The number one thing that holds women back from getting started in property investing is the belief that they need to be in the “perfect” situation to get started.
You see, as women we’ve been conditioned to believe that we need to wait. Wait until we’re more qualified, until we’ve saved more, until the timing is just right. We don’t go for the job we really want because we don’t meet 100% of the job description. We hold back on that investment we KNOW will benefit us because we’ve been taught that we need to have it all together before we take the leap.
But the truth is: nobody has it all figured out, and in the property world, waiting for the perfect moment does nothing but set you up for big opportunities to pass you by.
All of this is to say, these days we’re seeing more and more women jumping into the big wide world of investing, and often they’re exploring some of the less-traditional (but still totally successful) strategies.
So, here are 4 approaches to property investment we think you should know – especially if you’re sick of waiting for the perfect moment and you’re ready to jump in NOW.
- Rentvesting
What is it: Rentvesting is where you buy an investment property in an affordable or strategic location, but you continue renting in the place you actually WANT to live.
Why it works: Sometimes – especially when you’re just getting started, the place that you WANT to live isn’t actually aligned with what you can afford to buy. Lots of women love the lifestyle of inner-city living, but with the current state of the market it’s just not viable to buy there for many of them. With rentvesting you can stay where you love, but invest in an area that has high rental demand or strong growth-potential. The win-win? You don’t have to compromise on your lifestyle but you still get to build wealth through your investment.
Who it’s good for: First time investors, career-focused professionals who don’t want to commute, women who want flexibility where they live.
- Using a guarantor
What is it: A guarantor is somebody (usually a parent or other direct family member) who offers up some of the equity from their existing investments or their own savings to help you secure a home loan. They’re basically vouching for you to a lender saying “If she can’t make her repayments, I’ve got it covered,” which can give a lender more confidence in the amount you’re borrowing.
Why it works: Having a guarantor can help you get into the market faster, especially if you don’t have a very big deposit. It’s a great option if someone in your family is willing to support you – because sometimes you just need a bit of a helping hand to get in and get started.
Who it’s good for: First-time buyers with family members who are willing to give a helping hand,
- Paying LMI (Lenders Mortgage Insurance)
What is it: LMI is the insurance you have to pay if you’re BORROWING more than 80% of the property’s value – so basically if you have a deposit less than 20%. It’s designed to protect the lender and does add on to your upfront costs, BUT hear us out…
Why it works: Often women will wait to have more than 20% of a deposit saved up to avoid paying LMI, BUT when the market is hot and house prices are steadily rising (like they are right now!) you can actually end up making the money back from the capital growth you gain by getting in sooner. It’s all about timing, and sometimes, getting in sooner and copping the upfront LMI costs will pay off far more than waiting around and letting a rising market pass you by.
Who it’s good for: Women who have a solid financial plan, understand the costs and are ready to enter the market NOW, rather than waiting.
- Leveraging equity from another property
What is it: Equity is the difference between your property’s current value and how much you still owe on it. When you leverage your equity, essentially you use the money you’ve made from the rising value of the property as a deposit for another investment.
Why it works: Leveraging equity means you don’t need to start saving from scratch every single time you want to buy another investment property. It’s the tried and tested way people build successful portfolios and scale their investments.
Who it’s good for: Existing homeowners, rentvestors with properties that have seen solid growth, and anyone else who is sitting on untapped equity.
But how do you know which strategy is right for you? Well, at the end of the day it all comes down to YOUR financial goals, and what you want out of investing. You may be looking to build long-term wealth, maybe you want to create more flexibility in your lifestyle, and you might even be looking to secure some investments for your kids.
Whatever it is – only YOU know what your goals are. And once those goals are crystal clear, well, then you can map out your financial situation, speak to the experts (that’s where we come in!) and choose a strategy that fits the vision you have for your future.
We’re here to help you figure out the right way forward for YOU, no matter where you’re at – so reach out here and let’s have a chat about which strategy might suit you.