Even though it is considered a profitable investment due to rising property prices every year, public access to purchase property is still limited. The problem of advances is always a major obstacle. In fact, the down payment is the main capital when you want to make a purchase.
Property investment is quite tempting. Even the increase in profits can reach 50% per year. It is not surprising that many people make this type of investment as retirement capital in old age. Unfortunately, not a few have difficulties when they want to buy a house or other property due to restrictions on down payments. The question is, is there a way to still be able to buy property when you don’t have the funds for a down payment?
If you are currently running out of cash reserves but want to invest in property, then borrowing funds for down payment is one option. It’s just that, still limit the debt to the amount you can pay at a later date.
Look for a lender who can cover your down payment at a low interest rate. After that, also calculate the interest rate given by the borrower. You need to do this calculation so that you can still make a profit at the end of the investment period.
You can also borrow these funds from friends, family members or business partners. Also make sure to enter into a detailed contract € ”including the term of payment and the interest rate to be used €” to avoid future misunderstandings.
Look for Seller Financing
If the seller is in the mood for a quick sale of his property, then he will be willing to make it easier for you in your purchase. You can make certain offers, for example, you are willing to pay higher monthly installments in lieu of a down payment.
If you intend to use a traditional € ”lending method such as using a bank as the intermediary, you can negotiate an agreement with the seller to pre-install the deposit.
Lease Property with Purchase Option
Leasing with the purchase option can be an option when you do not have funds for an advance payment. By leasing, you will have a lease agreement that contains several clauses, including the options you have as the debtor to buy or continue the lease.
The important thing to note is that this lease is different from buy-rent. Leasing provides the option to buy or continue the lease, whereas buy-lease has an agreement that allows the creditor to withdraw the object of the lease again if the debtor is unable to complete the installments.
For this one option, you may need to have certain abilities. This is usually done between developers and landowners, or investors and developers.
If you have the ability as a contractor, then you can easily trade your skills with a seller who wants to rebuild his residence elsewhere. But for those of other professions, you need to find out in advance the skills needed by the seller.
For example, you are a lawyer and the salesperson is in need of legal consulting services for his personal business. By exchanging services for a down payment, you may get an unmarked property.
Take over or take over is one way to own property without down payment. You can find debtors who are no longer able to continue their installments. You can also contact certain financial institutions that act as creditors in the property sector.
The thing that needs to be considered when going to take over is to carefully examine the agreement between the debtor and creditor of the property. Such checks are necessary because some forms of loans have special conditions that prohibit take-over transactions.
Make a Partnership
If you have a big idea about this investment but don’t have enough funds as a down payment, try to partner with investors. That is, they can provide you with capital in exchange for your labor to manage the property.
It should be noted, make the contract regarding the obligations of each party clearly. In addition, also make how the profits from the investment are shared. If your partner is really only a backer of funds, then you need to monitor daily the management aspects of the investment.
From the various options available above, choose the method that you think best suits your current financial condition and abilities. If possible, do various variations of these options, such as taking over for a property as well as making a partnership from the property, or others.