Real estate remains one of the favorite investments for French people. In 2024, nearly 58% of households consider property to be the safest investment, according to the savings barometer published by the Financial Markets Authority. However, the way people invest in real estate is evolving rapidly. Alongside classic buy-to-let investment, which involves purchasing a property to rent it out, a new option has become more popular: real estate crowdfunding. This model allows for the collective financing of real estate projects with a much more accessible entry ticket. Between potential yield, risk level, investment horizon, and personal involvement, these two strategies actually respond to different asset management logics.
The choice between real estate crowdfunding and rental investment
A short or long investment horizon
One of the first differences between real estate crowdfunding and buy-to-let investment concerns the duration of capital tie-up. In practice, these two investments do not fit into the same wealth management horizon.
Real estate crowdfunding generally operates over relatively short periods. Projects offered on specialized platforms last an average of 12 to 36 months, the time it takes for a developer to finance a construction, renovation, or property trading operation. Once the project is completed and the properties are sold, investors recover their capital as well as interest. According to the 2024 barometer from Finance Participative France, the average duration of operations financed by real estate crowdfunding is 22 months.
Conversely, buy-to-let investment is almost always part of a long-term logic. Buying an apartment or a house to rent it out generally implies a horizon of at least 10 to 20 years, especially when a mortgage loan is used. This duration allows for the amortization of acquisition costs, which often represent 7 to 8% of the property price for older buildings, and to benefit from the potential appreciation of the real estate market.
In concrete terms, this means that real estate crowdfunding can be perceived as an opportunistic or complementary investment, whereas buy-to-let investment constitutes more of a structuring wealth strategy.
Personal involvement in a buy-to-let investment
The difference between these two strategies is not limited to the investment duration. It also concerns the level of personal involvement required from the investor.
Real estate crowdfunding is often presented as a passive investment. The investor selects a project on a platform, invests a given amount, and then waits for the end of the operation. The operational management of the project — construction, renovation, marketing — is entirely handled by the real estate developer. For the individual investor, this translates into a relatively simple experience: no tenant search, no property maintenance, and no administrative management.
Buy-to-let investment works differently. Buying a home to rent it out involves several steps: property search, price negotiation, bank financing, potential works, leasing, and rental management. According to a study by SeLoger published in 2023, a landlord spends an average of 4 to 6 hours per month managing their property, even when using a real estate agency.
It is possible to delegate this management, but this represents an additional cost. Agencies generally charge 6 to 10% of the annual rent for rental management. This level of involvement therefore constitutes a determining criterion in the choice between real estate crowdfunding and buy-to-let investment.
The level of risk and possible diversification
Every investment involves a share of risk, and real estate is no exception. However, the nature of these risks differs between real estate crowdfunding and buy-to-let investment.
In the case of real estate crowdfunding, the main risk is linked to the success of the financed project. If the real estate operation encounters difficulties — construction delays, market decline, or commercial problems — repayment may be delayed or even compromised. Platforms generally indicate a relatively low default rate, but it exists. In 2023, the average default rate observed in real estate crowdfunding in France was approximately 6%, according to data from Finance Participative France.
Buy-to-let investment, on the other hand, relies on a tangible asset: a home. Even in case of difficulty, the investor remains the owner of the property. Risks concern rental vacancy, unpaid rents, or fluctuations in the real estate market. In France, the average rental vacancy rate is around 8% of the rental stock, according to data from INSEE.
Diversification constitutes another key point. With a few thousand euros, an investor can spread their capital across several real estate crowdfunding projects, which reduces exposure to a single project. Conversely, buy-to-let investment often concentrates a large part of the capital in a single real estate property.
Immediate income or a wealth management strategy
The choice between real estate crowdfunding and buy-to-let investment also depends on the objective sought: receiving income quickly or building wealth over the long term.
Real estate crowdfunding generally works according to a simple model: interest is paid at the end of the project, at the same time as the invested capital. Platforms often announce annual gross returns between 8% and 12%, although these performances are never guaranteed.
Buy-to-let investment follows a different logic. The rents received constitute a regular income, paid every month. In France, the average gross rental yield is between 4% and 6% depending on the city, with significant differences depending on the local market.
But the interest of buy-to-let is not limited to rents. Over the years, the repayment of the mortgage loan through rents allows for the gradual building of wealth. This mechanism explains why nearly 30% of French real estate investors use credit leverage, according to a study by the Observatoire Crédit Logement.
In this perspective, real estate crowdfunding and rental investment do not necessarily oppose each other. They simply respond to two different investment logics.
The mechanisms of real estate crowdfunding
Real estate crowdfunding
Real estate crowdfunding is based on a simple principle: allowing individuals to collectively finance a real estate operation carried out by a developer or a property dealer. In practice, these professionals often need equity to supplement their bank financing. Rather than relying solely on their own capital or that of institutional investors, they seek savings from individuals via specialized platforms.
In practice, the investor generally does not become the owner of the real estate project. They lend money to a project company, often in the form of bonds or participatory securities, which will be repaid at the end of the operation. The developer uses these funds to finance a key stage of the project: land acquisition, construction launch, building renovation, or property dealing operation.
This model has developed strongly in recent years. In France, real estate crowdfunding raised over 1.7 billion euros in 2023, according to figures published by Finance Participative France. The sector has experienced spectacular growth: the amounts collected have multiplied by nearly 15 in less than ten years. This dynamic is explained in particular by the accessibility of the mechanism and by yields that are often higher than those of traditional financial investments.
Potential profitability and lock-up periods
One of the main arguments for real estate crowdfunding lies in its potential profitability. Platforms frequently announce annual returns ranging between 8% and 12% gross, which significantly exceeds those of many traditional savings products.
However, this return is accompanied by a fundamental principle: the capital is locked up for the entire duration of the project. Unlike some financial investment solutions, there is generally no secondary market allowing for the resale of securities before maturity. The investor must therefore wait until the end of the real estate operation to recover their capital and interest.
In practice, the announced durations often fluctuate between 12 and 36 months. However, it should be noted that delays are relatively common in real estate projects. According to the 2024 real estate crowdfunding barometer published by Fundimmo, nearly 30% of operations experience a schedule shift, often linked to administrative delays, construction constraints, or the marketing of the housing units.
This does not necessarily mean that the investment is compromised, but one must accept that the initial duration may be extended.
An accessible entry ticket to invest
One of the reasons for the success of real estate crowdfunding is its financial accessibility. Unlike traditional rental investment, which often requires several tens of thousands of euros in a down payment, it is possible to start with relatively modest amounts.
On most French platforms, the entry ticket is between 1,000 and 2,000 euros per project. This accessibility allows many savers to discover real estate investment without mobilizing significant capital or taking out a loan.
This low barrier to entry also facilitates investment diversification. An investor with 10,000 euros can, for example, spread their capital across 5 to 10 different projects, located in different cities or on varying types of operations. In theory, this diversification reduces the impact of a potential default on a specific project.
Conversely, a classic rental investment generally involves purchasing a single property, the average price of which in France reached approximately 243,000 euros in 2024, according to data from French notaries.
Taxation applied to real estate crowdfunding gains
Taxation is a determining factor in the real profitability of real estate crowdfunding. The gains received by investors are generally considered income from movable capital.
In the majority of cases, they are subject to the flat tax (PFU), also known as the "flat tax." This tax amounts to 30%, divided between 12.8% income tax and 17.2% social security contributions. Thus, a gross yield announced at 10% actually corresponds to a net yield of approximately 7% after tax, except in special cases.
It is also possible, in certain situations, to opt for taxation according to the progressive income tax scale. This option can be advantageous for taxpayers with low tax rates, but it depends on the individual tax situation of each investor.
This relatively simple taxation is an advantage in terms of readability. However, unlike rental investment, real estate crowdfunding does not benefit from specific tax schemes or depreciation mechanisms to optimize taxation.
The characteristics of buy-to-let investment
A tangible real estate asset generating rent
Rental investment is based on a fundamental principle: acquiring real estate with the goal of renting it out to receive regular income. Unlike real estate crowdfunding, here the investor becomes the full owner of a tangible asset that they can occupy, pass on, or resell.
This concrete dimension largely explains the appeal of rental real estate for the French. According to INSEE, nearly 7.3 million housing units are currently rented out by private owners in France. Real estate remains perceived as a relatively stable asset, capable of generating both income and asset valuation over the long term.
Rents constitute the primary driver of profitability. On average, gross rental yields in France range between 4% and 6%, but certain markets can exceed 7%, particularly in student cities or in areas where purchase prices remain affordable. Cities like Saint-Étienne, Perpignan, or Limoges, for example, show gross rental yields higher than 8%, according to 2024 data from the MeilleursAgents barometer.
But the interest in rental property is not limited to immediate yield. Over the years, the repayment of the mortgage and the possible appreciation of the property allow for the gradual building of a real estate portfolio. In some large metropolises, prices increased by more than 40% between 2015 and 2023, which strengthened the wealth-building interest of this type of investment, despite recent market fluctuations.
Bank financing and real estate leverage
One of the main advantages of rental investment lies in the possibility of using the leverage effect of mortgage credit. Specifically, the investor can acquire a high-value property by mobilizing a limited amount of personal capital.
In most cases, the real estate purchase is financed by a bank loan over a period of 15 to 25 years. The rents received then contribute to repaying the monthly credit installments. This mechanism allows for the building of an asset base, part of which is financed by the tenants.
Let's take a simple example. For an apartment purchased for 200,000 euros, financed by credit over 20 years with a rate of 3.5%, the monthly payment may be around 1,150 euros excluding insurance. If the property is rented for 900 euros per month, the investor's actual savings effort is limited to approximately 250 euros per month, while progressively building a real estate asset.
This mechanism explains why rental investment remains a widely used wealth management strategy. According to the Observatoire Crédit Logement, nearly 38% of mortgages granted in 2023 concerned rental investment projects.
Real estate crowdfunding does not allow for this type of leverage. The investor must mobilize 100% of the invested capital, which mechanically limits the capacity for wealth development.
The charges, management, and constraints of rental property
While rental investment may seem attractive on paper, it also involves a number of operational and financial constraints. Buying real estate means assuming the charges related to its management and maintenance.
Among the most frequent expenses are non-recoverable co-ownership charges, property tax, maintenance work, or potential vacancy periods. On average, these costs represent 15% to 25% of the rents received, according to estimates by the Observatoire de l’Immobilier Locatif.
Daily management is also an element to consider. Searching for tenants, drafting the lease, performing the move-in inspection, following up on repairs, or managing unpaid rent: these tasks can quickly become time-consuming. To simplify this management, some owners choose to entrust their property to a real estate agency.
In this case, management fees generally represent 6% to 10% of the annual rent, to which leasing fees may be added. This delegation reduces the investor's involvement, but it also decreases the net profitability of the project.
Despite these constraints, rental real estate retains a significant advantage: the investor keeps direct control over their asset. They can decide to carry out work, optimize the rental, or resell the property depending on market trends.
Taxation and real estate schemes
Taxation plays a decisive role in the actual profitability of a rental investment. Unlike real estate crowdfunding, it can be optimized through several tax mechanisms.
In the case of an unfurnished rental, rents are taxed in the category of property income (revenus fonciers). The investor can then deduct certain charges, such as loan interest, work, management fees, or property tax. This mechanism sometimes allows for a significant reduction in the tax base.
Furnished rental also offers an interesting tax advantage. Under the status of non-professional furnished lessor (LMNP), it is possible to depreciate the value of the real estate and the furniture. In many cases, this depreciation allows one to neutralize the tax on rents for several years.
Furthermore, certain tax schemes were created to encourage rental investment. The Pinel scheme, for example, allowed for several years to benefit from a tax reduction of up to 17.5% of the property price, under certain rental conditions and commitment periods.
Real estate taxation remains, however, more complex than that of real estate crowdfunding. It often requires accounting or tax assistance to optimize the wealth management strategy.
The wealth management objectives behind each strategy
Creating a supplement to income with rental real estate
For many investors, the main objective of rental investment is to generate a stable supplementary income over time. The rents collected each month can gradually constitute a regular source of income, particularly interesting when approaching retirement.
In France, nearly 17% of retirees have rental income, according to data published by the Directorate for Research, Studies, Evaluation and Statistics (DREES). For these buy-to-let owners, rents often represent a lever for financial security in the face of falling income after working life.
In practice, many investors adopt a progressive strategy. During the term of the mortgage, the rents are mainly used to repay the monthly installments. Once the loan is finished, the rents then become a much more significant net income. For example, an apartment rented for 800 euros per month can generate nearly 9,600 euros in annual income once the loan is paid off, excluding costs and taxes.
This logic explains why rental investment is often integrated into a retirement preparation strategy or the building of passive income over the long term.
Quickly diversify your capital with real estate crowdfunding
Real estate crowdfunding follows a different wealth management logic. It does not necessarily aim to produce regular income, but rather to diversify capital and seek an attractive return over relatively short periods.
Thanks to an entry ticket generally between 1,000 and 2,000 euros, it is possible to spread your savings over several real estate projects simultaneously. This diversification can concern different cities, different developers or different types of operations, such as real estate development, building renovation or property dealer operations.
In practice, some investors use real estate crowdfunding as a supplement to other financial investments, notably life insurance or stock market investments. The average yield observed on French platforms stands at around 9.2% gross in 2023, according to Fundimmo's annual barometer.
However, this strategy must be approached with caution. High yields also reflect a higher level of risk than more traditional investments. Diversification over several projects therefore remains a common practice to limit the impact of a possible default.
Building real estate assets over the long term
Beyond immediate income or yield, the central question remains that of wealth building. It is on this point that rental investment retains a structural advantage.
Owning a property allows you to hold a lasting asset, which is likely to increase in value over time. Although the real estate market experiences cycles, the trend over several decades remains generally upward in many urban areas. According to data from the Notaires de France, real estate prices increased by an average of nearly 120% between 2000 and 2023 across the entire territory.
This potential appreciation, combined with the progressive repayment of the loan, allows the investor to build tangible assets that they can pass on or resell. In many wealth management strategies, real estate thus represents a pillar of diversification compared to financial assets.
Real estate crowdfunding, for its part, does not allow for the direct construction of lasting real estate assets, since it is essentially a financial investment backed by real estate projects. It can, however, play a complementary role, notably to boost savings or to indirectly access the real estate sector with more limited capital.
What to remember
Choosing between real estate crowdfunding and rental investment depends primarily on the desired asset management strategy. Real estate crowdfunding is attractive because of its accessibility, simplicity, and potentially high yields over relatively short periods, generally between 12 and 36 months. It often serves as a diversification tool for investors wishing to expose part of their savings to the real estate market without directly managing a property. Rental investment follows a different logic: it allows the holding of a tangible asset, taking advantage of credit leverage, and gradually building an income-generating estate. In practice, these two approaches are not necessarily opposed. When used correctly, they can instead complement each other in a balanced asset strategy, combining yield, diversification, and a long-term vision.
