HOW TO GET INTO THE PROPERTY BUSINESS WITH NO MONEY
Jess Chambers
December 15th, 2020
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Start your property portfolio today!
Starting a property business and investing in property for financial freedom is an appealing option to many, but one of the main stumbling blocks that people have is the capital required to get your dreams off the ground.
Property investment is obviously far easier if you have a massive amount of capital, but it’s not impossible if you don’t have any. In this article, we’ll look into several ways you can get into property investment with no money (or very little).
Getting into property investment is an aspiration for many, and there are so many reasons why property is such a great investment and you should get into it. One of the main appealing perspectives is that you can be your own boss, choosing to be a hands-on or hands-off investor, depending on time constraints.
Becoming your own boss allows you to decide your level of involvement and flexibility within your income. While, diversifying your portfolio via property adds a tangible asset, which reduces your reliance on stocks or ponds and lowering your overall risk.
The other large appeal is obviously the income, you’ll receive a monthly payment in the form of rent from the tenant and as well as property often increasing in value over time.
Property investment is a popular path to financial security and freedom for many. Most property investments allow investors access to dual income streams:
- Rental income: You receive regular income from tenants each month, providing a steady cash flow.
- Capital appreciation: Property values often increase over time, offering the potential for significant profit when you sell the property investment.
Well, yes, or this would be a very short article! You might be surprised to find that there are quite a few ways in which you can get into property investment having little to no initial capital to invest.
Property investing used to mean that you had to put down a hefty upfront payment in order to purchase a property, but now with a diversified market, there are many alternative routes to get started.
How do you use Joint ventures to get into property investment?
This is a temporary but formal partnership with either a builder, finance house or developer working together, with one partner generally contributing the funds and the other partner dedicating their time or skills.
The only thing about this is you often need to have something to bring to the table if you don’t have the capital, such as a trade like being a builder, having construction experience or being an architect.
How do you use Lease options to get into property investment?
What exactly is a lease option when it comes to property investing? It’s a legal agreement that allows you to control the property, generate income, but not have the obligation to buy it.
Essentially what this often looks like is you agree on a monthly fee to the property owner in return for complete management of the property, meaning that you can rent it out to tenants for a profit. As part of the agreement, if you want to, you can agree to buy the property at a set price later on.
There are several benefits to a lease option, for the one you invest very little cash to get started, you don’t need a mortgage and you make money every month. The great part of the “option” is that you can benefit from any increases in the value of the property, if you’ve agreed a lower price, or if it hasn’t and has dropped in price, you can just hand it back.
It’s beneficial for the person or company on the other side too, it means they get a consistent monthly figure with less of a risk than getting tenants, they can also be completely hands-off or alternatively, it could mean that the person is in negative equity, meaning they owe more on their mortgage than they could sell their house for, but need to move and therefore have little option to rent it out but without the resources or time to find tenants.
Getting into property investment but don’t know where to start? Get in contact with us today to find the best opportunities out there!
While our property sourcing service doesn’t currently offer Buy-To-Let mortgages, they are a viable option for many property investors. These mortgages are specifically designed for purchasing rental properties and offer advantages like lower interest rates compared to standard mortgages.
Buy To Let mortgages have lower interest rates and are specifically designed for rental properties. But, they have stricter eligibility and longer approval times.
How do you use Bridging Finance to get into property investment?
Bridging loans can be a great solution if you’re looking to buy a property & flip it quickly. Bridging loans are essentially short-term loans which last typically between 12-18 months. As an investor, you can use this to purchase a property, refurbish it and sell it on, or secure alternative finance for a buy-to-let.
How do you use Crowdfunding to get into property investment?
Referred to as property crowdfunding, this is where a bunch of investors pool their money & everybody owns a small share of a property, it’s quite like peer to peer lending but the only difference is that you actually get a share of the equity.
So you can’t do this with no money, but in comparison to forking out for a BTL mortgage deposit, you can get started with very little. It often starts with investment at increments of £500, but you can invest what you choose and own a percentage share of the property investment.
Once you choose a property investment for that money and start receiving rent, you receive the proportion of your share. There are several companies that offer this kind of service, whilst also handling everything for you, it’s a great way to get started in property.
How do you use Personal loans to get into property investment?
Another option is to just get a personal loan. We would only really recommend this if you are going to buy a property of a low value, but this way you won’t require a deposit to buy a property.
Take for instance if you look at a personal loan amount of £35,000 spread over 10 years as an example at 3.7% APR you would be repaying roughly £348.38 a month.
Using these calculations, that would mean you require a yield of 11.94%, which is relatively high, so for the first 10 years you might have to contribute a small amount to the loan to pay it off, but after which, the income generated from the property would be profit.
How do you use Vendor Finance to get into property investment?
Vendor finance is when the seller of the property, essentially, helps you buy it by lending you the deposit money. This is often the scenario when someone wants to sell their property, they have equity in it, but don’t want to go through the process of selling, whether that being with no mortgage at all or with a mortgage.
They transfer this over to you, which is a useful strategy when the seller wants to sell, but not at a discount and they don’t necessarily need the money at that moment.
They agree to sell you the property, transferring it over to your name and in return, you pay a monthly interest fee. They also get a first charge on the property which means they can take the property back if you default on a payment.
The reason this is beneficial to the seller is that they would get far more on the monthly interest payments than they would from the bank, and as part of the agreement, you also agree to buy the property within a certain timeframe.
Getting into property investment with savings can be a powerful springboard in the UK. Because you have the funds readily available, you are counted as a cash buyer and are favoured across the property investment market.
A larger down payment paid from savings increases your buying power and makes you a more attractive buyer to sellers, potentially leading to better deals.
How do you use Pension Pots to get into property investment?
This isn’t available to everyone, granted, but if you are over 55 you can access your pension without needing to buy an annuity and you can access the first 25% of it tax-free. Several people are doing this, and turning to property investment to secure consistent returns from the buy to let market.
How do you use Retained Profits to get into property investment?
This is only applicable if you operate a trading company. Essentially you are able to borrow some money from your business and actually use the funds, there are benefits when it comes to this in regards to tax, but this is one that you’ll need to speak to your accountant about in order to maximise the benefits.
Jess Chambers
December 15th, 2020
Share this post
Start your property portfolio today!
Starting a property business and investing in property for financial freedom is an appealing option to many, but one of the main stumbling blocks that people have is the capital required to get your dreams off the ground.
Property investment is obviously far easier if you have a massive amount of capital, but it’s not impossible if you don’t have any. In this article, we’ll look into several ways you can get into property investment with no money (or very little).
Getting into property investment is an aspiration for many, and there are so many reasons why property is such a great investment and you should get into it. One of the main appealing perspectives is that you can be your own boss, choosing to be a hands-on or hands-off investor, depending on time constraints.
Becoming your own boss allows you to decide your level of involvement and flexibility within your income. While, diversifying your portfolio via property adds a tangible asset, which reduces your reliance on stocks or ponds and lowering your overall risk.
The other large appeal is obviously the income, you’ll receive a monthly payment in the form of rent from the tenant and as well as property often increasing in value over time.
Property investment is a popular path to financial security and freedom for many. Most property investments allow investors access to dual income streams:
- Rental income: You receive regular income from tenants each month, providing a steady cash flow.
- Capital appreciation: Property values often increase over time, offering the potential for significant profit when you sell the property investment.
Well, yes, or this would be a very short article! You might be surprised to find that there are quite a few ways in which you can get into property investment having little to no initial capital to invest.
Property investing used to mean that you had to put down a hefty upfront payment in order to purchase a property, but now with a diversified market, there are many alternative routes to get started.
How do you use Joint ventures to get into property investment?
This is a temporary but formal partnership with either a builder, finance house or developer working together, with one partner generally contributing the funds and the other partner dedicating their time or skills.
The only thing about this is you often need to have something to bring to the table if you don’t have the capital, such as a trade like being a builder, having construction experience or being an architect.
How do you use Lease options to get into property investment?
What exactly is a lease option when it comes to property investing? It’s a legal agreement that allows you to control the property, generate income, but not have the obligation to buy it.
Essentially what this often looks like is you agree on a monthly fee to the property owner in return for complete management of the property, meaning that you can rent it out to tenants for a profit. As part of the agreement, if you want to, you can agree to buy the property at a set price later on.
There are several benefits to a lease option, for the one you invest very little cash to get started, you don’t need a mortgage and you make money every month. The great part of the “option” is that you can benefit from any increases in the value of the property, if you’ve agreed a lower price, or if it hasn’t and has dropped in price, you can just hand it back.
It’s beneficial for the person or company on the other side too, it means they get a consistent monthly figure with less of a risk than getting tenants, they can also be completely hands-off or alternatively, it could mean that the person is in negative equity, meaning they owe more on their mortgage than they could sell their house for, but need to move and therefore have little option to rent it out but without the resources or time to find tenants.
Getting into property investment but don’t know where to start? Get in contact with us today to find the best opportunities out there!
While our property sourcing service doesn’t currently offer Buy-To-Let mortgages, they are a viable option for many property investors. These mortgages are specifically designed for purchasing rental properties and offer advantages like lower interest rates compared to standard mortgages.
Buy To Let mortgages have lower interest rates and are specifically designed for rental properties. But, they have stricter eligibility and longer approval times.
How do you use Bridging Finance to get into property investment?
Bridging loans can be a great solution if you’re looking to buy a property & flip it quickly. Bridging loans are essentially short-term loans which last typically between 12-18 months. As an investor, you can use this to purchase a property, refurbish it and sell it on, or secure alternative finance for a buy-to-let.
How do you use Crowdfunding to get into property investment?
Referred to as property crowdfunding, this is where a bunch of investors pool their money & everybody owns a small share of a property, it’s quite like peer to peer lending but the only difference is that you actually get a share of the equity.
So you can’t do this with no money, but in comparison to forking out for a BTL mortgage deposit, you can get started with very little. It often starts with investment at increments of £500, but you can invest what you choose and own a percentage share of the property investment.
Once you choose a property investment for that money and start receiving rent, you receive the proportion of your share. There are several companies that offer this kind of service, whilst also handling everything for you, it’s a great way to get started in property.
How do you use Personal loans to get into property investment?
Another option is to just get a personal loan. We would only really recommend this if you are going to buy a property of a low value, but this way you won’t require a deposit to buy a property.
Take for instance if you look at a personal loan amount of £35,000 spread over 10 years as an example at 3.7% APR you would be repaying roughly £348.38 a month.
Using these calculations, that would mean you require a yield of 11.94%, which is relatively high, so for the first 10 years you might have to contribute a small amount to the loan to pay it off, but after which, the income generated from the property would be profit.
How do you use Vendor Finance to get into property investment?
Vendor finance is when the seller of the property, essentially, helps you buy it by lending you the deposit money. This is often the scenario when someone wants to sell their property, they have equity in it, but don’t want to go through the process of selling, whether that being with no mortgage at all or with a mortgage.
They transfer this over to you, which is a useful strategy when the seller wants to sell, but not at a discount and they don’t necessarily need the money at that moment.
They agree to sell you the property, transferring it over to your name and in return, you pay a monthly interest fee. They also get a first charge on the property which means they can take the property back if you default on a payment.
The reason this is beneficial to the seller is that they would get far more on the monthly interest payments than they would from the bank, and as part of the agreement, you also agree to buy the property within a certain timeframe.
Getting into property investment with savings can be a powerful springboard in the UK. Because you have the funds readily available, you are counted as a cash buyer and are favoured across the property investment market.
A larger down payment paid from savings increases your buying power and makes you a more attractive buyer to sellers, potentially leading to better deals.
How do you use Pension Pots to get into property investment?
This isn’t available to everyone, granted, but if you are over 55 you can access your pension without needing to buy an annuity and you can access the first 25% of it tax-free. Several people are doing this, and turning to property investment to secure consistent returns from the buy to let market.
How do you use Retained Profits to get into property investment?
This is only applicable if you operate a trading company. Essentially you are able to borrow some money from your business and actually use the funds, there are benefits when it comes to this in regards to tax, but this is one that you’ll need to speak to your accountant about in order to maximise the benefits.
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When the foundations of your company are built upon industry knowledge and experience, you can’t help but be a self-confident company.
Here at The Property Sourcing Company, we are led by a roster of industry experts who have over 50 years of combined experience in doing BMV property deals, as well as packaging them up for investors.
Quality sits at the heart of our team, who go the extra mile to tailor our service to you. We pride ourselves in our ability to source you a wide variety of high-yield property investments.
Get in touch and we’ll establish what type of property you’re searching for, before talking you through our current investment opportunities. We’ll also keep you posted as we acquire new deals.
When you buy your investment property through us and we’ll take care of solicitors, surveys – everything – all to ensure you have a stress-free property purchase. It’s just one of the ways we make investment work for you.
Why invest with us?
Simply put, we’ll get you the best possible deal. Our sister company, The Property Buying Company, have been in the property buying industry for years & we have access to all their stock which is at a price point that is ready for investors to buy and make a great return on.
No middlemen, no stress & no hassle. We make investing in property and growing your portfolio as easy as it possibly can be.
