TO SIGN UP TO MY NEWSLETTER, PLEASE CLICK HERE.
10 Things I’ve Learnt (Part 3)
In this blog post I reveal No. 3 on the list of 10 things that I’ve learned over the last 20 years of investing for myself. It’s this: You don’t need to have your own money to get started in property.
If you’re new to investing or have very little knowledge or experience of how it works, you might assume that in order to be a property investor, you need to have loads of money. After all, even a relatively cheap property is quite expensive in absolute terms.
At the moment, probably one of the cheapest properties you’re going to find, which might be a property up in the North of England, is likely to set you back £40,000 to £50,000. And whilst this is relatively cheap compared to prices in central London, for example, in absolute terms it’s quite a lot of money. So, it’s not unsurprising that many think you need to have a lot of money to get started.
I can tell you that this is not the case.
There is the argument that you do need some money, but the key thing is that it doesn’t have to be your money.
To give you an example, when I first started in property many years back I had no money of my own and the first thing I did was to remortgage my home. I took out the equity and used this as seed capital for my business.
It might be that you’re just starting out in property and may be thinking that you’ve got to spend years and years saving up for your first deposit. Well, in my case, by using the equity from my home, I managed to get around that. I didn’t have to save up for the deposit for my first property, and by using the equity I was able to buy 8 properties in my first year of being an investor.
Getting into property doesn’t have to be a slow process because money shouldn’t hold you back.
Since I first began all those year back, things have changed tremendously and there are now many other ways to get the money you need to get started – for example, joint venture partnerships.
The concept of using JV partnership funds has become far more mainstream than it used to be. Basically, you find a business partner who will either come in and do a deal perhaps on a 50/50 basis, or find somebody who will simply lend you the cash in exchange for a decent return on their investment.
Then you have techniques such as “No Money Down” and the use of “options”; instalment contracts, delayed completion, rent to rents… and a number of other strategies and techniques to help you get around a lack of money. Or, it might even be that you just start out by sourcing deals for other people. Having said that though, if you can source deals, you can probably source JV partners who would finance deals for you – and this means you can probably even keep a stake of the property.
So, if you really want to get into property, don’t let money hold you back. There are ways and means of getting around a lack of money, and whilst perhaps in the past it may have been a bit of a stumbling block, today there are ways to get started with limited or even no funds.
Here’s to successful property investing.
Peter Jones B.Sc FRICS
Chartered Surveyor, author and property investor
By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to: