EstateGuru P2P Lending Platform Review
EstateGuru is a peer to peer lending / real estate investment platform that offers short-term property-backed loans from Estonia, Finland, Latvia, Lithuania and Spain.
It has more than 20.000 investors from 45 countries and a historical return for investors of 12.22%. You can start investing in EstateGuru with as little as 50 EUR.
All the loans are secured with collateral from the company requesting the loan. EstateGuru doesn’t offer a buyback guarantee policy but the historical default rate on the platform is very low, around 0.5%.
All loans are secured by real estate property. In case of borrower default, it will take a while, but your funds would be recovered.
- Loan types: Business Loans, Development Loans, Bridge Loans, Refinancing Loans
- Loan terms: up to 2 years
- Interest rates: 8-12%
- Fees: no fees
- Minimum investment: 50 EUR
- Currency: EUR
- Secondary market: no
- Auto-invest: yes
- Buyback guarantee: no
- Last update: March 2019
- Started Investing: August 7th, 2018
- Current value: 1228.5 EUR
- Profit: 46.11 EUR
- Net annual return: 11.07%
My EstateGuru portfolio is another one that ran only on autopilot. I’ve added some funds a few months back and since then I’ve only been withdrawing the profits.
Some of the loans I’ve been investing in only pay at the end of the loan period, so the short term returns don’t look too great.
What bothers me is that I can only invest exactly 50 EUR or 75 EUR, so I can’t really reinvest my interest payments. I keep withdrawing them from the platform each month, and then every 6 months or so I invest in a new project to keep my portfolio around the same value.
Opening an account on EstateGuru
You’ll need an EEA or UK bank account in order to open an account with EstateGuru. If your bank account’s primary currency is not EUR, you can cut some currency conversion fees by using Transferwise or Revolut.
EstateGuru offers multiple types of loans backed by property. Below are the loan types I’ve been investing in.
A bridge loan is a type of short-term loan backed by property. The loan is usually issued in 5-14 days, which is a lot faster than other types of loans. As a downside, they’re more expensive than traditional mortgages. Typically, companies choose a bridge loan when they need cash quickly, for example when buying a property at an auction or buying something under the current market value.
Most of the times, bridge loans are offered for 1 to 18 months, and there are no repayments until the end of the loan term.
The business loans EstateGuru offers are for small businesses that need to increase their operating capital. These loans are also secured by real estate property on the platform, and the interest rate is paid back on a monthly schedule.
That’s an easy one. All loans used to develop real-estate property are development loans. The only development loan I’ve invested in has been so far late with the payments in 3 of the 4 months.
A refinancing loan is a loan made to pay off another loan. Companies (and individuals) do this in order to get a better loan deal: either lower interest rate, or lower payments, or to shorten the loan term, or just pay off a loan that was due at a specific date.
Investing in EstateGuru
All of the loans available on the platform are short to medium term property-backed loans.
You can see more details about each specific loan on the loan page and there you can decide if you want to invest or not.
Your investment portfolio is displayed beautifully based on multiple criteria, such as country, loan type or collateral type.
Some key statistics are also available, showing the state of your investments and your earnings for the last months.
You’ll need at least 75 EUR in your account in order to create an auto-invest profile. You can set up the amount you’re willing to invest on a single loan, loan term interval, the interest rate you’d like, type of loans, loan-to-value ratio, and then let it run and pick up investments for you.
Conclusions on EstateGuru
EstateGuru is a peer to peer lending platform easy to use. They had their website redesigned in October last year, and the user experience it offers now is really great.
The loans available here have decent return rates at around 12%. The default rate is very low, at less than 0.5%. All the loans are backed by property which makes the loans very secure to invest in.
The auto-invest feature is helpful and I might use it in the future.
On the downside, there’s no secondary market and you can’t sell your loans to other investors, but it is still a great platform.
The minimum amount to invest is 50 EUR, so it’s hard to reinvest the interest payments if your portfolio is only 1000 EUR (as mine is). Even more annoying, you cannot invest 50.5 EUR, just 50 EUR. Really annoying.