Crowdfunding Millennials And Women Are Seeing Big Returns
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Young professionals and women are jumping into CapitalRise’s new crowdfunding platform and seeing real—and unexpected—returns. Although property investment is usually the preserve of high-net-worth individuals and financial institutions, Millennials as young as 20 are investing £1k or more into properties around the most elite neighbourhoods of London and getting a 10% return.
CapitalRise raised £1M for each of its first two offerings on property developments in Eaton Square, Belgravia, and Grosvenor Square, Mayfair. Now it's turning its sights on the prestigious 42k SF scheme in Knightsbridge, one of London’s most sought-after areas, a few hundred yards from Harrods. It is forecast to sell for £106M in 2018.
The five 6k SF contemporary interpretation of Georgian-style townhouses include basement gyms, a car lift to a subterranean car park and a 24-hour concierge service.
“Intrinsically everyone understands residential property so this investment type is very popular even to younger investors who may be making their first investment,” CapitalRise CEO Uma Rajah says. "People are attracted by the high level of returns and the prime locations of our investments (such as Mayfair and Knightsbridge) and we present everything in an easy to understand and transparent manner which doesn’t intimidate."
With the first interest payment worth £20k already paid to investors, CapitalRise is confident it has found a way for everyday savers to invest in luxurious properties that would otherwise have been inaccessible to them.
Uma says that Millennials particularly seem to love the product because they are comfortable with banking online and sending money to friends via text, and investing this way is as simple as ordering a book from Amazon.
And, unusual for this type of investment, almost half of CapitalRise's investors are women. Uma says women have become more empowered and financially independent, and are taking a much more proactive approach to managing their finances.
Belle Holden, 23, is an interior designer from South London who invested £2,500 in CapitalRise's first investment in Eaton Square Belgravia to start saving for a deposit on a house.
“I invested in CapitalRise because my money was earning nothing in the bank and I decided to take a more active role in saving for my future, especially for a deposit for a house. Everybody wants to get on the property ladder—the earlier the better—but when you earn around £30k/year like me, it’s virtually impossible in London. You watch as properties rise in value and feel you are missing out. At least with this investment I am a getting a return higher than inflation and I feel I am benefiting from the housing market,” Belle says.
"CapitalRise is the only website I have come across where I can invest in this kind of property [the firm's assets are worth more than £130M] without being a millionaire. I really do think it’s a great way to start a pot and is encouraging to get on the property ladder in London as early as possible.”