was the interview live? If so, could you please let us know why you let the interviewee get away with “So basically we only make money if our investors make money..”, when the sentence before says that “Reinvest24 fees include 2% on entry and 10% from rental yield for operating the property”. Meaning that Reinvest24 take a 2% cut no matter what the return for the investors is.