Brickstarter Analysis 2020: The Results After 11 Months
I enjoy diversifying my crowdfunding property investments on as many different sites as I can. This is why I'm always testing out other platforms with my own capital and then writing a review on the subject.
I'm going to review this time the crowdfunding real estate site Brickstarter. It concentrates on Spain's real estate rentals, which means that those properties get you a monthly allocation of income. But what I find a great advatange at Brickstarter is that they concentrate on holiday rentals, which not only means higher returns for investors, but less risk, too, because all rental payments are received beforehand. It's a platform I wanted to try out for quite some time because of all these reasons.
I'll let you know what returns you can expect from the platform, what the main features are, and ultimately share with you my newest results concerning the platform.
Brickstarter is a crowdfunding real estate site from Valencia, Spain. The company was launched in 2017 and has now funded 2+ million real estate ventures in Spain.
As already stated, what's really cool about Brickstarter is that you get monthly rental income dividends from the house, plus good future capital gain if the real estate is sold.
However, this gets even better seeing how they concentrate on holiday rentals, which implicates that properties can only be leased for the short/medium term on Airbnb, Booking.com and similar pages. And that provides two major benefits for investors: higher rental income, and also less uncertainty, because those who rent holiday real estate often need to pay in advance, thereby reducing the possibility of anyone living there and not paying.
At Brickstarter, they are focused entirely on big data and aimed at optimizing revenue for investors when it comes to picking platforms.
As with all the sites I'm testing, I've also been in contact with their support department, not just to see whether they can help me out, but also to make sure there's a real company behind the whole web page. They replied the same day, and resolved my question with no issues. I also looked up their registration number in the Spanish business directory and it matches the name and address of the company on the Brickstarter website.
What kind of returns should I expect to see?
Brickstarter does not advertise on the platform an average return for investors, but a lot of the properties listed on the platform have a net profit of about 5.5 percent and an approximated gross capital gain of 15-20 percent if the property is sold. It amounts to roughly 11 percent of the average return on property held for 3 years. You do get payments at a 5% fixed rate before the project is funded, thus your money doesn't sit there in case the project takes more time to get funded.
As I began investing in the platform in August 2019, it is still far too early to measure my own overall success, but so far all payments have been made on time and with a return similar to what was planned.
Is investing in Brickstarter secure?
All rental fees are received in advance from sites like Airbnb or Booking.com, which ensure that you can never end up with renters who do not pay their rent and live in those properties.
Brickstarter also uses mezzanine funding for its transactions, which is a hybrid form of funding debt-to-equity. In particular, it gives the lender the right to turn it into an equity interest in the company in the event of it going bust.
They don't have a third-party to purchase and then maintain assets, all is done within their team, which gives more flexibility to them and thus less investor uncertainty.
And how are the properties they put on the site picked? They use big data from all assets in Spain to find those that optimize potential returns for investors and lessen the risk.
You can also invest with only 50 Euros in each property, which means that you can invest in a variety of platform properties with a small budget. You should certainly do so, because like other assets in your portfolio, your profits will be smoothed out and your return will not be compromised if one or more assets are empty.
And, with all of these considerations, it's certainly much easier to create a portfolio on a platform like Brickstarter than to buy a single flat and rent it out to long-term tenants.
How do I begin investing in Brickstarter?
After you open an account (a job of 5 minutes and less), you can make a bank transfer to the platform using the bank details they offer, but you can also conveniently deposit money with a credit card payment. I started with a 250 Euro deposit, made via credit card, and the money was there immediately.
As for all the platforms, I attempted to withdraw the capital, too. All went well and I got my money in two days.
To actually start building your portfolio of rental properties, you need to select one of them on the website. You can search open projects by choosing the Properties tab:
Then, you can click on the project you want to learn more about to get more information, such as this project in Alicante:
For each project, you will have access to a comprehensive overview of the property, what they intend to do in the future and, of course, all the financial information of the project:
You can then invest in the project by putting in how much you want to invest and press the Invest button. There is also a button on all of these pages that will give you an estimate of your future combined yields (rental payments and capital gains) for the project.
Notice that there is no automated investing option for now, but they were working on it and it will be implemented later on.
My Brickstarter Results
Let's dig deeper into the performance I've had so far on Brickstarter. In August, I opened my account with 250 Euros to check out the platform, and I invested in two real estate rentals in Sevilla and Cadiz right away. Since then, I have placed an additional 250 Euros on the platform and invested in another property in Cadiz.
The total projected return on these investments is roughly 10.5 percent, which I can, of course, check in the future when I collect my first rental payment. During this time, I earned the planned 5% return when the properties were being financed, so Brickstarter delivered as planned on this side.
Should you invest with Brickstarter?
Personally, I really like Brickstarter. They concentrate on vacation rentals which I find great and very interesting in crowdfunding real estate as it offers better returns and more protection for investors. On top of that, I also like the fact that they use big data to optimize their investors' future returns. Brickstarter is all in all a very promising platform that can have its place in any crowdfunding real estate portfolio.
Brickstarter main features and highlights
- Real Estate Crowdfunding