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Why millennials love property crowdfunding

January 17, 2018

Over recent times, property crowdfunding has become the hottest way of turning savings into profits through shrewd investments – particularly for the millennial generation.

House prices are ever-increasing, salaries are stale and getting into property has never been more difficult, so it’s no surprise Gen Y/Millennials are taking it upon themselves to source new ways to invest its way onto the housing ladder.

In fact, over half (54%) of UOWN’s investors are under the age of 30, which just shows how finance savvy aspiring young investors really are.

We’ve looked at the main reasons why millennials have fallen head over heels for property crowdfunding.

What makes property crowdfunding so lucrative?

Property crowdfunding takes us back-to-basics – owning property to make money, but with a modern twist. Rather than having to lump out huge figures, you can invest a small amount of cash into a crowdfunded property and reap the benefits of returns made on your stake.

This isn’t a virtual experiment. You invest money, you get a stake in a real house with real tenants and, in return, you get a slice of the revenue. And for as little as a £20 investment, it’s a great way to try your hand at investing.

So, why are millennials into it?

You might think that students and graduates would rather spend their money taking a gap year to travel around Thailand, but some millennials are savvy when it comes to their cash. After all, they have the best tool right in front of them to access any sort of investment – the internet. The web is full of a whole host of tools to point millennials in the right direction for crowdfunding opportunities.

With wages staying stagnant and saving money becoming increasingly difficult, investing their money into a property crowdfunding project gives millennials two things:

1.     A place to keep their money (i.e. their investment)

2.     A chance to make some cash from their savings (i.e. the money their investment makes)

Not only that, but you’ve also got that sense of flexibility to take your money out whenever you wish. If you throw your money into a fixed-term ISA, taking it out early will lose you the incentive for putting it in there in the first place.

For millennials, this is an absolute winner. Imagine having the chance to make some real money on a small investment, then being able to take it out if you wanted to go travelling or buy whatever you’ve been saving for. That’s exactly what music student Joe did when he invested to save up for a vintage saxophone. Sticking that extra bit of savings or leftover money into property crowdfunding is the millennial way to make hassle-free cash.

Has the housing crisis caused this boom in millennial property crowdfunding?

This is a big issue for the young folk of today. The current outlook for the property market is, in layman’s terms, looking pretty grim, with fewer and fewer millennials having the funds at their disposal to take the first steps onto the property market.

House prices have been on the rise over recent years (the average cost being a huge £171,870) so recent graduates and young professionals saving find themselves constantly playing catch-up whilst saving for a deposit with securing a mortgage looking more and more unlikely.

Without the ability to physically buy their own home, what’s the next best thing – invest in property and get the potential returns in your back pocket.

Learn about property crowdfunding and how you can make the most of your investment in our Learn Centre.