I’m Rich and I welcome you on my personal space on the Internet. I created this blog with a single purpose – to inspire you to take charge of your money and help you become a financially successful and independent person.
Three Pro Tips to Get a Foot on the Property Ladder
Everyone should aim to get at least one foot on the property ladder at some point in their lives. Owning property gives you a valuable asset that can help you grow your wealth in so many different ways. It’s one of the best investments you can make, so how do you get started? Here are three tips to help you get a foot on the property ladder.
Save for a Downpayment
A downpayment is a percentage of the property’s value that you have to pay to own it. What typically happens is most people get mortgage home loans when buying properties. These loans cover the cost of the property, but you need to put a payment down as well. The good thing is, downpayments can be as little as 5% of the property value. Therefore, you just need to calculate how much to save in order to put a payment down like this. For a $200,000 home, this would mean saving $10,000. It’s still a lot of money, but far easier to achieve than saving for the full price of a house.
Improve Your Credit Score
Before you start looking at mortgages, you need to work on your credit score. Thankfully, saving money for your downpayment will actually help you do this. Saving money means you’re spending less, which shows you’re financially responsible. It’ll mean you have less need to borrow money, which improves your credit score. You need a good score because it dictates if you get approval for a home loan or not. Bad scores can get rejected, while others can result in more expensive interest rates and smaller loans that don’t give you enough to afford your home.
If you need help improving your credit score in a short space of time, check out the video below:
Join an Investment Fund
If you are struggling to save money to afford your first property, one alternative is to join an investment fund. As these DiversyFund reviews show, there are funds out there that focus on collecting money to invest in properties. Essentially, you are a member of the fund, and you contribute whatever you can to it. Other people also sign up, and your money is pooled together to invest in properties. Technically, you are now on the property market as you owe a percentage of the properties! Any money that’s gained from these properties will find its way back to you, relative to how much money you put in. It’s not the most profitable way to invest in property, but it can be a smart way to get started if you have hardly any money to invest.
The most important takeaway from this post is that you don’t need to be extremely wealthy to invest in property. Don’t focus on the full cost of a house; think about how much you need to pay as a downpayment instead. Or, if you think it will be difficult to save up, think about joining real estate investment funds.