5 reasons why it pays to invest in projects with longer maturities on Investown

(This article is NOT investment advice)

If you are already using Investown, you have probably noticed a different length of projects in which finances can be evaluated. While some are “fast” and you will get the invested principal back within a year, others have a longer maturity and the partner (project owner) must money back in 24, 48 or more months.

That you have avoided these opportunities so far? As you will find in the following lines, it makes sense to include them in your portfolio, especially if you plan to invest for the long term.

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1. You fix high interest for a long time ahead

As you learned in a recent article about timely Fixing high interest rates, the Czech National Bank (CNB) began cutting interest rates at the end of last year and continues to do so this year. As early as spring, interest on savings accounts or term deposits, where Czechs currently have billions of crowns deposited, will fall. Their savings on savers will not yield as much as in years past.

Investing in long-term projects on Investown is the way to go ensure high interest for years ahead, regardless of how the CNB will continue to operate with the base interest rate. To illustrate, let's show a short example in the blue box below.

If today, investor Karel na Investown were to invest money in a real estate loan with a maturity of 48 months and a fixed yield of 10% p.a., the investment will pay him 10% interest every year for 4 years. However, if he instead chose an opportunity with a maturity of 12 months, the project would end after a year, and it is likely that Karel would then find it difficult to look for another opportunity with such a high appreciation in the low interest rate environment.

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2. Diversification between short-term and long-term projects

Of course, this does not mean that it is necessary to invest only in projects with a maturity of several years.

Because it is possible to value money on Investown in an unlimited number of opportunities, investors can include projects from different partners in the portfolio and at the same time Diversify based on project length. They put part of their finances into short-term real estate loans, part into long-term ones.

An ordinary investor will appreciate such diversification, for example, if he knows in advance that he will want to use a certain amount in a year, for example, for other purposes (a more expensive vacation, buying a car, etc.). Once the short-term project ends, he will get the principal back from it, but other (long-term) projects will continue to pay him with high interest.

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3. The longer the maturity, the more you earn in interest

The third advantage of longer projects on Investown is simple: if the investor invests in a real estate loan with a maturity of, for example, 48 months, interest will go to his Investown wallet every month for 4 years, and so he earns more on interest than in the case of a short-term investment.

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4. You can forget about long-term investment

Investors with a long investment horizon want to have as little worry as possible with their money and do not like to solve every six months where to send free cash from the returned principal.

Thus, projects with maturities of 24 months or more are perfect for them. With hyperbole, they can forget about their investment, enjoy a fixed return and deal with the further investment of the principal only in a few years.

Do you know that the average maturity of a project on Investown is 31 months? The average duration of a development project in the Czech Republic is 8 years, while construction takes more time.

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5. Also sell an investment with a longer maturity at any time

Sometimes an investor unexpectedly needs their finances back before the project is due. However, there is no need to worry about long-term real estate loans, because you can invest on Investown. easily sell to other investors through so called. Marketplace.

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Invest in real estate backed loans today

At Investown there are currently several projects open for investment with shorter and longer maturities, you just have to choose. You can start today.

Wondering how exactly Investown works? Full details, including frequently asked questions, you can find here.

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This article is not investment advice

Investown does not provide investment advice. This is an educational article with basic information about the possibilities of investing on our platform. For specific advice, we recommend using the services of an investment advisor.