EstateGuru is a peer-to-peer lending platform based in Estonia that offers investors the opportunity to invest in real estate properties. Established in 2014, EstateGuru has already funded over 680 loans worth over €130 million. With a good lending track record, EstateGuru investors have achieved average returns of over 10% to date. The rapid growth has seen the company become one of the largest P2P investment platforms’ in Continental Europe.
How it Works
For starters, you need to be over 18 years old and have an account within the European Economic Area (EEA) or Switzerland. Note that investments in EstateGuru are only available in Euros hence the need to have a Euro account. If you reside outside Europe, you can open a borderless Tranferwise account and get a bank account in Euros.
There’re are two options when it comes to investing in EstateGuru real estate loans, Manual Invest or Auto Invest. Auto Invest is ideal for investors who use P2P lending as a passive form of investing. You can only invest in loans secured by a mortgage or by a personal guarantee from the borrower. To create an auto-invest profile, you’ll need a minimum of €50 in your account. You can set up your investment amount in a loan term interval, a single loan and the types of loans.
As there is no secondary market in EstateGuru, you can exit your investment when the loan-term ends or when the borrower pays off the loan.
Is Your Money Safe?
The real estate that the properties are tied to backs up all EstateGuru loans. In case the borrower defaults and is unable to repay loans, the property is liquidated and the remaining loans are repaid with the money received from the sale proceeds. In a good economy, such property loans investments are considered safe. Unlike other platforms such as Mintos, there’s no secondary market for loans. This means your money is locked in for the duration of your loan investment.
EstateGuru offers four main types of loans backed by property. They include:
- Bridge Loan – Backed by the property, a bridge loan is a type of short-term loan. It takes 5 to 14 days to issue such loans, and they’re more expensive than traditional mortgages. Companies tend to choose a bridge loan when in need of quick cash. The repayment period of most bridge loans is between 1 to 18 months, and there’re no repayments until the end of the loan term.
- Business Loan – EstateGuru business loans are for small businesses that need to increase their operating capital. The real estate property on the platform is the security and the interest rate is paid back on a monthly schedule.
- Development Loan – Any loan used to develop a real estate property is a development loan. The repayment period ranges from 3 to 4 months.
- Refinancing Loan – A refinancing loan is a loan made to pay off another loan. You can do this either to secure a better loan deal with lower payments, a lower interest rate, and a shorter loan term or to pay off a loan that is due at a specific date.
Combined with the low default rate, EstateGuru always has available loans to invest in. This means your money will not sit idle in the account due to lack of loans on the platform.