Opportunities and risks of property crowdfunding in Switzerland
Property crowdfunding offers an alternative way to invest in the property market - even with small amounts of capital. But how lucrative and safe is this form of investment? We shed light on the advantages, challenges and important selection criteria for a successful investment.
For many investors, entering the property market without their own large capital is a challenge. Property crowdfunding platforms such as Crowdhouse, Foxstone and Crowdli now make it possible to participate in income from investment properties with smaller amounts. Investors invest in residential and commercial properties via co-ownership shares and benefit from rental income and potential increases in value. However, despite the advantages – such as a lower entry hurdle and active property management – it is important to know your rights and obligations as a co-owner.
Advantages and costs of crowdfunding
Crowdfunding allows investors to invest from as little as CHF 20,000 to CHF 100,000 and thus gain access to high-yield properties. Platforms such as Crowdhouse and Foxstone take over property management, which means that the role of investors remains comparatively passive. However, the investment is not without costs: platform and management fees as well as taxes on rental income reduce the return. Interested parties should check all costs incurred in detail and compare offers from different platforms.
Risks and challenges – what you should be aware of
As with any investment, there are also risks with property crowdfunding. In addition to the usual market fluctuations, there are challenges due to possible conflicts of interest among co-owners, high acquisition costs and the long-term commitment to a property. Experts recommend carefully scrutinising providers and diversifying the portfolio in order to spread the risk and cushion potential losses. Property funds offer a more flexible alternative for investors who want to remain independent.
Important selection criteria for successful crowd investments
When selecting a crowdfunding platform, the reputation of the provider is crucial. Platforms with a stable corporate structure and a positive track record are clearly preferable. Furthermore, the location of the property should be carefully analysed – preferably in economically strong regions with low vacancy rates. Personal dialogue with other investors and a detailed look at the contractual conditions increase the chances of a successful investment.
Property crowdfunding enables investors to enter the property market even with a smaller budget. Well-selected investments in high-growth regions can promise attractive returns, but costs, risks and long-term commitment should always be considered. With a diversified portfolio and a thorough examination of the platform and projects, a solid foundation for sustainable property income can be created.