Kairi Veere from European Online Lending Platform EstateGuru Explains how to Diversify


Today, nearly a year and a half since the Coronavirus pandemic began, we have all been forced to adapt to the new environment or the “new normal” in almost every aspect of life.

As at any time, there are always “winners” in the economy and those who get forced “to turn a new page and start over,” according to a blog post by Kairi Veere, Investor Relations Coordinator at EstateGuru.

Veere notes in a blog post that there are many firms that have been reporting record results from month to month. The real estate sector is one industry that “finds itself on the winning side, yet professionals are not seeing any signs of overheating,” Veere reveals.

The EstateGuru team also mentions that they’re now “moving in with a strong tailwind.”

The company adds:

“We are just as successful as our users. By practicing diligent care, the risk team has constantly contributed to ensuring that the platform’s risk-return ratio is well balanced and that the quality of loans issued, or credit control, does not decrease because of rapid growth.”

Stable or steady growth in the real estate space may be expected as long as reserve banks are continuing their policy of printing money “to stimulate the economy,” the EstateGuru team writes. Securities and real estate markets “remain the first preferences for investors looking for a good return due to their risk-return ratio and liquidity,” the company confirmed.

Although it’s not quite possible to compare all asset classes, asset diversification is “always crucial.”

EstateGuru has examined direct investment in real estate when compared to crowdfunding platforms and stock market investment “in a single stock versus a multi-share index fund.”

Rental housing may a good investment if you have the “willingness to manage your own properties,” EstateGuru noted while adding that with mortgage rates reaching their all-time lows in recent times, it could be “a great time to finance the purchase of a new property, though the unstable economy may make it harder to actually run it, since tenants may be more likely to default due to unemployment.”

As noted by the EastateGuru team:

“To pursue this route, you’ll have to select the right property, finance it or buy it outright, maintain it and deal with tenants. You can do very well if you make smart purchases. However, you won’t enjoy the ease of buying and selling your assets in the stock market with a click or a tap on your internet-enabled device or selling your investment in real estate through a crowdfunding secondary market platform. Worse, you might have to endure the occasional 2 a.m. call about a broken pipe.”

They added:

“However, with thorough analysis and previous experience, it is possible to find an excellent equity investment or an ideal real estate object. The downside is that by investing in only one object or company, you may have taken on too much risk and are very vulnerable if something unpredictable happens.”

For instance, by purchasing only Apple stock, you may have “made a great deal.” However, it’s probably or statistically safer “to invest in the S&P500 index – as the fund is based on about five hundred of the largest American companies, meaning it comprises many of the most successful companies in the world,” the EstateGuru team explained.

Like almost any fund, an S&P 500 index fund provide “immediate diversification, allowing you to own a piece of all of those companies” and the fund includes companies “from every industry, making it more resilient than many other investments.”

As noted by the firm:

“When it comes to real estate, yes, you can find a very nice apartment or house to earn a rental income, which gives you a good return. You may even find an excellent tenant, yet it may still happen that this ‘happiness’ turns, and you are forced to deal with problems that you could not have foreseen. In terms of risk diversification, it is wiser to have a portfolio in which the real estate sector is nicely represented rather than investing in just one object.”

Before actually making an investment, there are certain aspects investors need to be aware of, EstatGuru notes while adding that there are various risks associated with companies and there are risks that are “unpredictable in every investment, such as the general health of the sector in different phases of the economy.”

But there’s a lot of information “when making an investment that saves a lot of nerves in the future and does not create unrealistic expectations,” the firm noted.

They continued:

“Unlike many similar platforms, EstateGuru’s first and biggest advantage is that all business loans are secured with collateral. Why is this important? Even the most experienced risk assessor cannot anticipate all the risks associated with a project, and we must also be prepared for the fact that some projects that get funded through the platform will not be successful. In this case, we can avoid capital loss by selling the collateral.”

In addition, in recent years our firm has been investing in its team and resources “to keep the quality of the projects high,” EstateGuru revealed while adding that they know how to “act in a worst-case scenario, and how to help borrowers when they are hit with difficulties.”

(Note: You may read about how the debt procedure “works smoothly” here.)

The firm’s management also noted:

“We are often asked why people come to a platform with higher interest rates instead of getting financing from a bank. The main reason is very simple – banks’ risk appetite and regulations prevent fast procedures.”

Banking institutions don’t have the capacity to finance or fund an initiative in just a few days, the company explained while noting that the large number of investors on their platform allows  borrowers to receive financing. Borrowers may also access free marketing for their project, EstateGuru revealed.

The company further noted that it has happened regularly that an investor who has “contributed to a development project through a loan also buys, for example, an apartment from the development project in which they invested.”

As EstateGuru provides projects from eight countries, it also “gives the easiest access to ‘owning’ real estate abroad which otherwise is quite complicated.”

As noted by EstateGuru:

“In addition to the risks and the attractive return forecast, we recommend paying attention to the investment costs. Participation in the securities market entails both transaction fees and account management fees, which all reduce the investor’s net return at the end of the day. Real estate acquired for investment purposes also incurs fixed costs. In the worst case, also a large expense in the form of a failed tenant.”

The EstateGuru platform lets you achieve good diversification and the “safest” possible investment in the sector with “an initial contribution of just 50 euros at no extra cost.”

As mentioned in a blog post, this is an amount most can afford. Another fact that’s in favor of investing on the EstateGuru platform is that “all the preliminary work, background and risk analysis of the loan and the borrower has already been done for the investor.”

But the company also clarified:

“Not all projects requesting funding will reach the platform. Notarial transactions are also made convenient for the investor. The loan is prepared with great care. The investor does not have to worry about mortgages or other contractual arrangements.”

If you’re interested in making your life “comfortable,” then you may consider setting up Auto Invest under your EstateGuru account, which “makes investments on behalf of the investor exactly according to the criteria you set.”

This way, in only a few months, you might be able to get a “reasonably” diversified portfolio of real estate loans, which will “make you extra money without much effort,” EstateGuru noted while adding that the application is like the Growth Account provided by banking institutions for securities.

But unlike the securities portfolio, their Auto Invest doesn’t have a transaction fee or “fixed cost,” which aims to ensure that income shown as interest in the loan description “will be credited to your account in exactly this amount.”

By setting up Auto Invest, you are able to ensure that you don’t miss a project that “appears on the…


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