Peer-to-Peer Real Estate Lending During COVID-19

The impact that COVID-19 is having across the world is terrifying for many, and not only is it affecting our health for those who contract it, it’s also having a wider affect on businesses and the economy. One area though that is still a viable way of making money is through peer-to-peer real estate lending. Even though all investment opportunities have their risks, real estate investments are backed by a mortgage, which in itself is a very stable collateral. So with that in mind, here are some helpful tips for p2p real estate lending during COVID-19.

How to invest during COVID-19?

The main issue during this time of crisis is that no one knows where to put their money into without the risk of losing it. Stocks are great, but particularly at the moment, they’re very volatile. Crypto currency is risky, and investments in properties require a lot of capital. However, with p2p estate lending, you only need a little bit of capital to start off your investment on these dedicated real estate platforms. As these platforms are online, it’s one of the few surviving ways of doing business that don’t impact the operations of the platform, seeing as the staff can continue to work from home.

What Is Real Estate P2P Lending?

Real Estate P2P lending is an investment strategy where you are an investor that puts forward a small amount of money to fund various real estate projects via real estate platforms. Traditionally when you invest in real estate, you’re expected to put forward a lot of capital, but this peer-to-peer opportunity means that pretty much anyone with a small amount of capital can invest in real estate. The P2P real estate industry covers real estate loans, rental properties, real estate equity, or group buying. These are all great opportunities that, as an investor, you can be a part of.

Pros and Cons of Real Estate Lending

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So what are the pros and cons of real estate lending? Well, the benefits are that there is high interest that can be earned from your investment, and the most obvious one is that the capital you commit too means that anyone can invest, even if they only have a small amount to work with. This opens up the possibilities of investment for property to a much wider demographic, rather than for those who have two or three figures to work with. 

There are a number of cons to real estate investments, and that is the long capital commitment that you have to give for this to pay off. It’s not a short-term opportunity, and that might not be for everyone. Higher risks can also come with this type of investment, especially if sales targets aren’t met, or construction could be delayed. If property doesn’t end up getting rented out, there are no returns, and these investment agreements might not just be in English. It could be in the local language, which might make it harder for you.

Why Is Real Estate P2P Lending A Good Investment During COVID-19?

During this pandemic, a lot of other investment opportunities are too volatile or problematic for your money, and therefore, real estate p2p lending is one of the more secure options. With mortgage-backed investments, it’s a more stable opportunity, and the low payment you make as a loan can give you a greater value. The real estate p2p lending is also a lot less volatile than other p2p lending forms, such as business and consumer loans, as examples. The demand for real estate properties is increasing, especially in metropolitan areas, so there’s a lot of opportunity all over the place.

The investment returns can also be beneficial, and some have reported returns of +10% annually.

Even though the COVID-19 virus is causing significant economic problems around the world, there are still alternatives to investing your money that provide a healthy return. P2P real estate lending can certainly be an option if you’re willing to invest a small amount, and hopefully, once this is over, you’ll be able to expand and diversify your investment portfolio as we head back to some form of normality. Do your research on the peer-to-peer lending platforms available and make sure you know exactly what the risks are before you start parting with your money.

James Woods

Tech Geek and avid developer.

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James Woods

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