Investing in real estate without buying a property: SCPI, crowdfunding, REITs

Estimated reading time: 6 minutes

Real estate is often seen as a safe and profitable investment, but buying a property requires significant capital, time and active management. Fortunately, there are several alternatives for investing in real estate without having to directly purchase a home. Among them, Real Estate Investment Trusts (SCPI) , real estate crowdfunding and Real Estate Investment Trusts (REITs) provide access to real estate returns with a lower entry ticket and simplified management.

SCPIs: a turnkey investment

SCPIs are companies that collect funds from investors to purchase and manage a portfolio of real estate assets (offices, shops, specialized residences, etc.). By investing in an SCPI, you become a partner and receive rents proportional to your investment.

Advantages of SCPIs:

• Immediate diversification thanks to a varied portfolio of assets.
• Management fully delegated to a management company.
• Attractive returns (generally around 4 to 6% per year).

Disadvantages:

• Limited liquidity: selling your shares can take time.
• Sometimes high entry fees (around 8 to 10% ).
• Taxation can sometimes be heavy depending on your situation.

Real estate crowdfunding: financing short-term projects

Real estate crowdfunding allows investors to lend money to developers to finance construction or renovation projects. In exchange, they receive interest on their invested capital, with an investment period generally between 12 and 36 months .

Advantages of real estate crowdfunding:

• A low entry ticket (from €1,000 on certain platforms).
• High returns, between 7 and 12% per year.
• A limited investment period, ideal for short-term investments.

Disadvantages:

• Risk of promoter default (although reduced by rigorous selection of projects).
• No capital guarantee: if the project fails, you can lose your investment.
• Almost zero liquidity: the money is blocked until the end of the project.

REITs: real estate listed on the stock exchange

Real Estate Investment Trusts (REITs) are the equivalent of SCPIs but in the form of shares listed on the stock exchange. They allow you to invest in a portfolio of real estate assets while benefiting from high liquidity.

Advantages of REITs:

• Full liquidity: shares can be resold at any time.
• Broader geographic and sectoral diversification (commercial real estate, healthcare, logistics, etc.).
• Attractive returns and favorable taxation in certain countries.

Disadvantages:

• Higher volatility than SCPIs or crowdfunding.
• A dependency on stock market fluctuations.
• Management fees included in the share valuation.

Which solution should you choose according to your profile?

• Are you looking for a stable and regular income? SCPIs are an excellent option for collecting rents without active management.
• Do you want a dynamic short-term investment? Real estate crowdfunding offers high returns but with higher risk.
• Do you prefer flexibility and liquidity? REITs allow you to invest in real estate without constraints and with easy resale.

Conclusion

Investing in real estate without buying a physical asset is now more accessible than ever. Whether through SCPIs , real estate crowdfunding or REITs , each option has advantages and disadvantages depending on your investor profile. Before you get started, it is essential to analyze your objectives, your investment horizon and your risk tolerance in order to choose the most suitable solution.