Jan 08, 2020
4 Ways to Invest in Real Estate With No Money
Have you always wondered what it would be like to own a property portfolio? Investing in real estate can be a smart and effective way of making money that could change your way of living. However, that becomes a little difficult when you have no money to start off with. Here are some tips to invest in real estate when you don’t have the money.
Take Out A Mortgage
When you don’t have the available cash at your disposal, that doesn’t mean you can’t get it elsewhere. Mortgages are a great way to start you off on the property ladder, especially if you’re earning enough in your job to warrant a sizeable amount. The more you have, the better opportunity you have to buy a home that’s either really nice or you have the extra money that you can use for doing up the property and then selling it on. It’s handy that this exists because without it, a lot of people interested in investing in real estate would struggle to do so. Make sure that when it comes to a mortgage, you’re taking it out an amount that isn’t too much to pay back and that if you’re planning on renting the property out, make sure the cost of rent reflects how much of the mortgage you need to pay off.
You also want to think about the reason for the mortgage and whether you’re going to rent or do a quick fix on the home and then sell it on. Either one will have additional costs that you’ll need to consider too.
Invest With A Partner
Two heads are better than one, and two bank balances are better than one too. Investing in real estate is usually something that is done as a partnership, especially if you want to take out a bigger mortgage or you’re trying to do the buying without one. You may have a certain amount available to work with, but it might not be enough to invest. When you have an investment partner, they can put an equal amount in so that you’re 50/50, or you could arrange it so that your partner puts in more and therefore owns more than half of each investment. Remember though, as you make money, you might want equal out that ratio of who owns what. This option is one that might better your chances in general when it comes to investment. Having someone to soundboard off on and to spot or highlight any errors of judgment are important because it’s something you wouldn’t have on your own.
Invest Via P2P Platforms
P2P platforms, which link lenders to borrowers through the online world, is one way to invest in the property market without having to come into physical contact with the property itself. For those who want to participate in the real estate but don’t have the money or don’t want to invest too much because of the risk, investing on platforms such as EstateGuru is a good idea. It gives you the ability to invest small amounts of money into these property-based investments and then once the property is built or funded, any profits it’ll make, you’ll see a regular return. Not having to invest a substantial amount of money, means you can invest small amounts and into different properties so that you can hopefully get a good return on all of them. When using these types of platforms, make sure you do your research and that you’ve thought about what the risks are when it comes to investing as each one might be different from the next.
The name definitely hints to the type of loan this is. These microloans are usually aimed at smaller businesses or startups where any small amount is appreciated and goes towards their development and growth. These loans are much smaller than traditional ones which mean that it opens up the market to those investors who might not have a huge amount of money to start off with. They also have less strict requirements which make it more of an opportunity for you to take advantage of.
Investing in real estate with no money doesn’t mean that you aren’t able to do so. If you have the right knowledge and know what will work for you, there are plenty of options out there. Look at the choices above and try your hand at any one of them to see what works and what doesn’t.