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How to save for your first (or next) property deposit

Posted by Paul Wilson

A question I’m frequently asked by would-be property investors relates to property deposits. It seems like everyone wants to know: How do investors get their first – or next – investment property deposit together?


I’ve been in this business a while now and let me tell you, some of the stories I’ve heard over the years are truly inspiring. When a person sets their heart on getting into the property investment market, it amazes me just how determined they can be.


If you have cash readily available to put up as a deposit then you’re already well on your way. If you have equity in your home then getting into property investment will be relatively straightforward, too.


However, this is not the case for many people.


To get an investment loan these days, lenders are looking for 20 per cent deposits (plus buying costs). The harsh reality is that today’s investor has to be more financial – and often more creative.


Not everyone actually has the cash or a home from which they can draw equity. Some of our clients travel a lot, work away on contracts or just haven’t planned on settling down any time soon and so they need to find an alternative source of money for their investment property deposit.


Some of the strategies I have seen people use in order to get a deposit together include:

-      Downgrading their cars, selling boats and offloading other high-value items

-      Taking out personal loans (in their partner’s name, for mortgage purposes)

-      Getting a second job for extra income

-      Selling items online via sites like eBay and Gumtree

-      Saving their tax return to put towards a deposit.


It’s amazing how creative people can be when they’re attempting to get their foot in the door!


No one said it was easy, but if a person is determined to get ahead, they will make the hard choices.


In the early days of property investing, it’s all about buying assets that grow (like property) and passing on the assets that cost (like cars and boats).


Once you have your first property, and with continued work and investment know how, the second, third and so on will follow.

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