Investment in Real Estate even with low cash
So you figured that investing in real estate is one of the most profitable ventures you can look into. But alas you’re low on cash. You don’t have that minimum 20 percent down payment which is required by most banks. However, fret not! Don’t let being low on funds act as a barrier to making it big in the real estate investment market. There are in fact quite a few ways to purchase an investment property with a not so big budget. Hence, we at Omaxe, present to you the following ways to increase your real estate portfolio without burning a hole in your own pockets while being able to enjoy the fantastic returns that investment properties have the potential to provide:
Look for emerging destinations
Sometimes, the direct route may not always be the smartest. Instead of investing in the most popular properties straight off the bat, look for destinations that are still a bit low on the radar yet have full potential to be top sites in a few years. Based on the kind of cash that you have at hand and how much you need to borrow from a financial lender, it is a smart move to look for properties on emerging localities. Read and research about multiple localities and look for the ones that have various affordable options along with the stages of development which will aid you in making a guided decision.
The right financial advisor
When it comes to borrowing money from financial institutions or taking a home loan for the property, consulting the right financial advisor can end up saving you big bucks in the long run. He/She can aid you in finding the most appropriate lender for the job. Not only will you get the best home loan deals, you’ll end up maximizing your borrowings to the fullest.
So you’ve figured out the best property to invest in according to your financial capacity and future pursuits but are still stuck up because you don’t really have the down payment. What do you do? What you could do is purchase the property with a friend or a family member who is as interested as you in investing in real estate. At the end of the day, co-ownership could massively increase your chances of not only taking a loan but also increasing your overall buyer credibility. However, it is important to pay heed to the fact that if your co-owner loses his job or undergoes financial crises of some sort, you will be the one who ends up becoming liable to pay the complete loan. Hence, choose your partner carefully and after a lot of consideration.
The right property
Often ignored, finding just the right property to invest in can prove to be your one-way ticket to real estate profitability. Steering clear of projects with a large number of units and instead opting for low rise projects that have less than 50 units of 1 or 2 BHK flats, could prove to be a smarter choice when investing in property. What’s more, is that these apartments often come much cheaper especially in comparison to others and in the future when you’ll be selling, you will have that much less competition. Hence, it is a win-win for all.
Buy properties with “Subject-To”
When you purchase a property that has the “ subject to “ attached to it, you make use of the strategy that involves transferring the legal title of the property to the new investor from the old owner, without paying back the original mortgage which the old owner was subjected to. As long as continued payments are being made, the bank usually doesn’t mind. Though this method is risky, as long as you have a plan B, things are quite acceptable.
Use your Home Equity
Often we ignore what’s right in front of us. Do you already have a home ownership? Are you aware that you can actually put equity in the form of Home Equity Line of Credit-which is usually a variable but has low-interest rate- or a Home Equity Line of Credit-which is usually a fixed interest rate but higher- to use to buy an investment? The money involved in this is quite cheap to borrow in comparison to other methods. What’s more, is that you can also get to deduct the interests on these taxes.
In conclusion, you can make use of various permutation and combinations of the above-mentioned ways to form a plethora of scenarios which will enable you in investing in the real estate sector even with low amounts of cash. Just remember, that in the end yes, buying real estate does cost money. However, it doesn’t always have to be your money. With the correct mix of resources, creativity, and knowledge, investing in real estate becomes just that easy.