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In This Video:

00:19 How do you get help when buying your first investment property?
03:12 Make sure you save

G’day there, Daimien here from Integrity Property Education. If you’re into property investment, property investing, looking for property investing strategies, or property investment advice, you’ve come to the right place.

How do you get help when buying your first investment property?

Today’s blog video is How do you get help when trying to buy your first property!

So, how do we get help when we are trying to buy our first property. Well, you don’t necessarily have to save all the money on your own. One way is to go to your family, perhaps your parents and ask them to support you. Now a lot of people cringe at that thought straight away thinking that their parents are going to tell them to nick off, but actually you don’t have to ask your parents for the cash. You can just ask your parents for a loan, and what I suggest people do is they go to their parents and say ‘Mum, Dad, can I get a $50,000 – $60,000 equity loan secured against your property, and then I want to use that money to pay the deposit and costs on my first investment property. Then I’ll make all the repayments on that $50,000-$60,000 loan’. Which is not much at all, about $100 bucks a week in interest.

Now this can catapult you into the property market, because until your own a property, you really don’t have any significant asset that’s actually going to go up in value, and often for young people they find themselves in a trap where they are constantly paying car loans, credit card loans and things like that and are never able to get ahead, so this can be a really clever strategy.

Now, you take the money from that loan, which is in their name, against their mortgage, and you use it to pay the deposit and costs on your property, and get a 90% deposit against your own name secured against the new property. Then, you therefore have two loans. The one that you responsible for your parents, and the one on your property. This can get you into the market straight away. Now some financial brokers may suggest that you do it a different way and that you get a 100% loan and get your parents to be a guarantor for the loan. Now I don’t think this is a good idea, and the reason is because is this, if you fall over or skip the country for some reason, your parents are then going to have 100% of that loan to be responsible for, and you are still going to be the owner of that property, and they won’t have the security.

This can be devastating, and for a lot of parents may not want to loan you the money in the first place. A much lower risk option is to just get them to do a small little loan that you then make the repayments on, and then you’ve got responsibility for 90% of the debt in your own name against your own property.

This is a much palatable idea for your parents to support you with. Once you’ve convinced mum and dad to do that, and it is easier to do that because you’re not asking mum or dad to buy you a car, or send you on a round the world holiday, you’re asking mum and dad to get you into your first property. They will know the best thing they ever did financially was buy a house, and you will be surprised how supportive they will be to do that. Now if not your parents, you may have another family member who you can ask.

Make Sure You Save

That being said however, you still need to have some genuine savings so that the bank can see you have the capacity to save some money. If you are flat broke. The banks probably won’t lend you any, but it you have a little bit of savings say $5,000-$10,000 grand the banks will support you generally speaking if you have parent or help for the rest of it. The bank is just want to see that you can save a bit of money so that you can service that new loan.

The other thing to remember too, is that an investment property will bring in rent as opposed to owning your own home, so therefore it might be easier to buy an investment property first, rather than your own home. Now, when they bought out the first home buyers grant, you used to disqualify yourself from the grant if you bought an investment property first, but now that’s no longer the case. If you buy an investment property first, you will still be eligible for the first home owners grant when you acquire your own home later.

So there’s a good way to get into the market there, if perhaps you didn’t think you could. If you thought this post good and you think other people can benefit from it, please share it. Get this knowledge out there, because there are a lot of people out there who are still paying rent, still struggling, and hoping to get into a home and they don’t realise this option is available to them and it’s going to be very very valuable.

Now if you haven’t done our one day course we run them all around the country and they are absolutely free. Go to www.propertyinvestmentmentor.com.au, and click on the free training tab, and you’ll see when we’re next coming to a location near you, and you just need to register for that training day and you can come along free of charge. No obligation to do anything at the end. If you go on the landing page, you’ll read all about it, you’ll see the testimonials from people who have already been. It’s a great course and people really love going along.

Until next time, that’s it from me. Happy property investing and thank you for your time. Cheers.

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