There has been a significant increase in the number of millennials investing in property crowdfunding, new research by Shojin Property Partners has revealed.
The company has seen a 20% rise in millennials aged 18-30 investing in property crowdfunding projects since launching the platform last year.
Millennials now account for almost a fifth of all the people who invest in property this way through the firm, but the largest group of crowdfunding property investors are aged 30-39 which represent 44% of investors.
Shojin Property Partners say that crowdfunding appeals to millennials because it allows them to invest in property for a relatively low amount, without the need for large savings, or deposits.
Jatin Ondhia, CEO of Shojin Property Partners, commented: “With interest rates so low, millennials are losing money keeping it in a bank due to the rate of inflation. This, combined with out-of-reach property prices, is driving an increase in 18-30 year olds investing in property crowdfunding.”
Shojin Property Partners has developed a variety of crowdfunding projects, allowing investors to make a minimum investment of £500, without the tax and legislative burdens.
“Our new buy-to-let crowdfunding product enables landlords and investors to come together and buy into a small portfolio of residential property for rental purposes, sharing the income and capital growth,” Ondhia added. “This standard buy-to-let product offers investors income, plus a share of any profits when the property is sold, for a blended return of 5% to 10%, over five years.”
He continued: “Our further two buy-to-let products are a mix of debt and equity finance and will typically offer lower returns than the core development equity product, but with a lower risk. Our capital growth equity product, offers only capital growth but no regular income, with target returns of 9% to 12% per year over five years.
“Our third buy-to-let product is an income-only, mezzanine product, secured by a second charge against the property. Investors will receive a fixed quarterly income, but none of any future capital growth on the property, with target returns of 4% - 6% per year.”