Real estate funds vs Real estate crowdfuding

Real Estate
1

Dear experimented real estate investors,

I am looking at a real estate investment but I don’t wan’t to be a landlord (too much hassle).

Do you have any experience with some crowdfunding platforms ? Who’s behind them ? Is there any risks with investing with them ? I am worried because the minimum investment with them is 20000 CHF so it is (for me) quite a lot to spend without any insurance that this money will be looked after seriously.

On the other hand, there is the real estate funds (fonds immobilier). To me they look safer but you get less freedom about what you are investing in.

I’d love it if you were to share your experiences with both types of investment with me. Also, do you have any platforms to recommand ?

Thank you !

2

I woudn’t overweight real estate and stay with stocks.
However, if you really want to invest in RE. I would recommand a fond immobilier (not an ETF due to tax optimisation). I don’t advise crowdfunding as the risk is quite high and mostly project focused.

In any case, a fond immobilier has a low diversification. RE funds are country/area focused.

3

Real estate funds are way better in term of diversification. There is ~35 of them that are quoted. All kinds of funds exist :

  • Commercial (differents subcategories) / residential / different mixs
  • Funds that directly held the properties (tax savings for you), funds that held indirectly the properties (no tax savings) and even hybrids.
  • Funds that invest in different regions (Suisse Romande, Deutschweiz, Ticino, whole country, cities only etc.)
4

Thank you for your advise.
As part of my diversification, I’d like to invest something in real estate but I’d like to keep it simple.
I will have a look at the real estate funds. Do you have any broker to recommend as I see there is a lot on the market !

5

It depends of your criterias. How much do you want to invest ? How often ? Does it need to be a swiss broker?

6

Let’s say for a 1 time investment of CHF 10000.-- what would you advise ?
It doesn’t have to be Swiss, but it has to be reliable
Thank you

7

So IB would 10 USD a month ad vitam eternam after the initial 3 months. You would pay ~7 CHF to invest that ammount or twice ~4.5CHF if you choose to invest 50% in two funds.

Corner Trader now has the real estate mutual funds (which they previously refuse to add). They consider them as stocks and not funds. You will pay 20 CHF + 7.5CHF stamp duty to buy one fund (TOTAL = 27.5CHF) or 2x20 +2x3.75 = 47.5CHF if you buy two funds. After 12 months, you will pay 35CHF + VAT every quarter as inactivity fees. To open an account there you will need a certified copy of your ID. It costs 25 CHF at the post office. Notaries etc. can’t be cheaper…

Tradedirect will cost you 29.9 CHF + 7.5 CHF of stamp duty (warning : buy for 9999.95 and not 10’000). Then you will pay 10 CHF + VAT every quarter (free in 2020 if you register “now”).

EDIT : Swissquote will be 30 CHF + 7.5 CHF of stamp duty (warning : buy for 9999.95 and not 10’000). Then you will pay 15 CHF (+ VAT ?) every quarter.

I think if you are sure you don’t want to invest again, Tradedirect might be the best option on the long term.

8

Wow, thank you so much ! No y’a plus qu’à as we say in french (just have to).

This is so detailed, thank you for this valuable help !

9

About the topic “crowdfunding”: it’s really important to sort out what’s happening if the crowdfunding company goes belly up. Recent example: ImmoYou. https://insideparadeplatz.ch/2020/07/17/crowdfunding-immo-portal-konkurs/