Investing on a shoestring

Can you buy an investment property on a small budget? The simple answer is ‘absolutely’! You don’t necessarily need to be pulling in the big bucks to afford an investment property. By making smart decisions, there’s no reason why you can’t join the millions of Australians who own an investment property.

Of course, it’s best to seek advice from a financial planner before making any big decisions, but here are some scenarios that may work for you.

Use your existing equity

If you already have a mortgage, you may be able to use your existing equity to buy your next property.

Equity is the difference between the market value of your property and your loan balance. Say your property’s market value is $800,000 and you owe the bank $500,000, your equity is $300,000.

If your property’s value has increased or you’ve paid down your mortgage somewhat, you may consider refinancing your current loan to unlock your equity. Essentially this works in place of you needing to have the actual savings to buy an investment property.

Go regional

If your budget is tight and you can’t afford to invest in a major city, explore regional areas.

Many regional areas are in fact outperforming capital cities during the pandemic period in terms of vacancies, rents and prices.

For inspiration, check out PRD Stand Out Regions: Top 10 Affordable Regional Areas 2021 report. Based on affordability, property trends, investment considerations, project development and the unemployment rate, these areas were standouts:

  • Whitsunday LGA | QLD
  • Mackay LGA | QLD
  • Toowoomba LGA | QLD
  • Port Stephens LGA | NSW
  • Greater Hume Region | NSW
  • Federation LGA | NSW
  • Greater Bendigo City | VIC
  • Greater Geelong LGA | VIC
  • Warrnambool LGA | VIC
  • Circular Head LGA | TAS

Consider a partnership agreement

Another option that may work for you is a partnership agreement, or a joint real estate investment.

This is essentially where someone agrees to purchase the investment property with you, either by paying the deposit or with some other type of arrangement.

Even though you’ll share in the ownership, it may be worth considering this option if it allows you to get a foot up on the property ladder sooner rather than later.

It’s important to consider the implications of going down this road and to seek legal advice so all parties are clear about how it would work.

Investigate buying off-the-plan

When buying off-the-plan, you sign the contract of sale and pay a deposit (usually only 10%), with the balance due when it’s finished.

As such, you can secure an investment property with a smaller deposit, then have potentially 1-2 years to prepare yourself financially while the property is being built.

Another benefit is that the price is locked in at the time the contract is signed, so even if the value of the property goes up during construction (yay!), the price is set.

There can be numerous risks with buying off-the-plan, including the potential for the property’s value to decrease during the build, so it’s best to do your research.

Want to explore your finance options?

Speak to us today and we’ll explain what kind of finance is available to help you achieve your goals!

Are you a first homebuyer looking for

Help?

We can help get you into your new home.

We’ve worked with clients across Australia to access the different first home owner grants (FHOG) as well as the various stamp duty and other concessions that may be available depending on which state you are in. We can talk you through your various options as well as helping you compare things like buying vacant land vs. an established home.

Enquire today!

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A word from our satisfied customers

Maxine Zhong
Maxine Zhong
19 October 2023
Amanda has been such an incredible support throughout our very first time going through the home loan process. Her thoughtfulness to regularly check in to make sure all our questions were answered and that all our documents were in place helped to make the whole daunting process feel seamless and easy. I could not recommend her enough - she made sure to keep us informed every step of the way and made sure all necessary documents/processes were completed well ahead of time so we never had to worry about missing any steps. She went well above and beyond her role, and I know we will definitely be coming back to her in the future, as well as recommending her to all of our networks! Thank you again, Amanda!
Mark Nesbitt
Mark Nesbitt
11 October 2023
Greg and the team provide an outstanding service. Highly recommended
Christine Tran
Christine Tran
23 September 2023
Yuval handled my first ever home loan, he did such an amazing job I asked to him to refinance for me 2 years later. Yuval made everything very easy for me, and will give his best recommendation as if it was his own. Would always recommend Yuval :)
David Petrini
David Petrini
25 August 2023
Yuval Bloomfield was an absolute delight to work with. He made it extremely easy for my clients to discuss about their financial situation. With Yuval's strong connections he was able to get the loan my clients wanted in very quick time. Will definitely refer Yuval again.
Sophie Linehan
Sophie Linehan
24 August 2023
Greg and the team at 1st Street were fantastic all the way through the process of getting our financing sorted and buying a new home. They not only secured us the most competitive mortgage in the market but they also gave advice on a number of mortgage-adjacent questions that came up along the way. Their responsive and thoughtful guidance helped make the nail-biting process clear and calm. We would definitely recommend their services.
Gabrielle Scott-Jones
Gabrielle Scott-Jones
18 August 2023
Greg and his team gave me exceptional advice and support. They were timely and detailed in their responses and dealt patiently with me as a first home buyer and all of my questions. The lender at the bank commented on how well I was being looked after compared with other brokers in the market. I’d highly recommend 1st Street to anyone, including friends and family.
Eli Simic
Eli Simic
15 August 2023
Great communication and fast service
Richard Kuipers
Richard Kuipers
11 August 2023
Jeremy and his team are superb. Negotiated the best deal for us and were an absolure pleasure to work with. Highly recommended, you can't do any better in my opinion.
Jordan Rivkin
Jordan Rivkin
1 August 2023
The team at 1st Street truly are professionals. I can't recommend Jeremy highly enough, he is extremely competent and just a great guy. You're in safe hands with 1st Street!
Yossi Bengida
Yossi Bengida
23 July 2023
Another amazing job by David and Bree. Always available for our questions, helpful and just 10/10 Seriously good work !! See you on the next one :) Yossi and liz