Real Estate Crowdfunding in Switzerland: A New Way to Invest in Property

Real estate crowdfunding, also known as property crowdfunding, allows investors to invest in real estate properties and earn rental income in return. In this article, we provide an overview of this investment method, explaining how it works, its benefits, and the associated risks. Discover how real estate crowdfunding can be a suitable activity for Swiss investors looking to diversify their portfolios.

How Real Estate Crowdfunding Works: In Switzerland, real estate properties can be divided into co-ownership shares, allowing multiple investors to own a portion of the same property. When these properties are rented out, the rental income is distributed among the co-owners based on their share. Real estate crowdfunding platforms facilitate the purchase of these shares and enable investors to earn rental income.

The platforms offer a range of services similar to those provided by real estate agents, property brokers, and wealth managers. These services include studying regional real estate markets, identifying suitable investment properties, negotiating with property sellers and construction companies, managing the purchasing process, finding potential tenants, property management, rent collection, and more.

Real estate crowdfunding platforms charge fees, which can include one-time purchase commissions, recurring management fees, or fees related to property management. Additionally, there are costs such as mortgage interest, renovation funds, and maintenance expenses that are deducted from rental income. It is important to consider these costs before investing and compare them among different platforms.

Comparison between Real Estate Crowdfunding and Funds: Crowdfunding differs from traditional real estate funds in that investors directly own a share of a specific property. This offers greater transparency and direct involvement in the investment. However, real estate funds provide greater liquidity and easier portfolio diversification. It is important to understand the differences between these two approaches before making an investment decision.

Risks Associated: Like any investment, real estate crowdfunding carries risks. The main risks include the possibility of capital loss, insufficient property occupancy rates, costs associated with property ownership, mortgage liability, and dependency on the crowdfunding platform. It is essential to understand these risks and evaluate them in relation to your financial goals and risk tolerance.

Conclusion: Real estate crowdfunding offers Swiss investors a new opportunity to invest in real estate and diversify their portfolios. By understanding how it works, the benefits, and the associated risks, investors can make informed decisions. Before getting started, make sure to fully comprehend the terms, costs, and models of each real estate crowdfunding platform, and assess whether this activity aligns with your investor profile.