No cash or equity? You still have options to buy property!

In an ideal world, we would all have an endless supply of cash on hand ready to build up our property portfolio…but for many of us, that isn’t reality. Our clients are often shocked when we explain to them all their investment options, despite the fact they don’t have money in the bank for a deposit.

Last week we spoke about how people can use their home equity to purchase an investment, but if you can’t unlock equity right now and you don’t have cash, there are still alternatives if you’re looking to buy off-the-plan investment properties.

DEPOSIT BONDS

Put simply, deposit bonds ‘guarantee’ you for your deposit amount right up until settlement, meaning the deposit bond provider tells the bank you are good for the money. While you will need to demonstrate to the deposit bond provider that you have equity and can service for a loan, you do not have to organise the funding right away. Using a deposit bond gives you time to work on your finances and unlock equity at the time of settlement, not at the deposit stage.

All you will need to pay is a one-off fee before your deposit bond is released. You won’t have to pay the full deposit amount to your deposit bond provider (unless there is a claim) and they don’t charge interest.

Each case is assessed individually, and it is important to check if your real estate or vendor will accept a deposit bond over a cash bond.

Have more questions? Click here to read our blog on the top 10 questions on deposit bonds. https://investorproperty.com.au/insights/news/deposit-bonds-10questions/

PAY OFF YOUR DEPOSIT IN INSTALLMENTS

Just imagine what opportunities would be available to you if you only had to put down $10,000 cash and could pay the remainder of a deposit off over weekly payments with no interest or fees?

There is a provider who is offering just that with their deposit solution designed for use with development projects, allowing people to ‘pay off’ their deposit during the construction period. The payments are calculated to be finished prior to completion to allow plenty of time to secure finance.

For many people, servicing a loan isn’t the issue, it is actually saving up for a cash deposit. Especially for first home buyers, trying to pull together 10 or 20 percent in this rising market is becoming increasingly more difficult.

This new deposit option has been tested and endorsed by developers and home buyers, and accepted by lenders in parts of Australia and our team will be the first to bring it to Queensland very soon. If you’re interested in exploring this deposit option to enable you to purchase sooner in this growing market, get in touch with our team to be the first to hear when this option becomes available here.

It is important to remember everyone’s individual circumstances are different and all services come down to selection criteria and may not be suitable for some. Contact us today to organise a free consultation so we can discuss different ways on how you can invest, even in this unique property market. You might be surprised at just how many options are available to you and what your retirement trajectory looks like if you set yourself up correctly when it comes to property wealth.