Lack of money has always been a problem for people trying to get into property investing, and that is why options like ‘no money down’ property investing are being considered. Working hard and saving might be a solution, but it might not be feasible if you do not make much. It would mean years of saving, and by the time you are accumulating the amount you need, it might be too late. That is why individuals seek loans and mortgages to help them achieve their goals at the moment and pay back the borrowed money slowly.
Loans and mortgages are not a solution for everyone. You must have a good credit score and meet various requirements highlighted by loan financing and mortgage companies to qualify for a mortgage. You may also be required to make a large initial deposit, which you may not have. The solution to your problem could be ‘no money down’ property investing.
What is ‘no money down’ property investing?
This is a scenario where you require no money to own or use a piece of property. It may also be a situation where you only need to put up a small fee, which can be as low as £1 to own or use a piece of property. Usually, this small fee is a way of making the agreement legally binding; in other words, proof of exchange.
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You may not come across financial institutions (loan and mortgage companies) that offer no money down property investing services. No money down property investing is mostly practised by creative property investors; they have the knowledge and ability to be imaginative and creative.
Be very careful, though! Some of the strategies you use might fall under mortgage fraud, meaning you need to have plenty of knowledge on mortgage and mortgage fraud. This is why you might come across some individuals claiming that no money down property investing is illegal. It can only be illegal if the strategies used might lead to mortgage fraud.
Can you invest in property in the UK with no money down?
Yes, you can, but as mentioned earlier, you have to be knowledgeable and creative. Here are examples of ways you can invest in property in the UK with no money down:
Joint venture
Look for individuals with money, but lack knowledge in property investing. Make an agreement with them, where you share the profits 50/50. Your contributions are termed as value, where you bring in knowledge value and the investor in the cash value.
You can even come across lending agreements that are not shared 50/50. Investors may only want a particular percentage every month, and you can have the rest.
Rent-to-own properties
This can be a gold mine if you are creative. Using your knowledge on properties, find rent-to-own properties located in areas where people would like to live or rent. Talk to the owner and find out how much the rent is and how many months you need to pay to own the property.
The next step is finding a tenant willing to pay a slightly higher rent; the tenant will be paying you rent. Pay the property owner the rent he or she requested and keep the rest as profit.
Over time the property may increase in value – you can even carry out renovations to increase the value. You will be bringing in profits monthly and once you own the house and the tenant moves out, you can either continue renting it out to a new tenant and at a higher rent or sell it at the new market price.
