This is the first licensed buy-to-let crowdfunding platform of its type not only in Lithuania but in all of Euro-zone that offers a return of 80% on income from the underlying rental properties and a share in the potential capital gains upon sale of the property.
The company’s co-founder and CEO, Gustas Germanavičius, says that the idea came to him while developing a crowdfunding platform for the aggregator firm of EvoEstate when he noticed that the crowdfunding market was focusing only on development finance and not so much on real estate rentals.
“The first time that we approached the Bank of Lithuania for a license, we were very open that our mission and vision were to create the lowest risk crowdfunding platform in all of Europe based on rental properties. It is precisely the cash-flow from real estate rentals that decreases the investment risks because the property itself generates income,” said Mr. Germanavičius.
He also added that in pursuing its mission of lowering risks, investments are structured as loans that are secured by a mortgage. The investment yield has a combination of fixed and variable interest rates. This means that if the real estate loses its tenants and no longer generates rental income, a fixed rate would apply and the investor would still receive income from the investment.
“During our deal sourcing process, we aim to enter into an agreement with the project owner that 80% of the rental income would be paid out to investors. If the real estate is rented out, the investors receive 80% of the rental income, but if the property loses its tenant, the owners will payout fixed amounts of interest income. The remaining 20% is retained by the project owner of the property to cover administrative, upkeep and other expenses,” said the CEO of InRento.
The co-founder of the platform also stated that their goal is that 50%-70% of all capital gains would go to the investors since this would increase their return on investment.
The InRento platform plans to present its investment proposals not only in Lithuania but in other European countries as well, thereby creating opportunities for diverse investments in a number of different countries.
