Harnessing fintech to connect investors and developers across Europe

by uma
Editorial & Advertiser disclosure

 

By:  Mihkel Stamm, Chief Operating Officer, Estate guru

Only a couple of decades ago it would have been almost inconceivable to have retail investors withfunds subsidisedin development projects scattered across the continent. It is true, to an extent, that real estate investment was a somewhat exclusive method of financing, especially internationally, and it was reserved for a small minority.

But now, fintech has opened the door to a new wave ofinvestors and provided a means for anybody who wants to enter the real estate market to do so from their own front room.The digitalisation of the market has boosted accessibility, streamlined the investment process and enabled online users to manage their finances in a convenient and easy way.

Accessibility

The benefit of wider real estate accessibility is two-fold. On the one hand, a larger pool of investors can manage their finances, protect their savings through property-backed investment, and augment their income – something particularly relevant at this current time with inflation at a 30 year high. On the other, developers can access this capital for their projects in a flexible way, especially SMEs that may have beenrefused service by more traditional high street banks or forms of funding.

One way to streamline the investment process is via a digital platform, puttingthe user in control. In the past, keeping tabs on investments was a hassle, and individualsmight expect to have to make multiple phone calls or even book an in-person appointment before they could find the answers they needed.Fast forward to today, and developers and investors alike have round-the-clock accessto their portfolio and can receive real time updates on all activityat the touch of a button.

Automation

Traditionally, the investment process was drawn out and could take weeks or even months to complete. But by transitioning into an online marketplace, where onboarding, background checks, exchanging of money and signing documents can all be done digitally, the virtual landscape has made the process far more efficient and seamless. Through digitalised processes, all of the above can be completed within days, or even hours.

For a lot of users, real estate investment is a source of additional income. It is likely that these individuals are pressed for time and, as such, some platforms offer automation features that help investors carry out the necessary due diligence, enabling a more efficient process without compromising on security. Estate guru, for instance, recently launched its Investment Strategies programme which automatically identifies investment opportunities for users based on a set of predefined parameters. It has several settings which vary in caution level, from ‘Conservative’ – which represents the optimal balance between average interest rate, collateral value, and a low-risk approach – to ‘Custom’ – which gives complete freedom for more experienced investors. Investors should always do their due diligence before committing, but this sort of tech can help give a little peace of mind by only presenting opportunities that suit the investor.

Integration

Integration plays a large role in boosting the accessibility of real estate investment. An evolving feature currently being rolled out by Estate guru is the direct integration of the digital platform to a user’s bank. In Estonia, for example, LHV Pank customers can log in to their online banking portal and access their investment portfolio from there.

By building a connected network such as this, users are able to manage their finances in a much more holistic and convenient way. Ease of use is imperative for any successful platform, and with information available all in one place, and real estate treated as an extension of an individual’s usualbanking, it contributes to a much better user experience.

The digital age provides a route into the international real estate market for consumers. Previously, adevelopment project in Eastern Europe might have been a several hour plane journey away, but today, users have access to dozens of these projects all over the continent in the palms of their hands. 

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