May 16, 2019
Not all of us have a big stash to invest in property. Actually, there are a lot of people who have just a little bit of money, but that doesn’t mean you can’t start to grow your property portfolio.
If you don’t have a lot of money there’s no need to be discouraged. This just means that you’ll have to invest a little more time and a little more effort than the guys who have cash in the bank ready. So let’s see how property investment is still in your reach even with little money.
Be Serious About Saving up
Maybe you think it’s not the best advice out there, but the truth is that many people simply save up until they’ve got the money. This may be quite a radical approach and not much fun, but it’s also predictable, straightforward, and it’s completely within your control. The trick lies precisely in that control - many people think they’re saving up, but how many of them are really serious about how much they spend? You need to be fully aware of where your money goes if you wish to find ways to reduce your expenses. There are various apps that can help you manage your finances out there, so there should be no excuses. Every buck you don’t spend is a buck you can invest.
Of course, tracking is one thing, and reducing expenses involves concrete action. You could start saving on rent - simply move to a smaller place or into a cheaper area. You could probably cancel some things - do you need both, cable and Netflix? Your gym membership could pile up to a pretty sum over the year, so start exercising at home or outdoors. Transfer a larger portion of your wage to a savings account - you can’t spend more money if it isn’t there. Think if you can earn more - maybe you could freelance your day job in the evenings, or you can start selling your hobby arts and crafts products on Etsy. It’s all about motivation - if you’re serious about property investment you should be ready to be uncomfortable for a while to make it real.
Bring a Third Party to Your Loan
If it still proves too difficult for you to save up for a deposit, you can try to go with a guarantor loan. Banks are usually ready to offer loans even up to 100% to investors if a guarantor is involved. Of course, this third party needs to be a close family member, which means that another family property will be used as additional security for your home loan. Primary security is still the new property, but the loan will also be over the guarantor's property, so think carefully before you take this leap. It would be best to find lenders which enable guarantors to guarantee only a portion of the loan because you can get your family member off the loan if you pay down some of the debt, or if the property goes up in value.
This time it doesn’t have to be with your family members. There are husbands and wives who combine their incomes in order to invest in property, but you don’t have to be married in order to enter in this kind of joint venture with other people. All you need to do is to find someone who also doesn’t have much money but wishes to invest in property. But that isn’t the only way - at the beginning, we’ve said that investments could also come in the form of time or effort, so your partner could have more money, but less time. The equation is simple - you invest together and split the profits. Just be careful who you team up with and it’s recommendable to seek legal advice before entering into a joint venture.
Look For Cheaper Properties
Getting into the property market is more expensive if you live in capital cities, so another way to a cheaper investment is to go outside of them. Your first step should be to research the area - even the rural town centers could be great places to invest if you choose the right property and do it at the right time. You could start by driving at least two hours from the capital city to find the property that is much cheaper - it’s short enough drive to the property and back which can be accomplished in a day. It is a lot of driving, but it could definitely pay off when you start to see properties becoming more affordable.
As you’ve surely noticed, the saving up part is the longest, and for a reason. One way doesn’t exclude the others in this list. You can start saving up, talking with your family members, looking for a partner or cheaper properties at the same time. When you don’t have a lot of money, it’s good to have a lot of options.