How to buy your first property

Investing in property is invaluable, offering long-term rewards and is still regarded as one of the safest permanent investments. Most people would like to diversify their property portfolio but think they won’t be able to afford it or that they will not have the money for a deposit.

 

Here are few creative ways to approach your real estate investments:

  • Rent out your extra room: If you buy a 2 bedroom unit, you can raise money by renting out the extra room. The profits can be very high and it could help you breach the initial gap between rental vs bond payments.

 

  • Primary Residence: See the initial additional funding as a ‘savings account’. After a short time you will see the gap between rental and bond repayments getting less & less.

 

  • Renting out, saving up: If you need a bigger home than you can afford, or if you don’t know where you wish to sprout your roots, then buy an investment property & let it out – this way you can save up for a few years, to sell the property for a profit in order to get a bulky deposit to put down on your dream home, wherever it may be.

 

  • Invest with friends: If your friends or business partners also have a passion for property, you could always invest together. Plan what will happen if someone wants to sell and the other doesn’t – or one person needs their money back unexpectedly, and get it all down in writing.

 

  • Borrow money for a deposit from a relative: If you are fortunate to have a relative with some extra funding and you really know your stuff and can produce a compelling business case, it might be worth a shot, asking them for funding towards/for a deposit to purchase the property. Remember if your deposit is higher, your monthly installments are less, so it is always best to aim for a higher deposit.

 

  • Partnerships: a typical way of obtaining financing. It is the way many young real estate entrepreneurs go about financing their projects. By finding investors who can put the money up and split the profits on the upside. This also limits your risk and makes the money go further.

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