Poland: Will crowdfunding conquers the polish real estate market?

What is Equity crowdfunding? It is the online offering of private company securities to a group of people for investment and therefore it is a part of the capital markets. Because equity crowdfunding involves investment into a commercial enterprise, it is often subject to securities and financial regulation. Equity crowdfunding is also referred to as crowd-investing, investment crowdfunding, or crowd equity.

The mechanism that enables broad groups of investors to fund startup companies and small businesses in return for equity. Investors give money to a business and receive ownership of a small piece of that business. If the business succeeds, then its value goes up, as well as the value of a share in that business—the converse is also true. Coverage of equity crowdfunding indicates that its potential is greatest with startup businesses that are seeking smaller investments to achieve establishment, while follow-on funding (required for subsequent growth) may come from other sources. Recently, this type of campaigns is also possible in the real estate industry – Real estate Crowdfunding is a method of investing by a large group of individual investors, usually via the Internet, in selected on the real estate platform in exchange for shares in a company dedicated to a given project and although the investment in real estate is usually associated with large capital, it is not always necessary to finance it. Crowdfunding, or financing various types of projects through one-off payments by people interested in a given initiative, is becoming more and more popular. Even tens of thousands of zlotys are enough to become a shareholder and benefit from real estate investments.

This form of crowdfunding is gaining worldwide popularity. In Poland investment financing by a group of people buying up the so-called “brick” is still relatively unknown, but the situation is slowly changing. A minimum of 10,000 PLN is enough to invest, although the amounts are usually slightly higher. There are 30-40 investors per one tenement house, and the profit is proportional to the contribution. The rate of return can reach up to 20 percent. In Poland, the problem is still low awareness of property crowdfunding and a complicated formal process.

In the West, eg in the US, there are several dozen platforms that connect investors. In Poland, real estate crowdfunding is still relatively unpopular, and there are few companies involved in the group investing in real estate for rent. One of the groups that specialize in investing in real estate, since 2014 has collected about PLN 30 million of capital as part of its projects. This shows that property crowdfunding in Poland is slowly growing in strength.

The planners of ShareVestors.com service were guided by the idea of creating a tool from which everyone will be able to employ their capital. If ShareVestors.com is to be available to everyone, a minimum investment level of 1000 PLN has been set. Projects are calculated so that anyone who has even a thousand zlotys of free capital can invest in profitable projects.

The Mzuri group operates on the real estate market. The group consists of Mzuri – it is the first and currently the largest Polish company that manages flats for rent. It serves over 2,000 flats in over twenty cities throughout Poland. Mzuri Investments – helps in finding market opportunities and buying and renovating apartments. Over the past few years, she has helped in the purchase of approx. 500 apartments and several tenements. Mzuri CFI – crowdfunding special purpose companies implementing investment projects.

Social Estate is the new platform for real state crowdfunding. The project is based on the possibility of earning on real estate investments carried out by Petram House. Until now, the company has been building facilities for Biedronka, Rossmann, and Hebe. After starting the platform, the investment direction will not change.

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