Goodcity Review: what you need to know before investing int this fractional real estate platform

IN SUMMARY

Key figures - Goodcity

Should you invest with Goodcity?

Goodcity is a promising platform, but its long-term viability remains to be proven. While its intuitive interface and accessibility may appeal to investors, certain limitations remain. The platform doesn't yet explain the ins and outs of the investment (holding period, legal entity, frequency of interest payments), and although it promotes interesting flexibility, no secondary market has been set up to resell shares and guarantee better liquidity.

Advantages and disadvantages

Why did we write this guide?

Choosing where to invest your money is a complex decision. Equities, PEAs, life insurance, ETFs, bonds and even cryptocurrencies all have their place in a modern portfolio, but real estate remains the asset class of choice for the French, although it is often misunderstood. In recent years, a number of companies have emerged with the promise of simplifying real estate investment by removing upfront contributions, improving liquidity and making access more flexible through fractional ownership. In this fast-changing environment, it's becoming harder than ever to know who to trust, and to understand exactly what commitments are associated with an investment.

We've taken a closer look at Goodcity, analyzing the essential elements that every investor needs to consider before taking the plunge: simplicity of investment, potential gains and options for recovering capital once goals have been achieved.

NB: For the sake of transparency, we would like to specify that we are Harmony, one of these new real estate companies. Harmony enables you to buy shares in properties intended for short-term rental. We believe that all competition is healthy, and that the growth of this market will enable everyone to find their place in it. In this context, providing a factual analysis of other real estate companies through the prism of our sector expertise helps both consumers or investors and the companies that provide them with a service. That said, we are not in the business of providing personalized investment advice or recommendations.

THE BASICS

What is Goodcity and how does it work?

Goodcity is a platform that enables private individuals to invest in commercial real estate easily, with attractive returns and without the hassle of rental management.

Investment on Goodcity is based on the acquisition of shares in carefully selected commercial properties. Investors receive monthly rental income in proportion to their investment, with the option of reselling their shares on the platform. Thanks to its “Local Matching” algorithm, Goodcity relies on technology to identify the most promising opportunities and optimize profitability, while promoting a transparent and accessible approach.

Who can invest?

We have no information on who can invest on the platform. Will it be open to individuals and companies? Foreign residents? We'll see in the future.

How do they find properties?

Goodcity selects its properties using its “Local Matching” algorithm, which analyzes the commercial real estate market to identify the most promising opportunities. The platform favors strategic locations in medium-sized cities, where rental demand is strong and yields attractive.

What experience do they have?

Goodcity is a relatively new platform, and its experience in commercial real estate investment has yet to be proven. Unlike some established players, it does not yet benefit from a long track record of performance. However, the team's expertise combines technology and real estate, notably through its property selection algorithm. It remains to be seen whether this innovative approach will live up to its promise over the long term.

Security & reliability

Goodcity uses a pledge system to secure investments, offering additional protection in the event of default. In addition, it works with MangoPay, a trusted partner, to ensure secure management of investor payments and funds. Although the platform is still in its infancy, these security measures reinforce user confidence and testify to Goodcity's commitment to providing a reliable and transparent experience.

EASE OF USE

How easy is it to invest with Goodcity?

Before embarking on an investment, it's crucial to understand what you're getting your money into. It's not always as simple as it sounds.

What can you invest in?

With Goodcity, investors have the option of investing in bonds, which allow them to benefit from a share of the rental income as well as a share of the capital gains generated when the properties are resold.

Property and location

At present, it's essential to rely on Goodcity's investment strategy to determine where you can invest. The platform features commercial properties, carefully selected thanks to its “Local Matching” algorithm. These properties are located in medium-sized towns or on the outskirts of major cities, offering strong rental potential.

We don't yet know whether the first properties on offer will match this approach, as the profitability of investments will depend on a number of factors, such as specific location, property quality and renovation requirements. It will be interesting to follow the evolution of Goodcity's offer to assess the consistency and performance of the projects over the long term.

Minimum investment

The minimum investment at Goodvest is €1,000, which we believe is affordable for diversifying your assets while still being substantial enough to benefit from quality service.

‍Documentation and analysis

When the first properties come out for investment, we'll know what elements are presented so that investors can study the project, with figures to back it up.

How to invest

Goodcity's platform seems simple to use and well presented.

For the moment, you can only register to be notified when the first property is launched.

POTENTIAL RETURNS

Goodcity Returns - How much can you earn?

There's one key reason to invest in real estate: to use your existing capital to generate more. When it comes to choosing an investment platform, expected returns and fee structure are the two main factors that determine how it generates profits for its users.

Annual rental yields

Goodcity announces a target return net of non-guaranteed fees of between 8% and 12%. This sounds quite ambitious compared to other fractional real estate platforms such as Harmony Homes or Fragments. Bear in mind that risk increases with yield.

Frequency of rent payments

The platform has not yet specified the frequency with which rents will be paid to investors.

Expected capital gain

Capital gain is the difference between the purchase price and the sale price of a property. Goodcity focuses on properties with high rental yield potential, which means that the emphasis is more on the cash flow generated by the properties than on appreciating their value.

We'll have to wait for Goodcity's first offers to see if they announce an estimated revaluation on this asset class.

Fees and how they make money

Goodcity generates revenue through fees applied to its services. The platform levies a 10% commission on the total amount of each real estate acquisition, covering the costs associated with researching, analyzing, visiting and auditing properties.

In addition, for ongoing property management, including accounting, property management and legal services, Goodcity charges a commission of 10% exclusive of VAT on rents received.

Further details are not yet available, pending a first property.

Why not invest elsewhere?

Predicting the future remains a complex task, and past performance is no guarantee of future returns. Over the five-year period from 2017 to 2022, gold returned 8.1%, real estate in France 7.9%, and the logistics sector 18.6%. By comparison, equities returned 5.9%, Paris real estate 4.2%, and SCPI units 3.8%. Life insurance has an average annual yield of just 1.6%, and Livret A savings stagnate at 0.9%, remaining below the inflation rate of 2.1%. Nevertheless, the period ahead is likely to be very different.

What happens when you want to sell your Goodcity property shares?

When choosing a real estate investment platform, one of the key elements to consider is the ease with which you can sell your shares when you wish. In other words, liquidity measures the degree of control you have over your money after the investment. Traditional real estate is generally illiquid, as selling property takes time and can be complex.

For its part, Goodcity advertises flexibility by allowing investors to resell their shares on the platform, although liquidity is still limited by the absence of an open secondary market. So, while commercial real estate offers potential returns, it's important to understand liquidity restrictions before investing.

Holding period

Goodcity is not yet talking about a holding period for the asset, which limits investors' ability to project themselves into such an investment.

Nor do we know when their secondary market platform will be launched, or whether a discount will be applied in the event of early redemption.

The rules of the game are not yet clear, so we'll have to keep an eye on this in the future.

COMPARAISON

Compare Goodcity to other real estate platforms

We'll soon be providing a comparative guide to the different platforms in fractional real estate, and you'll be able to compare Goodcity, Fragments and many others.

THE FINAL VERDICT

Is Goodcity a good investment?

Goodcity will soon offer an accessible solution for investors wishing to enter commercial real estate, an asset class traditionally reserved for more experienced investors or those with large amounts of capital. Thanks to the platform, investing in commercial real estate is simplified, in particular by enabling users to invest from small amounts, thus opening up access to this asset class to a wider audience.

The platform, which has taken over from Blocks.co now Kapi Club, adopts a fractional investment model, making it easier for investors to enter the market.

The fees applied by the platform are fairly transparent, notably with a 10% commission on each real estate acquisition, but it's important to note that other rules of the game, such as the holding period, the frequency of interest payments or the calculation of real estate capital gains in the advertised returns would be welcome. We'll be keeping a close eye on Goodcity's offer to see whether the ambitious returns expected materialize, and whether the optimistic projections for the investments made are borne out over time.