Is Crowdfunding the Latest Craze for Millennial Property Investors?

New research from Shojin Property Partners, the property investment and development company, is showing that increasing numbers of millennials are investing in property crowdfunding to get a foot on the property ladder.

Since launching the platform last year, the company has seen a 20% increase in millennials aged 18-30 investing in property crowdfunding projects. Millennials now account for almost a fifth of all those who choose to invest in property through the firm in this way.

Their data shows that the largest group of crowdfunding property investors are aged between 30 and 39 years (44%), followed by those who are aged 40 to 49 (23%). A decline begins to show in the number of crowdfunding investors after the age of 49.

Crowdfunding in general has proven to be a popular choice for investments amongst millennials. Sites such as Kickstarter and GoFundMe encourage the backing of a variety of projects, from providing financial support for someone’s pet operation, to helping to fund the start of a new business. It allows the average person to become involved in someone else’s potential success, or simply earn some good karma by helping out those in need.

In this case, millennials are able to invest in property for a relatively low amount, without the need for a large deposit. Unlike in previous generations, many young people don’t want to tie themselves down to major life commitments such asa mortgage so early in their lives.

Jatin Ondhia, CEO of Shojin Property Partners, has 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.

“This age group will increasingly embrace crowdfunding, as they are early adopters of new and emerging technologies and are keen to try innovative ways to invest.  Being able to invest smaller sums of money is also very attractive to millennials, enabling them to dip in and out of property. They have potentially large investing power and crowdfunding offers them an opportunity to spread risk.

“We have developed a variety of crowdfunding projects, allowing investors to make a minimum investment of £5,000. These projects provide a hands-free investment, 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.”