Real estate crowdfunding vs direct investment: what to choose in Belgium?

Two models of property investment

Real estate crowdfunding has attracted thousands of Belgian investors in recent years. With entry tickets from 100 EUR and advertised yields of 6 to 9%, the promise is attractive. But comparing these figures with direct rental yield is misleading.

Direct investment means buying a property, letting it and collecting rent. Crowdfunding means lending money to a property developer via a platform, in exchange for a fixed interest rate over a set period. These two approaches have neither the same risk profile, nor the same taxation, nor the same liquidity.

Yield compared: watch the numbers

Crowdfunding yield appears higher, but you must factor in the default rate (2 to 5%) and the absence of capital gains. Crowdfunding is a loan, not a purchase: you do not benefit from property appreciation.

Risks and liquidity

Direct investment

• Protection: you own the property, you can resell
• Liquidity: low (resale 3 to 12 months)
• Control: total over tenant, rent, works

Crowdfunding

• Protection: you are a creditor, not an owner. In case of bankruptcy, you rank behind banks
• Liquidity: nil during the loan period. No secondary market in Belgium
• Control: none over project management

Direct investment allows you to secure your income through a solid lease and structured rental management.

Belgian taxation: an advantage for direct investment

Direct investment:

• Taxation on indexed cadastral income + 40% (not on actual rent)
• Capital gains exempt after 5 years of ownership

Crowdfunding:

• Interest subject to 30% withholding tax
• No deduction possible, no tax advantage linked to long-term ownership

On a 7% crowdfunding yield, 4.9% remains after withholding tax. On a 3.5% net direct rental yield, the effective taxation is often below 1% thanks to the cadastral income mechanism. The real gap between the two is therefore much smaller than it appears.

Which model to choose?

• Limited capital (< 30,000 EUR): crowdfunding allows you to start. Diversify across 5 to 10 projects. Favour FSMA-licensed platforms.
• Sufficient capital (> 50,000 EUR): direct investment offers better risk-adjusted yield and tangible assets. Start with a flat in a profitable city.
• Mixed strategy: combine direct investment with crowdfunding (10-15% of portfolio).

Always calculate the actual net yield factoring in Belgian taxation and the specific risks of each vehicle.