Written by Lewis Ridley
Updated over a week ago
If you’re looking to get into property investing, you might get scared off by the high upfront costs. However, there are ways to start your property journey with no money.
This article will dive into the many ways you can get started in property with no money. Let’s jump straight in.
One of the easiest ways to get started with no money is via a joint venture.
This involves partnering with someone who has money and using your knowledge of finding good investments to find properties to put it in too.
Depending on the strategy you opt for, you take the profits and split them 50/50. Thus, allowing you get started in property with no money down.
There are people out there with a ton of money sitting in the bank but have no knowledge or time when it comes to property investing.
Think about what you can offer. Is it your skills, time, do you have a team, good connections with estate agents? Be as creative as you can if you’re running forward with this strategy.
Lease option agreements are a lucrative way to get into property without any money. They do require a bit more paperwork and you may need to learn some persuasion and sales tactics.
However, once you have one sorted, you’ll have a property that generates rental income for years to come.
Lease option agreements allows you to have the option to buy a property today but pay for it in the future. You then get a lease on the property giving you control of it (without official ownership), allowing you to rent it out.
The leases usually last 5 years and you can lock in a below market price early on. This means that not only are you getting rental income for 5 years, but you also get the option to buy the property below market value in the future. Bear in mind prices tend to move up, meaning your ROI will be even greater.
Lease option agreements require several legal documents, and you need to make sure you have the right ones in place. However, the full strategy is beyond this article.
See our knowledge centre for more on lease option agreements.
Another interesting strategy is the BRRR strategy – also known as buy, refurbish, refinance, and rent.
This involves finding rundown properties that require a refurb, fixing them up, and pulling out the equity on a new and improved valuation. From here, you can either take the money and move on or rent it out and enjoy consistent income every month.
You might think you need a deposit here as well. However, you can use something called bridging finance to secure the property without a deposit.
This is a unique financing option that is often used for refurbishing projects. The bank will sometimes cover the refurb costs as well.
Once you have refurbed and got a new valuation, you can refinance using a standard mortgage and pay off the bridging loan.
The BRRR strategy, as well as bridging finance, are beyond the scope of this article. Our knowledge centre can provide more in-depth information if you’re interested in learning more.
Related: How to Remortgage a Property to Buy Another Property
Rent to rents are like lease option agreements, but they don’t involve you buying the property when the lease it up.
Rent to rent properties essentially involve you offering a landlord a fixed lease for several years that gives you the right to rent it out yourself and skim any profit from the difference.
The amount you offer the landlord will be below the current rental value so you’re able to profit from managing the property.
The trick here is to find tired or old landlords that don’t want to deal with tenants anymore but still want the consistent monthly income. By offering a lower monthly rent for several years, the landlord still gets a monthly income without the hassle of tenants or void periods.
Again, similar to lease options, you will need the right contracts in place and speaking to a solicitor could be helpful. For more information on rent-to-rent deals, see our knowledge centre.
If you want to go a more traditional route but want to avoid banks and deposits, opting for peer-to-peer lending could be a solution.
P2p lending allows you to get your hands on property finance without the legalities and roadblocks you’d experience with a bank.
The loans are typically unsecured, and the interest rates are higher. However, you can get your hands on the finance a lot quicker and there is opportunity to make more money, as a bank isn’t taking a cut in the middle.
Peer to peer lending does have its problems though and it is less regulated compared to standard property finance. There are more opportunities for getting burned if something goes wrong.
Read more about utilising peer to peer lending via our knowledge centre.
Property sourcing is a great strategy for profiting off property deals without having to actually own anything. You can also start with zero money if you’re creative in how you do it.
Property sourcing involves finding incredible deals and selling them to investors who have cash available for a quick transaction. You can often sell these deals for as much as £5000 a pop.
That means one deal a month could supplement a full-time income.
There are some costs associated with becoming a full-fledged property sourcer. So, if you’re looking for a truly no money down way into property, you may have to use a sourcer who has all the legal documentation and insurance in place. This is known as slipping.
You can use our software to find these lucrative deals and give yourself an edge if this is the strategy you’re going to utilise.
Related: How to Become a Property Sourcer
Getting into property can be done without money. There are several methods you can utilise to either buy a property or sell a property deal without using any of your own money.
Explore the options above and see our knowledge centre for more specific details about each strategy.