Investing without paying a deposit – whether it’s property or any other type of investment – seems far-fetched. Surely you need a hefty bank balance to start building your property portfolio right? Not quite.
100% home loan
A 100% home loan covers the full purchase price of your property but there are certain criteria you need to meet before you apply for this option:
Clean credit history
Your credit score will work in your favour when applying for any home loan, include the full home loan payment. What is the ideal score? Anything over 740 will get you through the door. If it’s below this, don’t fret. There are ways to improve your number, it will just take up to three months. Pay all accounts on due dates and avoid using short-term loans (like payday loans).
Besides a good credit score, you need proof of affordability. The banks have access to your banking statements which allows them to have a look at your income, expenses, and credit balance once all expenses have been paid.
Investing in relationships is important and the same goes with your bank. Why? Banks have rules and policies and by providing you with this loan option also puts them at risk. If your bank’s mission is entrepreneurship-focused, this may work in your favour.
What you also need to take a look at is the products you currently have with the bank. This includes investment policies, savings accounts, etc. It’s a sign of a good banking relationship and assures that you are trustworthy.
Are you serious about investment property?
Banks need to know that you’re committed with this investment. For proof, you may need to show a business plan, budget, etc. The banks will also be looking at the people you’ve consulted with – financial advisors, lawyers, etc. It provides them with some idea as to the steps you’ve been taking to get your property business off the ground.
If the full home loan option doesn’t seem to work out for you, consider partnering with a spouse or another property investor. By doing this, the deposit will be split between two and may be more affordable.
What to look for in a partner
Our co-founders, Milan and Sylvia Milosevic, hit the jackpot when they not only partnered in life, but in business too. So what’s the trick in finding the ideal property partner:
- They need to have the same business goals;
- It’s a supportive partnership where everyone’s ideas are valid and valued;
- It’s easy working together;
- You encourage each other and celebrate small wins;
- There’s trust and transparency within the partnership;
- Everyone is passionate and committed to the work that needs to be done.
When you do partner with someone, make sure that there is an agreement/contract to ensure everyone’s interests are protected.
While investing in property without any money is possible, having a certain skill set will help. Learning all about property strategies and negotiating with banks will certainly work in your favour, which is why we’re offering you a chance to educate yourself…for free!
Book your seat at our FREE property investment seminars and learn the do’s and don’ts from our property experts.