Can I Buy an Investment Property With No Deposit?

Investing in property can be a great way to build wealth and financial security. However, for many people, the upfront cost of a deposit can be a major barrier to entry. If you’re an Australian expat or a foreign buyer living overseas, you may be wondering if there are any ways to buy an investment property in Australia without a deposit.

The good news is that there are a few options available to you. In this article, we’ll explore some of the ways you can buy an investment property with no deposit in Australia. We’ll also provide tips for Australian expatriates and foreign buyers who are looking to invest in property in Australia.

How to Buy an Investment Property With No Deposit in Australia

There are a few different ways you can buy an investment property with no deposit in Australia. These include:

  • Guarantor loans: A guarantor loan is a type of loan where a third party agrees to guarantee the loan if the borrower defaults. This can be a good option for investors who don’t have a large deposit but have a strong financial history.
  • Equity release: If you already own a property, you may be able to release some of the equity in your home to use as a deposit for an investment property. This is a good option if you’re looking to buy a second property.
  • Property crowdfunding: Property crowdfunding is a relatively new way to invest in property. With property crowdfunding, you can invest in a property project alongside other investors. This is a good option for investors who don’t have a large deposit but want to get involved in property investment.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

What are the Best Types of Properties to Invest in With No Deposit?

Here are some of the best types of properties to invest in with no deposit:

  • Properties in popular tourist areas: These properties are in high demand during the tourist season, which means you can charge higher rents. Some popular tourist areas in Australia include the Gold Coast, the Sunshine Coast, and the Whitsunday Islands.
  • Properties near universities: These properties are in high demand from students, who are often looking for short-term rentals. Some popular university areas in Australia include Sydney, Melbourne, and Brisbane.
  • Properties in areas with strong employment growth: These properties are in high demand from people who are moving to the area for work. Some areas with strong employment growth in Australia include Sydney, Melbourne, and Perth.

What Should You Look Out for While Looking for Properties?

When looking for properties to invest in with no deposit, there are several factors you should consider and be cautious about. While it can be challenging to find such opportunities, it’s important to exercise due diligence to protect your investment.

Here are some things to look out for:

  • Financing and Legal Considerations: Explore alternative financing options and thoroughly review the terms and conditions, interest rates, and associated risks.
  • Property Evaluation: Conduct a comprehensive inspection to assess the property’s condition and identify any potential maintenance or repair costs. Additionally, research the property’s location and market demand to determine its investment potential.
  • Seller and Market Analysis: Verify the credibility of the seller or property developer and assess their reputation. Conduct thorough market research to evaluate the property’s location, rental market, and potential for future appreciation.
  • Financial Assessment: Calculate the potential return on investment, factoring in ongoing expenses such as maintenance, taxes, and insurance. Consider the property’s rental income potential and analyse the local rental market to ensure the investment is financially viable.
  • Risk Management and Exit Strategy: Evaluate the overall risk associated with the investment, considering factors like market conditions and potential changes in regulations. Develop a clear exit strategy in case you need to sell the property in the future.

What are the Benefits of Buying An Investment Property With No Deposit?

Benefits of Buying an Investment Property With No Deposit

It’s important to weigh the benefits and risks carefully before deciding whether or not to buy an investment property with no deposit. 

Benefit Explanation
You can get started in property investment sooner.
If you don't have a large deposit, it can be difficult to save up enough money to buy an investment property. With a no deposit loan, you can get started in property investment sooner and start building equity in your property.
You can take advantage of rising property prices.
If property prices are rising in your area, you can benefit from this by buying an investment property now. As the property prices rise, the value of your investment will also increase.
You can build equity in your property over time.
As you make your monthly repayments, you'll be building equity in your property. This means that you'll own a larger share of the property over time.

Risks of Buying an Investment Property With No Deposit

Risk Explanation
You may be required to pay lenders mortgage insurance (LMI).
LMI is a type of insurance that lenders require borrowers to pay if they have a low deposit. LMI can add thousands of dollars to the cost of your loan.
You may have a higher interest rate on your loan.
Lenders may charge a higher interest rate on no deposit loans, as they are considered to be a higher risk. This means that your monthly repayments will be higher.
You may be more likely to default on your loan.
If you have a low deposit, you're more likely to default on your loan if you lose your job or experience other financial difficulties. This could damage your credit rating and make it difficult to get a loan in the future.

If you’re considering this option, it’s important to get professional advice from a mortgage broker or financial advisor.

Tips for Australian Expatriates and Foreign Buyers

If you’re an Australian expatriate living overseas or a foreign buyer, there are a few things you should keep in mind when buying an investment property in Australia. These include:

  • Research the market: Before you start looking for a property, it’s important to do your research and understand the Australian property market. This includes understanding the different types of properties available, the different areas of Australia, and the current market conditions.
  • Get professional advice: It’s important to get professional advice from a mortgage broker or financial advisor before you buy an investment property. They can help you assess your financial situation and find the right loan option for you.
  • Consider your tax implications: If you’re not a resident of Australia, you’ll need to consider the tax implications of buying an investment property in Australia. You may be liable to pay Australian tax on the rental income from your property.

Want to Invest in Property in Australia?

Buying an investment property with no deposit is possible, but it’s important to do your research and understand your options. If you’re an Australian expatriate living overseas or a foreign buyer, there are a few things you should keep in mind when buying an investment property in Australia.

Find out if you are eligible to buy an investment property with no deposit. Get in touch with our professional expat mortgage brokers today to get the best advice that fits your mortgage goals.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

Frequently asked questions

There are a few ways to find a property to invest in with no deposit. You can search for properties that are being sold with no deposit on real estate websites. You can also contact mortgage brokers or financial advisors who specialise in no deposit loans.

Investing in properties with no deposit is possible through alternative financing options such as seller financing, lease options, or rent-to-own agreements. These options allow you to invest in properties without making a significant upfront payment.

However, it’s important to carefully review the terms and conditions and assess the associated risks before proceeding with such investments.

Investing in properties with no deposit still carries risks that need to be considered. Some potential risks include unfavourable financing terms, hidden costs, unforeseen maintenance or repair expenses, market volatility, and changes in regulations.

Conducting thorough due diligence, understanding the market conditions, and having a clear risk management strategy are essential to mitigate these risks.

While investing with no deposit may eliminate the need for a down payment, there may still be additional costs and fees to consider. These can include legal fees for contract review, property inspection costs, property management fees (if applicable), insurance expenses, property taxes, and ongoing maintenance costs.

It’s important to factor in these expenses when assessing the financial feasibility of the investment.

Odin Mortgage Logo

See What You Qualify For

Featured In
Geo Expat Logo
Asia xpat Logo
Expat.com Logo
Expat Living Logo
AAHK Logo
Easy Expat Logo
FREE GUIDE

10 Best Tips for Australian Expats to Maximise Borrowing Power & Approval Success