Not everyone has a lazy $100,000 or even $50,000 or even $40,000 to go ahead and invest in
property.
Some of us have a little bit of money that we want to use to start to grow our property
portfolio.
How can you invest in property with little money?
Hi I'm Ryan Mclean and I'm from positivecashflowaustralia.com.au, where we teach people like yourself how to
find and invest in positive cash flow properties, and to day I want to talk about how or can
invest in property when you only have a little bit of money.
I got five different tips for you today on how you can invest in property with little
bit of money, and I want you to understand that you don't need to be discouraged if you
don't have a lot of money, property investment is still within your reach.
It may just take a little more effort and a little more time than someone who has $100,000
in the bank already, or who owns $1,000,000 a year like we wish we did.
What are some different ways that we can go ahead and invest with little money?
My tip number one is to look at cheaper properties, if you want to invest in property and you
live in some inner city suburb in Sydney, in Melbourne, in Brisbane then it's going
to be pretty expensive to get into the property market, but you can find properties for much
cheaper if you go outside of capital cities.
You need to do you research on the area that is very important, but rural town centers
can still be great places to invest if you invest at the right time and you choose the
right property.
I call the two hour rule, I recommend going at least two hours from where you live and
you will be able to find property that is much cheaper than the capital city, I use
the example of Sydney because if you go two hours North of Sydney then you can buy a three
bedroom house for under $300,000 on the North of Central Coast.
If you go two hours South of Sydney you can buy a three bedroom house for around $300,000
in Nara and if you go two hours west of Sydney then you are looking at places like Lithgow
and again properties are very cheap.
The two hour rule is great because two hours is I believe is short enough time that you
can drive to that property and drive home in day, it is a lot of driving but it can
be done, I used to live in New Castle and drive to Sydney a lot, I know that it can
be done but I know North of Sydney, two hours North of Sydney you can even get property
for $200,000 or less.
When you are looking at Sydney and you're thinking why can't I afford half a million
dollars for a property, just go outside of your capital city and you will start to see
that properties become very affordable, go even further out you've got country towns
like Moray which have a population about 10,000 people, and there's actually properties in
those areas that are under $100,000, that are not great properties in terms of the quality
and the maintenance of the property but they are often livable properties that you can
rent out as well.
Expand your reach; look further out and by looking at cheaper properties you may find
that you can invest with even just a little bit of money.
Tip number two is two look at getting a guarantor, banks will offer loans up to 100% to some
investors if there's a guarantor on that loan, now with the guarantor loans some lenders
are offering guarantors to just guarantee a portion of the loan rather than the entirety
of the loan.
This can be great because it means if the property goes up in value or if you pay down
some of that then you can get the guarantor off the loan and it just becomes yours in
a short amount of time.
If you want to invest with no deposit then the guarantor can be a good option for you.
Tip Number three is to look at joint ventures, just like a husband and wife will combine
their incomes and combine their deposit to go ahead and invest in property; you can also
do joint ventures with people that you aren't married to.
Obviously I suggest getting a legal advice whenever you are entering into a joint venture
but you could team up with someone else who doesn't have that much money or maybe someone
who is money rich but time poor and you could invest together and split the profits.
That is another way of investing with a little amount of money.
Tip number four is to get experience in other investments, been a successful property investor
requires experience and it requires knowledge, it is the investor who makes an investment
great, and an investor who has no experience and who likes judgment can also take a great
investment and make it a poor investment, by getting experience in investing and understanding
more about investing then you can actually become more successful in property.
I do suggest that you consider looking at other investment options if you don't have
enough money to get into property, you can get into the stock market for as little as
500 to $1000 or you can even look at investing in Micro-Businesses things like websites which
generate passive income and stuff like that, that is for another flow post, if you guys
are more interested in those Micro-Websites and how to make money through them then let
me know and I can talk more about that.
Tip number five is to build a business on the side, this is exactly what I did because
I'm extremely young, I'm only 25, I had my first child at 22 second child at 23, and
I didn't have the time to build out that deposit in order to go and had an investment property
straight away, I did create a post on whether or not you should buy a house or have a baby
first and I obviously chose to have a baby first because I thought that was more important.
What I decided rather than just relying on the employment and what I was getting to my
nine to five jobs, I decided that I'm going to use some of my spare time to build a business
on the side.
What I did was I chose online marketing and I started building websites that would hold
myriad of websites on the side.
This websites grew in time and generated me passive income where I wasn't even working
on them but there were still sending me hundreds or even thousands of dollar a month in passive
income.
As you know if you've been following my story, I actually moved away from full time employment
to working for myself full time in October of 2013, and well I'm not financially free
I do now have the freedom to grow my own business rather than working hard growing someone else's
business.
I believe building a business on your side is not just good because it can increase your
income or increase your passive income but is great at teaching you some of the skills
that you need when it comes to investing in property.
One of the hardest things I found about running a business is understanding the cash flow
analysis, understanding financial statements of profit and loses and understanding my expenses
and managing all of that sort of stuff.
By juggling all this financial balls, you actually become better in managing finances,
when it comes to saving a deposit that becomes easier, and also when it becomes, when it
comes to analyzing property or investing in property you know more about cash flow analysis,
you know more about juggling those financial balls and you are a more astute investor already
even though you haven't bought any investment properties yet.
There you have five tips of how to invest in property with little money or how to improve
your experience, and improve your skills before you go ahead and invest or to get you into
the position to invest.
If you want more videos, podcasts or articles just like this one then head over to positivecashflowaustalia.com.au
or if you are on your phone and you don't want to type in that really long address then
just go to pca.im which is my short link, and that will redirect you to the website.
Until tomorrow when the next episode comes out, stay positive.