Buying a property is widely regarded as one of the most effective (not to mention safest) forms of investment. However, for some people, it can seem like a pipe dream, especially if they don’t have the initial funds to get started.
Thankfully, there are a variety of different ways to invest in property with a limited initial capital, providing you’re happy to think creatively and approach investment from a slightly different angle. Here are a few suggestions.
Investing in Property with Limited Funds
If you’ve only got a small amount of money to invest into buying a property, then joining forces with a friend or investment partner might be the perfect solution, though we would always recommend engaging a professional adviser to help draw up a contract to avoid disputes in the future. Alternatively, there are certain schemes on offer that let you invest in property as part of a team, with yearly sums of money generated from rent, plus potential ROI from capital growth.
Like, friends and families who enjoy traveling, may invest in timeshare properties. A timeshare, also known as vacation ownership, is a long-term commitment to pay for annual trips to the same resort or group of resorts. A timeshare can provide the benefits of owning a vacation home at a fraction of the cost because you only pay for the time you use and any associated maintenance fees. These characteristics can make a timeshare a good option if you like to enjoy your vacation in the same place every year and have the financial means to pay for the purchase up front. However, because the resale market is crowded, if you decide to sell it later, you may incur a loss because supply is plentiful. Furthermore, the resale market is rife with con artists looking to take advantage of those looking to get out of their timeshare. As a result of such issues, people tend to leave the contract once they realize it isn’t providing them with any benefits. Hence, they frequently seek the assistance of a timeshare exit company (such as Wesley Financial Group) and their lawyers in order to get out of the agreement. So it’s better to look in detail at the pros and cons of any kind of investment.
Start small (and take on the work yourself)
If you’re not afraid of a bit of graft, this could be the option for you. Firstly, you’ll need to identify an upcoming area where properties are still cheap, but look set to rise in the future. Then you can start searching the market for ultra-affordable houses or apartments with excellent resale potential and scope to improve both internally and externally. If you’ve got construction, decorating or DIY skills, you can then take on much of the work yourself, with a view to selling the property on for a profit at a later date. Just make sure that you have the proper tools and equipment to hand so that you are able to complete it efficiently. You can get electrical insulating gloves deals here from unigloves, as well as other websites, in case you need to do any wiring or electrical panel jobs.
Save…the savvy way
It’s amazing just how much you can save per year with a bit of strategic planning. For example, taking a packed lunch to work, rather than purchasing a sandwich each day from the local shop, could save as much as 520 a year, and cancelling gym membership and satellite TV may add over 1,000 to your yearly savings. To avoid spending temptation, set up a separate savings account, and arrange for a portion of your salary to be automatically moved over each month.
Open a property-based business
If you’re a natural entrepreneur at heart, this could be the option for you. Start an online business, sourcing property deals for other investors, or arranging discounts on property-related services, such as construction, plastering or tiling. It’ll take hard work and effort, but could yield significant results. Eventually, you might even be able to emulate the success of someone like Lincoln Frost but, initially, starting small with your property business will enable you to build the skills and contacts that you can then take with you as you grow.
Search for bargain properties
It’s possible to find significantly cheaper properties, if you know where to look. For example, repossessions are often very affordable, and houses sold at auction are usually cheaper – particularly if you’re happy to take on a ‘project’. Be warned, if you purchase a property at auction, you’ll need to pay 10% of the final asking price on the day, so it’s imperative to look for real bargains.
Get creative when raising money
You might even find it easier to raise funds yourself, in a bid to boost your initial investment pot. For example, if you’ve got an existing property, you could rent out one of the rooms to a lodger, which will generate an additional stream of income. Likewise, taking on evening work can help raise funds – though this obviously involves commitment, not to mention a lot of effort.