The Estonian/Singaporean based crowdlending platform BitOfProperty provides investors an opportunity to earn a passive income from real estate investments in shares or crowdfunding campaigns through their site.
The platform was rather new to me so I decided to take a closer look at it. Setting up an account was very easy as they just needed my personal information and a picture of a valid ID.
As we do not have ID cards in Denmark I shot a photo of my driver’s license and used this for verification. Passports can also be used.
I immediately received an email from the CEO and Co-founder Karl Vään that an amount of € 10 was added to my account. As I had not seen anything about this it obviously came as a pleasant surprise. The minimum amount for investments is € 50 so I decided to add € 40 to my account via Revolut.
The company has a legal set up approved by the Estonian Financial Supervisory Authority. I am aware that such does not secure me from fraud and hassles but it’s a good start.
As mentioned you can choose from two types of investments:
- Crowdfunding campaigns
- Property shares
Let’s take a look at the first investment type. In this case, it’s crowdfunding of The Arte House Project in Tallinn. The target amount is € 422,600 and as you can see from the below picture only € 1,450 has been invested so far. This is equal to 0,34% of the total sum needed.
The estimated rental yield is 5,3% which is fine for a real estate backed loan and the investment period of 5 years does not scare me away as I see my investments in a long term perspective. The total estimated monthly income is € 23,760 for the entire property which is operated by Best of Both Worlds and the building holds 41 apartments in total.
As only 32 days remain for this investment I doubt the goal will be achieved. I can be wrong of course but I decided to stay away and focus on the shares instead. It should be mentioned though, that if the investment amount is not reached the money you have invested will be sent back to your wallet.
I decided to investigate the DepotHouse (Stage 1) project. This is a 73 apartments and office estate project. It is located in the former factory building of Eesti Raudte (Estonian Railway Company) just outside the center of Tallinn (Estonia’s capital).
The total purchasing costs here are € 68,725 and the investment return of app. 7% is guaranteed for a period of 24 months. The real estate developer is the Estonian based company Koidu Ehitus OÜ which has been in the market since 2014.
From December 2018 BitOfProperty has taken over the fully furnished apartments one by one and their investment period ends on December 2021 where the building will be sold and your investment will be returned when the sale goes through. Interests will be received from the day your investment has been made.
The reason I entered this project is, that my investment is backed by real estate and I find a 7% interest combined with the 24-month guarantee very exciting. All their projects have sufficient information to download where project overview, risks, and strategies, etc., are highlighted. The total investment runs for three years.
The way you do buy these shares is that you place an order and then you receive an email that confirms how many shares you want to buy, max. price per share etc.
You can also choose to cancel your order if all the shares are not being sold. I decided to accept partial fill which means, my investment will go through even all the shares are not being sold.
Soon after you will receive an email confirming your price etc. and you have to answer by sending an email and confirm your order.
The investment has been made and I can now lean back and wait and see when I begin receiving interest.
I wish you a nice day 😊