- Almost 40 percent have experience in or are open to investments of 50,000 or 200,000 euros via online platforms - co-investment of the product provider is decisive
Digital platforms and real estate investments have caught on with wealthy private investors. Almost 40 percent of investors can imagine investing 50,000 euros or even 200,000 euros via an online platform or have already done so. Another 28 percent of those surveyed would first invest smaller amounts via an online platform. Only around 32 percent value personal advisory meetings and do not want to invest purely digitally. At the same time, the asset class of real estate is proving enormously popular: 94 percent of wealthy Germans have their own experience with real estate investments. These are the results of a representative survey conducted by the opinion research institute YouGov on behalf of Linus Digital Finance. 253 people with financial assets of at least 500,000 euros were surveyed.
"The results show that wealthy private individuals are extremely interested in real estate investments - and are also happy to invest larger sums of money digitally. Digital platforms have established themselves and are likely to gain further importance. This offers ideal conditions for the scaling of corresponding offers and sustainable growth," says David Neuhoff, founder and CEO of Linus Digital Finance.
It is advantageous if the initiator of an investment product co-invests and thus ensures concurrent interests. Thus, 26 percent of the respondents stated that this was a necessary condition and almost 39 percent considered it important. Only about 13 percent considered it unimportant.
Wealthy investors expect attractive returns on their real estate investments. As many as 13 percent of those surveyed expect an annual running net return of more than eight percent. 34 percent are satisfied with five to eight percent and 44 percent with three to five percent. But only seven percent are content with a net return of two to three percent and only two percent expect a return of less than two percent.
The stability of value of the investment, the regular income and the amount of income are particularly important for real estate investors. Almost 56 percent stated that the stability of the investment was most important to them, 43 percent emphasised the stability of the income and 42 percent focused on the amount of income. With a share of just under 14 percent, the sustainability of a real estate investment still plays a subordinate role among wealthy private investors. However, there is a discernible difference between the generations. Younger investors up to 30 years of age placed significantly more value on sustainability (28 percent) than older investors over 70 years of age, where the value was only seven percent.
Wealthy investors are extensively invested in real estate and have a high level of experience. They have invested broadly in various vehicles or in owner-occupied property. Around 74 percent have invested in owner-occupied property and around 38 percent in real estate financing. "Investments specifically in real estate financing have become established among wealthy investors," says Neuhoff. 38 percent have invested in shares of real estate companies or corresponding equity funds and 37 percent in closed-end or open-end real estate funds. In contrast, only around eight percent rely on crowd investments. After all, 33 percent have invested directly in real estate for rent.
However, wealthy investors complain about a number of hurdles in their investments. One important hurdle is access to attractive properties. As a result, the real estate market presents itself as non-transparent for investors. 37 percent of the respondents are of this opinion. In addition, the high costs of acquiring real estate are viewed critically, and for around 27 percent, the illiquidity of real estate compared to liquid securities is a disadvantage. As many as 21 percent criticise complicated sales channels and investment processes.
"Digital platforms are also so popular because the investment is implemented in an uncomplicated manner and the duration of the investment is limited in time. Our investors usually invest in loans with terms of between 6 and 48 months," says Neuhoff.
The data used is based on an online survey by YouGov Deutschland GmbH in which 253 people participated between 23 and 29 April 2021 with financial assets of at least 500,000 euros. Almost 60 percent of the respondents have financial assets between 500,001 and one million euros, the other 40 percent more than one million.
Via the digital platform www.linus-finance.com, experienced investors participate directly in high-yield real estate projects.
About LINUS Digital Finance:
Linus Digital Finance AG finances real estate projects with debt and mezzanine capital via a private debt fund it manages and enables semi-professional, professional and institutional investors to participate in these investments via a digital platform. The term of the loans is usually between six and 48 months.
A subsidiary of Linus Digital Finance AG is supervised by BaFin as a capital management company (KVG). Together with co-investors, the funds and investment companies managed by Linus Digital Finance AG have invested more than €630 million in real estate projects since the company was founded in 2016, including around €450 million from co-investors, thus financing a total project volume of almost €2 billion. Around €38 million in interest has been distributed to Linus Digital Finance AG investors to date (as of July 2021).
Linus Digital Finance AG is listed on the regulated market (General Standard) of the Frankfurt Stock Exchange. Linus Capital Ltd. is the UK subsidiary of Linus Digital Finance AG and an Appointed Representative of Infinity Asset Management LLP, which is authorised and regulated by the Financial Conduct Authority (FCA).