How to Invest in Properties When You’re Not Rich

Many people invest in properties when they are rich or when they have a stable income with money to spare. Many think what investments in properties can cost a bomb and hence they push back their investments until it never happens.

Real estate investing

Instead of getting wealthy first and then investing, we will show you how you can invest to get rich. Here is how we can safely invest without spending a bomb in your bank.

1. Learn how leveraging works

Since we are not millionaires, in order to invest in properties, we need to know about the amount of leverage we can get. One such huge leverage is the kind provided by a home loan. In fact, a home loan is one of the easiest, best, and cheapest to get, which is about two percent per annum. On top of this, we also have to know how home loans work and how to do it properly to your advantage.

Using other people's money

Firstly, we need to know how to reduce the cost such as by learning to refinance or reprice at certain times to our advantage or intentionally locking-in your purchase at a time beneficial to us. In addition, we can search for the most cost-efficient rates out of the many available packages and do some homework to avoid traps like ambiguous board rates.

In general, educating yourself about such home finances might be the most dreadful thing you are going to go through but if you wish to be a successful property investor, it is the most important and basic thing to start on. Enlisting the help of a reputable real estate company to help you secure the most profitable properties will also help.

2. You can’t always have your cake and eat it

For most of us non-millionaires, when we buy a house, we often envision our new lives in this new house and enjoying life. The thought of buying another house is not even an option for most of us and out of our budgets but in order to do investments, we can only treat our house as one such investment which means that we may have to compromise and live with some discomforts.


For example, buying a property for investment means buying one in a popular neighborhood or one with good prospects, and properties with upcoming malls and amenities are especially favorable. However, this might not be where you personally would prefer. In some cases, you might prefer to buy a house in a place that is on the outskirts of the city area, surrounded by trees and greenery. However, you must keep in mind the long term development of the neighborhood. Is it undergoing development that could rack up the prices of the property in the future? If not, then maybe you should forget about using it as an investment. This also brings us to the next point.

3. Everyone involved must be on-board with the plan

When starting out, we are unable to afford the house and hence we will most likely need some help getting the first property. This often means requiring help from our families. However, there are several points to take note of.

If you are married or intend to share this property with a partner, it is important that both of you have a common vision for the property, which is for investment. It would not be ideal if you are intending to use your house as a step for your next investment opportunity but your partner sees the house as their forever home. You could be at risk of inviting future conflicts. Therefore, your partner must be agreeable with purchasing a house that would be an excellent investment but could make a compromise on, especially if the property is, say, located further away from your parent’s place or even your workplace and children’s schools.

Fancy house

If you are intending to invest in the property with your family, it is important to state clearly the investment plan that you have and that everyone should be agreeable. Here’s an advice: hold a meeting, discuss the plan and pen it down so that everyone is reminded to be on the same page. You would not want a situation where you co-own a private property such as a landed property with your parents and when you have found a suitable buyer, they disagree and your plan is gone.

Do not forget that investing in properties needs in-depth decision making and a properly structured plan. You might not need to make frequent decisions, probably just a decision every few years, but when it’s time to make a decision, for example, which buyer to sell to, at what price, this choice would greatly impact your financial plans and there is almost no space for error.

This is a crucial time where everyone involved in the transaction – your family, or partner must be on the same side to pull the deal.

4. Pay attention to the details

As a first-time small investor, you cannot just purchase a house and do nothing for the next ten years. You have to pay attention to the minor details such as the minute increases in home loan repayments or increasing maintenance fees as it can contribute to the cost of the house. If you just blindly claim the 15 percent tax deduction and do not track the exact cost of the maintenance and utilities, you might be losing money when it comes to pricing the property.

Calculating real estate expenses

In addition, if you do not calculate the most cost-efficient renovation loans or check out the management office or personnel of the area, or even realize any differences between hiring a plumber on a weekend versus a weekday, you could be unknowingly losing money. These expenses may seem small but when accumulated, it could contribute a large part of your expenses.

5. Always be months ahead of the expenses

To be exact, be at least five months ahead of your expenses. Plan your expenses such that even if you lose your job today, you will still be able to afford to pay for your house for the next six months. This should be the minimum you should be striving for.

Save money for property investing

In times of a financial downturn, you would need to get rid of your property by selling in order to prevent losses, but in the case where you do not have the six months’ payment for your loan, your real estate agent would not have the time to put the house on sale, or conduct viewings to obtain a good selling price for you. Time is of the essence, and if you can sell your house later than the expected time, you will make more from it.

If you are looking to rent the property, having the six months of security would mean that there would be no rush in securing the rental with the first viewers because there would be no rush to receive rental charges. It is better to put yourself in a situation where you have the freedom to choose your tenants to select the most ideal one for your property.

You don’t need a lot of money to invest. Just be aware of the risks involved, and the compromises you may have to make. Investment isn’t about sinking a lot of money into a prospect, but about investing what you have into promising ventures. Even if you’re not a millionaire, you can still get the most out of real estate investment if you play it smart.


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