In a recent video on my YouTube channel, I toured around Detroit with my wife Amanda, where houses are listed for sale for as little as $5k! Of course, not everything is always as easy as it seems. The catch is that if you buy one of these properties you have to do it up, and because they are in run down areas, the increase in value is likely to be similar to what you spend on the refurbishment.
That said, buying in areas that are currently run down can be an excellent strategy in the long-term. Watch the full video (above) and then head over to YouTube and tell me what you think of this opportunity. In this article, I will give you 3 ways to buy property right here in the UK on a tight budget.
1. Lease Options
If you want to invest in property but don’t have much in the way of starting capital, lease option agreements are an excellent choice. A lease option agreement is where you take over a property for a period of years and pay the mortgage. At the end of the term, you have the right – but not the obligation – to purchase the property. In the meanwhile, you rent out the property to cover the mortgage and generate a profit.
Why would any seller agree to this? The answer is negative equity. There are homeowners that cannot sell their property for a high enough price to pay off the mortgage. These people just want out and to be rid of their home. You take the property off their hands, take over the mortgage and the maintenance, and offer them a potential sale down the road.
2. Joint Ventures
If you can find good deals and manage properties, you don’t need money to get started. You just need to find investors looking for a passive return. Investors are more than happy to joint venture with people that can bring in excellent returns for them and are able to do all of the work. You may be able to negotiate a 50/50 split of the profits, although it might be lower if you are new to the game.
The catch here is being able to find amazing deals and knowing how to manage them once you have got them. This is why it is important to get high quality property training before finding investors.
If you have some money but not a lot, you may think you can’t afford to buy a property (especially if you are from London or the South of England). But this isn’t necessarily true nationwide. You don’t need to buy where you live. Find an area that has bottomed out in terms of price but is in the process of regeneration. You may find that you only need a very minimal deposit. You could also use creative strategies like Buy, Refurbish, Refinance, Rent (BRRR) to recycle your cash and buy multiple properties.
If you need a hand getting started in the property game, why not book on to my next £1 property event? You can book a ticket here. I hope to see you there soon!