Investing in real estate without buying a house: Crowdfunding and REITs
💡 Quick Tip
Discover how to enter the profitable real estate market without needing thousands of euros for a down payment. Learn to use crowdfunding and REITs to collect rents and gain profits with just a €50 investment.
The brick-and-mortar myth
Traditionally, investing in real estate meant saving decades for a 20% down payment, dealing with mortgages, unpaid rents, and broken pipes. Fortunately, technology has democratized access to real estate. You can now be a "landlord" from your sofa.
Option 1: Real Estate Crowdfunding
Crowdfunding pools money from hundreds of small investors via an online platform to buy or build properties.
- How it works: You contribute €500 to a project. The platform buys the flat, renovates, and rents or sells it.
- Benefits: You receive proportional monthly rent or your share of the profit upon sale. No tenant headaches.
- Risk: Money is locked (illiquid) until the project finishes (often 1-2 years).
Option 2: REITs / SOCIMIs (Stock Market)
REITs (Real Estate Investment Trusts) are large publicly traded companies managing malls, offices, and apartments.
- How it works: You buy their shares through a broker, like buying Apple stock.
- Benefits: By law, REITs must distribute most collected rents to shareholders as dividends. You collect rent quarterly.
- Total liquidity: You can sell shares instantly during market hours.
Immediate diversification
With very little money, you diversify risk. Instead of one house in one city, your money is spread across dozens of buildings worldwide.
📊 Practical Example
Practical example with real numbers
You have €1,000 to invest in real estate.
You open a fee-free broker account and buy shares in a Global REIT ETF (a basket of hundreds of global real estate companies).
This fund pays an annual dividend yield (collected rents) of 5%.
- Every year, you collect €50 in clean dividends, deposited automatically.
- Additionally, if property values rise over the years, your shares increase in value.
You are collecting rent from London malls and New York offices, having invested only €1,000, with no notary fees, no mortgages, and zero broken washing machines to fix.
