If a Small Deposit is Not Enough

1. Combine resources with a trusted friend or family member. A joint venture with a friend or family member can help you get started faster. Sharing with the deposit and purchase costs means you need less savings up front, plus your joint incomes can increase your ability to borrow more, affording a better investment property. This method can help you build your property portfolio faster, it will also provide you reduced the cash flow risk by sharing the ongoing repairs and unexpected surprises that may pop up. Nevertheless, to ensure that you are fully protected when buying through a joint venture, here is a list of some things to consider in a joint venture agreement.

• - Ensure you have sinking fund that will cover repairs and other fees.

• - Confirm who has responsibility on specific roles.

• - Make sure that management of insurances, taxes and repairs are clearly stated.

• - Know what percentages of ownership you will each have.

• - Agree on the time period of holding the property and what will be done after.

• - Agree on the consequences if one wants to leaves the joint venture agreement.

• - Know how the property will be managed?

2. Know the cash flow of the property. When you start your investments make sure that you find something that is manageable within your cash flow budget. Don’t just jump in on any property, know the expected cash flow of a property, both before and after your tax, before purchasing. This way you won’t be hit with unexpected or high running costs. There can be a big difference in the cash flow, especially after tax, between a new home and an older one. Managing your cash flow is the key to achieving your long term investment goals.

Still have questions about financing your deposit? Why not call Madhu on 0425 341 086 for an obligation free consultation. Alternatively feel free to contact us via the contact form to book in an appointment. http://www.financeandmortgage.com.au/contact-us/