How Should Investors Choose Between Investment Platforms?
Recent developments in FinTech and alternative finance have opened up a raft of new investing opportunities, which appeal to everyday investors as well as more experienced hands. Investing is always a delicate balance of seeking optimal returns while minimizing and mitigating risk. With the market growing so quickly, how should investors choose which platforms they can trust? Start by asking these questions.
What is the history of the platform?
While previous performance is no guarantee of future potential, checking out the history of the platform is a sensible start to assessing the options.
You’re unlikely to find decades of investor returns data neatly archived away – even the most established alternative finance platforms are fairly young – but a platform which offers transparent, and thorough reporting for investors is a good start
What’s the knowledge base of the key decision makers?
With any emerging company, investors are betting on a business model and the experience, skills and drive of the key decision makers. The logic when choosing an online platform for your investors should be the same. Do the team articulate their skills, and does their track record show they’re worthy of your trust?
You can learn more about the key decision makers at EstateGuru here.
How are investments underwritten?
P2P lending of different forms is the most established segment of the alternative finance market. Platforms offer the opportunity to invest in loans for businesses or individuals, which may be secured by assets or unsecured. Before investing, you need to understand the platform’s approach to risk management. In the case of personal, consumer loans – which are usually unsecured – this will take the form of credit checking loan applicants.
All loans offered through EstateGuru are secured by a mortgage on a property or land. The property backing EstateGuru loans is always valued by one or two leading valuation companies in the market the security is based.
Local competence is crucial in making the underwriting decisions and EstateGuru team has built up the network of trusted partners every market the property loans are offered to investors. Not less important is the fact that mortgage or security is held by an independent security agent or trustee on behalf of investors, to keep it separate from the accounts of the platform. This offers the best possible protection to our investors.
What’s the risk/return ratio (and does it suit my needs)
All investments come with a potential risk and understanding how to maximize returns and minimize risks is part of the journey for every investor. Before committing to an alternative finance platform, investors should understand their own personal risk profile, and how different investment options could serve them.
Platforms which offer simple ways to diversify, by investing smaller amounts in different projects are appealing options, as diversification is generally seen as the best way for mitigating investment risk.
Choosing the right place to invest is an important decision, and some research is essential. At EstateGuru we are delighted to be the preferred choice of many investors, from beginners to experienced professionals.
Founder Marek Pärtel explains: “There is no fixed profile of an Estate Guru investor.
We have college students who make their first steps in the investment field starting with €50 and also professional investors whose portfolios exceed €500,000.”
We hope you will choose to join us, too. Learn how to get started as an investor with EstateGuru.