Brickstarter - P2P Lending Investment Review
What is BrickStarter?
Brickstarter is a crowdfunding platform for real estate property. It was launched in 2017 and has since pooled together over two million euros in investments across several vacation real estate properties. It is essential to highlight that Brickstarter focuses mainly on vacation properties, as they are deemed the most profitable.
One of the benefits of this real estate crowdfunding site is that you will receive monthly payments of the rental income that the property will generate. Once the property is sold, you also receive a share of the capital gain.
How does Brickstarter works?
Brickstarter utilizes big data obtained from accommodation booking sites such as Airbnb and HomeAway to find the best property in a given area. Valuation of the property is done based on; the revenue that it can generate, how much value can be added to it, and the cost of acquiring the property.
Once a given property is identified and analyzed, it is published on the Brickstarter website to pool funds for its renovation. Investors are allowed to invest as low as 50 euros. Upon completion of the funding phase, Brickstarter acquires the property, and the renovation of the property begins. The renovation is meant to make the property more modernized and appealing to visitors. By so doing, revenue generation increases as more tourists book the property.
One good thing about the Brickstarter model of crowdfunding is that investors receive a 5% interest during the funding phase.
Returns on the Brickstarter platform
It is not possible to tell the exact amount that can be earned from Brickstarter projects since it does not display the statistics regarding average return on investors. However, a good number of properties listed on their website have a rental yield of 5% with a capital yield of between 15% and 20%. On top of the capital gains and the rental returns, you will also receive the 5% interest issued out during the funding phase.
How safe is Brickstarter to invest in?
Brickstarter deals with vacation property and payment is collected through online booking sites. As a result, you can rest assured that the occupants of the rooms will not fail to pay. Any property that gets an occupant, the payment is received beforehand. Brickstarter does not involve any third party in the management of the property; everything is carried out by in-house personnel. This gives the company more control over the property and hence lesser risk.
What risks are there on Brickstarter?
Every investment has risks, and investing in Brickstarter has some too. The following are some of the risks on the Brickstarter platform that you should know off before investing.
It is important to point out that Brickstarter is still relatively new in the industry. It is, therefore prone to platform default, which can lead to the loss of the investor’s money. However, Brickstarter separates its assets from the investments it receives. This separation ensures that the investor’s funds are protected if the platform defaults.
Brickstarter does not use two-factor authentication, which makes it easier for hackers to hijack investor accounts. As an investor, you can protect yourself by using a unique and strong password on your Brickstarter account and also keep the password hidden.
In case of a real estate market collapse, it will become impossible to sell the property hence no returns for investors.
The platform does not offer enough liquidity. From the time you invest to the time the property is sold, your funds are locked. However, Brickstarter strives to sell the renovated property as quickly as it can.
How can you begin your investment journey on Brickstarter?
Beginning your investment journey on Brickstarter is quite easy; you only need to open an account with them and deposit some funds to the account from your bank or by using a credit card. Deposits are received almost instantly, and withdrawals will take a maximum of two days to complete.
Once you have the funds in your account, you can browse through the several projects available on their site, selecting those that you find profitable for you.
Brickstarter fees and taxes
Brickstarter makes its profits from the commission charged on the acquisition of property, which is usually 4%, an additional 4% commission on the sale of the renovated property, and a 10% fee is also imposed on the profits gained from a successful project. Before the sale of the property, Brickstarter deducts 30% of the total rent to cater for property maintenance.
For investors in Spain, Brickstarter withholds tax for them, and for those out of Spain, they have to calculate and file for taxes in their countries of origin.
Pros & Cons of BrickStarter
From what’s been discussed above, it is true to say that Brickstarter is a good investment platform. The fact that they focus on one type of real estate property gives them great expertise required to find the best properties to invest in. Additionally, Brickstarter uses big data to analyze projects; and you know data never lies.
This platform is a promising one that is going to establish itself and cut its niche in the real estate crowdfunding industry due to its unique approach. If you wish to diversify your investments and make high returns, you should consider investing in Brickstarter. You can start your investment journey on Brickstarter today by clicking on the link below.