Housers Review – Results After One Year of Investing
In this Housers Review, I share with you my opinion and the returns archieved after one year of investing. As a Spanish who is living abroad, I have an international investor account but have access to the information written in Spanish, which is more abundant than in English.
Housers is a real estate crowdfunding platform that facilitates access to equity loans related to real estate transactions promoted by third-party companies, previously analysed and validated.
It was launched in Spain in January 2016, expanded to Italy in April 2017 and Portugal in August 2017, allowing investors to diversify their portfolio across three different countries. However, as I will show you later, investing only in the Spanish real estate market will offer you the best returns.
The founders are Tono Brusola and Alvaro Luna and its CEO is Juan A. Balcazar. The company has registered offices in Madrid, Valencia, Milano and Lisbon.
Housers is supervised and regulated by the Spanish CNMV financial market supervisory authority and uses Lemon Way as a third-party payment institution (like a Pay-Pal system), registered in France and authorised by the ACPR – Banque de France, in which investors hold a segregated account. This means that investors money is held separately from each other and Houser’s funds, which will make things run easier for investors in the case of a future turmoil like a bankruptcy.
How it works?
Like most of the crowd investing platforms, Housers works as a connector between investors and borrowers. The platform offers three main types of investments: Buy-to-let, Buy-to-sell and Development loans.
Buy-to-let opportunities are somehow confusing, as it first seems that we own a share on the property, but what we are really doing is lending money to a developer company, which will use this funds to buy, renovate, rent a property and sell it after a few years, normally 5 or 10. The developer must pay interest to lenders, that relates to the income it gets from renting the property and must return the capital back after the agreed term. Investors participate in an investment opportunity, becoming a partner of it, but don’t own the property.
The rental yield normally oscillates between 3-5% and is paid during the first 15 days of the month.
I currently hold 6 buy-to-let projects in my Housers portfolio. The rental income has been generally stable, except for a couple of times, where tenants didn’t pay the rent on time, or some maintenance and running cost had to be covered.
Buy-to-sell opportunities work similarly as buy-to-let, but instead of renting, the properties are sold after the renovation period. We receive principal and interest only after selling. Yields average 7-8%
During my early days, I invested in two buy-to-sell opportunities. Today, they both exited successfully a few months earlier than expected. The first one delivered a better than expected return +0.9%, while the second one was short by 1%. (see my Portfolio Update #2 and #3 for exact numbers)
Development loans opportunities
As in many other platforms, when we invest in development loans, we grant a fixed interest rate to a developer for a real estate development.
This is the opportunity type that has performed better during my first year of investing. The yields are higher, averaging between 8 to 10% with an estimated term that ranges between 12 and 60 months. I currently hold 5 projects, which have always been paid on time. Although the risks here are higher, I will quite possibly invest more in this type of investment than in buy-to-sell projects in the future.
Returns to investors and statistics
According to their website, these are the current average returns estimated on their existing projects:
- Buy-to-let annual IRR (rental + capital gains): 7.75%
- Buy-to-sell annual IRR: 7.94%
- Development loans: 9.81%
Some more statistics:
- Over 100,000 registered users
- 155 nationalities registered
- Total amount raised is over 80M €
- Over 850 properties which 200 have been exited
- Over 26M € returned to investors
- Incident index: 6.63% (delayed)
Housers analyses and rates every project from A to G, being A the safest and G the riskiest. An opportunity with a score of A or B represents a minor risk but also a lower annual yield – this is where most of the buy-to-let opportunities rank for. Buy-to-sell and development loans normally stay between C-G.
These are the main key factors they consider when scoring: location, project developer’s experience, sale price, construction, valuation price, big data price, financial ratios, working capital, credit capacity models, and guarantees.
Resell market (Direct Communication Channel)
Housers gives the option to sell your investments before exiting in the resale market. Because of CNMV regulations, investors are forced to sell at the initial buying price, the chance of selling at a premium or discount doesn’t exist in Housers. However, it is still quite active. I sold Spanish property shares easily. But, whenever I tried to sell shares from the Italian and Portuguese markets it took some time, sometimes weeks or months. So again, I would recommend investing only in the Spanish.
Housers charges 10% of your profits. No maintenance account, buying, reselling or withdrawal fees. You can find a detailed PDF document online with all the details laid down.
Housers deducts taxes of your profits automatically. The deduction amount depends on investors’ and developers’ fiscal residence, which I had no idea about it until now.
Investing only in the Spanish Real Estate market should translate into getting better returns.
Who can invest with Housers?
Worldwide individual investors (see exceptions down below) and legal entities (companies).
Exceptions: Afghanistan, Barbados, Belarus, Burma, Bosnia-Herzegovina, Bosnia, Burundi, Korea, Egipt, United Arab Emirates, Ethiopia, United States of America, Guatemala, Guinea, Guinea-Bissau, Iran, Iraq, Lebanon, Libia, Macau, Mali, Mongolia, Namibia, Panama, Central African Republic, Congo, Russia, Samoa, Somalia, Sudan, Sri Lanka, Syria, Ukraine, Venezuela or Yémen.
- Minimum investment amount 50€
- The registration process can take up to 3 days.
- Payment methods: Bank transfer or credit card (5000€ maximum at once).
- No buyback guarantees.
- Auto invest feature is not available.
- Financial health unknown, the last published results were in 2016.
Refer a friend program
Housers refer a friend program is quite engaging. If new members deposit and invest in a new project* a minimum of 50€ through a referral link, he/she gets a 25€ bonus, which can be only invested and not withdrawn. But, as the minimum you can invest in the platform is 50€, the new member will have to deposit an extra 25€ if he/she wants to invest the bonus. Summarising, depositing 75€ gives a total of 100€ to invest. If you join using my “refer a friend link”, I will get another 25€, which I will donate to charity by the end of 2019. (further info here)**
* Money needs to be invested in a new project and not in the resell market
*Check out whether the refer a friend program is available prior joining, as sometimes it’s not valid. Ask Google or leave a comment down below if unsure.
Housers future outlook and recent news from the CEO Juan Balcazar
- A new modern investor private area will be added.
- Addition of automatic monthly deposits to the Housers wallet.
- A new project information temporal line, which should give more detailed and transparent information about how our investments are performing.
- Housers platform will be moved to Amazon Web Services Cloud, improving website speed and agility.
- A new Housers App to track investments directly on our smartphones.
It seems that Housers is still hungry to expand even further, which transmits positivism regarding its future outlook.
New properties price index average (Spain)
Spain was badly hit by the housing bubble in 2007, real estate prices continued to drop until 2015, when it began to slowly recover from the hit. Housers was cleverly launched in 2016, just after the real estate market showed signals of recovery. Since then, the prices have been moving forward and the future expectations seem to be positive. However, past performance is not a guide to future results, so remember to do your own due diligence first. I’ll be happy to hear your thoughts down below the comments.
- Image taken from st-tasacion.
The website at a glance
The website is what I like the most in Housers, a beautifully well designed, organised and easy to use website. I know, that won’t make you any money, but you will at least enjoy a few minutes of great charts and graphs ;). This time, instead of posting tons of screenshots from my dashboard, I have recorded a short video, so you can get a better overall idea of how the site looks while spying on my investments and earnings after one year of investing.
My returns after one year of investing
- Portfolio value: 6,645€
- Transactions (Deposits – Withdrawals): 6429 €
- NET earnings after one year (Portfolio Value-Transactions): 216 € (ROI=3.9%) *
- Earnings after fees: 264 € (ROI=4.7%)*
- GROSS Earnings (no fees and taxes): 296 € (ROI=5.3%) *
*Please note that this includes a 25€ initial referral bonus, which is not included in the above platform video.
The capital gains on properties are not included, as they haven’t been reported by Housers yet. This ROI could see a potential change upwards after the next valuation round. According to “La informacion” site (Spanish), the real estate market in Spain increased an average of 6.7% in 2018. If I count this as a fact, then my approximate real gross ROI could be somewhat close to 10%, which would look much better.
However, this is just an estimation and the value I will be looking at is the earnings after fees 264€ and the 4.7% ROI. Why is that the one that matters to me? Because it’s the one I can use to compare returns with other platforms, that don’t deduct taxes automatically.
- Property Partner ROI after one year: 6.9% (read review here)
- Housers ROI after one year: 4.7%
As the chart shows, I opened an account and started investing with Housers in March 2018. During the next following 4 months, I kept depositing money monthly until I decided to stop, as I thought I should diversify money across other investment platforms. During this first year, I withdrew money three times, getting the funds deposited the first or second day after requesting, fast and reliable.
The monthly earnings on my chart are different than the Housers one from the video. Why? Every month I do the calculation myself from my housers income statment, while Housers follows a different system. It’s easier to understand using an example: If a tenant doesn’t pay in January, and pays double rent in February – to cover the January delayed payment, housers will spread the money beteween January and February, while on my chart it will be diplayed all in February.
- Friendly and great looking website.
- Property diversification across three countries.
- Positive future outlook.
- Engaging referral program.
- Documentation transparently displayed.
- Debit Cards accepted.
- Investors don’t own the property.
- No premium/discount in the reselling market.
- 10% fees and taxes charged.
- Low returns
Certainly, the returns on Housers after one year of investing are the lowest within my property crowdfunding platforms portfolio. It’s not the best platform to use if you are just after maximizing your passive income, but it offers an interesting South European marketplace, excellent to expand and diversify your real estate portfolio across other European countries.
My experience so far has been positive. I won’t invest more money, but I am not planning to stop using the platform either.
I’m not paid or employed by Housers. I have invested and continue to invest my own money through this platform. The sign-up links on this website are referral links. When you sign up for an account through my website, I may receive a referral fee directly from the companies, and sometimes you will get a commission too.
** This Housers review is for information purposes only and should not be regarded as investment advice. Opinions expressed in this Housers review are current opinions based on my own personal experiences. Equity investing contains risks, so never invest more than you can afford to lose. **