When your Max Crowdfund account is successfully registered, you can start investing. Evidently, it is essential for you to know which choices you make and with which intentions. Therefore, we would like to provide you with 5 tips for investing in real estate crowdfunding projects via Max Crowdfund.
Tip 1: Spread your investments across projects from different countries.
In general, it is a good idea to create a diverse investment portfolio. With investing via Max Crowdfund, this is the case as well. Investing is accompanied by risks, and to spread these risks as much as possible, we encourage you to divide the total amount you want to invest over multiple projects. Even though we evaluate all projects before we decide to either publish them or not, and even though we will only publish those that are accompanied by a relatively low level of risk, the possibility that something will go wrong during the realization of a project will always remain present. If you would invest your total investment budget into one loan, and that particular loan would experience inconveniences, this would mean that all of your invested money would suffer the consequences of these problems.
The potential problems that could occur could have different causes. For instance, it would be possible that projects in a certain country would experience delays and that the corresponding loans that you as an investor are connected to, would have to be extended. Such extensions carry the consequence that you would not have access to your invested money for longer than expected. A situation in which your total invested amount would be impacted simultaneously by these kinds of unexpected problems, thus, is preventable by investing in multiple projects in different countries. When projects in one particular country would experience complications, then the investments that you made in projects from different countries will continue without being impacted.
Tip 2: Spread your investments across projects from different project developers.
Similar to complications with real estate possibly occurring in particular countries, project developers, of course, could also face certain obstacles during the process of realizing their projects. The same principle applies here to spread the risks of investing: make sure that you divide your investments over multiple projects. If a project developer faces problems, this could influence the rest of their projects. If you, as an investor, have invested all of your money into projects of the same developer, this would mean that all of your investments would experience the consequences of those problems.
Our second tip for you as an investor for reducing the risks of investing via Max Crowdfund is to diversify your investment portfolio with multiple projects from different project developers.
Tip 3: Think about how much money you could afford to invest.
Since we have just learned that investing is always accompanied by risks, the chance that you could lose (a part of) your invested amount will always remain present. Partly because of this, it is of great importance to think carefully about the total amount of money you could afford to invest. It would not be wise to invest with money you cannot afford to lose because this could cause you to experience financial problems.
We only want the best for our project developers and investors at Max Crowdfund. Therefore, we would like to protect you from the consequences of potential mistakes that could be made as a user of our platform. We encourage you not to invest any more than 10% of your financial assets via real estate crowdfunding to prevent a situation with financial problems.
Tip 4: Research the relevant documents that are provided with loans/projects.
When you want to invest via Max Crowdfund, you will find an overview of all the latest investment opportunities. On that page, all projects are displayed with corresponding basic information regarding the loan, such as the target amount of the project developer, the duration of the loan, the country in which the project will be realized, and of course, the interest rate that will be paid out to the investors. While this information could be very significant for you as an investor, there is much more to find out about the projects we publish on our platform. To discover if a particular investment opportunity would be interesting to you, you can click on the ‘More info’ button of that project. After this, you will be directed to the corresponding page, where you can find additional information about the loan, the project developer, and their project. Relevant documents such as a valuation report, an overall project calculation, the plot location map, a floor plan, and the loan agreement are (generally) all available on a project page. We encourage you to assess and research all of these elements of the investment opportunity so that you can make a well-considered decision to either invest in the project or not.
Even though we evaluate every project by performing a risk analysis, our fourth tip for investing via Max Crowdfund remains to take into account the relevant documents that are provided with loans/projects. This would be necessary not to overlook anything that could influence your decision on whether to invest or not.
Tip 5: Make sure that your account balance is sufficient at all times, so you never have to miss an investment opportunity!
In the previously mentioned case that a loan would have to be extended unexpectedly, this could mean that your invested money is not accessible for longer, while you might have expected to get it repaid to your account at a certain date. If you had constructed an investment plan in which you had accounted for a specific date of the end of the loan’s duration, this could thus lead to a situation in which you have insufficient funds in your account for an upcoming investment opportunity that you are interested in.
Therefore, our fifth and final tip is always to make sure you have sufficient funds in your Max Crowdfund account balance for when an investment opportunity comes up in which you would want to invest. This will prevent unfortunate situations in which you would be disappointed because you could not invest in an interesting project.
