A start-up company in Spain has taken its first step to perking up the country’s property market.
Housers, based in Madrid, is the first such platform to buy an apartment entirely by crowdfunding.
The goal of the start-up is to raise money to buy, build or renovate properties, mostly homes.
Small investments from, in this case, 45 investors enabled the purchase. All will have a share in the profits from its €450 a month rent as well as any capital gain if sold.
Housers puts developers and people who wish to make a small investment in touch with each other.
The minimum investment is reported to be in the region of €500, although this can be increased for larger projects. Housers says the project is for small investors, not big institutions.
This is a first in Spain, but already there are more than 100 different property crowdfunding sites in the US.
Should the concept take off in Spain, it could well help alleviate Spain’s property market, still limping seven years the bubble burst making values crash by more than 40% and leaving tens of thousands of properties as just skeletons.
Mortgages quickly dried up following the crash – numbers fell from 1.8 million in 2007 to a mere 314,000 in 2014. This hindered many potential buyers.
Now with the market beginning to raise its head again, the concept may become more interesting for modest investors.
Big investors are returning to Spain. Last year about €5 billion of foreign funds was invested in commercial real estate, according to CBRE Spain.
In three years’ time, Housers hopes to raise more than €300 million from some 10,000 investors to buy more than 1,500 homes.
The platform says it is compliant with the regulations of Spain’s new Crowdfunding Law which sets an investment limit of €3,000 per project and a maximum of €10,000 in a 12-month period and prohibits investors from depositing money directly with platforms. Housers has contracted a European payment entity, LemonWay, for this purpose.
Housers’ website, in Spanish, is primarily for investors in Spain but it expects to have an English version by the end of October to attract foreign investment.
