What happens when you want to take advantage of a great property investment opportunity but your cash is tied up elsewhere? Melbourne-based property investor Kim Castles found the answer in a deposit bond.

Kim, 52, has been a property investor since she was just 19, so she knows a good opportunity when she sees one. When she was told about a property development in Maroochydore on the Sunshine Coast, she jumped on the plane to take a closer look.

It was a resounding “yes” but she didn’t have immediate access to her cash for the deposit. As is often the case for property investors, her cash was tied up in other properties.
“I didn’t want to go to the bank for a loan – they do thousands of checks, especially for off-the-plan developments. Even with my equity, the process would have been long and stressful, and I really wanted to move on this property,” Kim explains.

The Melbournian’s broker explained a possible solution: deposit bonds. A deposit bond is a simple and effective way of making sure that you can cover the deposit when you don’t have immediate access to the cash. The value of the bond is equal to the deposit needed and it acts as a guarantee that the buyer will pay the vendor the deposit in settlement day. Then, on settlement, the buyer pays the vendor the price of the property, including the deposit.

“Deposit bonds were a completely new concept to me. Ever since I bought my first property aged nineteen, I’ve always had the cash available,” Kim says. “I didn’t know how a deposit bond would work or even where to start!”
Luckily, her broker recommended Deposit Assure so she wasted no time getting in touch.

“Deposit bonds have been around for years, and now they are being recognised as smart option for property investors who have the equity but lack easy access to the cash for a deposit,” explains Etienne Rizzo, co-founder and director of Deposit Assure. “Even if buyers do have the cash, it is sometimes more worthwhile keeping it where it is – especially when you’re buying an off-the-plan property, where that cash deposit will be locked away for anywhere up to five years.”

The first step for Kim was to check with the developer that they would accept the deposit bond in place of a cash deposit. Many large developers, such as Mirvac, Caydons and Colliers, may request a deposit bond with an A+ credit rating. “The reason is simply because it gives the vendor peace of mind that in the unlikely event that the buyer does not complete the purchase and there’s a claim, their deposit will still be honoured,” explains Etienne.
Because Deposit Assure deposit bonds are backed by QBE Insurance (Australia) Ltd, Kim’s developer was happy to accept the bond.

Next, Deposit Assure’s team worked with Kim to complete the application. “They were professional, honest and really knew what they were doing,” she recalls. “This was really important to me. Because I was buying interstate, I needed to trust that everything would happen to plan. Deposit Assure made the whole process easy and it was completed well within our timeframe.”

Kim says she would definitely recommend a deposit bond as an option for investors like her. “Lots of people don’t have a deposit – either they’re trying to save, can’t access their own funds, or don’t want the hassle of going through a bank. A deposit bond is a really handy, easy alternative.”

If you’re a property investor like Kim looking to buy your next property, but lack access to the cash deposit, a deposit bond could help.
Find out whether you’re eligible, how to apply, and get help with paperwork from Deposit Assure’s Concierge Team today.  Click on the ‘Lets Get Started’ button below, and enter your email or phone number, and we’ll get back to you within one business hour.

LET’S GET STARTED!

Are you buying off the plan? Read our how to use a deposit bond for an off-the-plan purchase here. Even better, get in touch!

OTHER REAL-LIFE STORIES

Buying off the plan with a deposit bond helped this downsizer secure their dreamhome before selling the current one.

It’s a downsizer’s dream to be able to purchase a smaller home before selling the current one. The problem is, most of us will still need to find a deposit to make the dream come true, as Sydney-sider Angela Verad discovered.

Read More

A deposit bond helped sea-changers win their waterfront dream.

When Anne Moss found her dream home on the south coast of New South Wales, she knew it was a matter of moving fast or missing out. Read how a deposit bond helped them to secure their home.

Read More

When Camille and Sarah found a beautiful unit being built in the historic village of Woodend in Victoria, they knew the time had come for a lifestyle change. All they needed now was the deposit.

When Camille and Sarah found a beautiful unit being built in the historic village of Woodend in Victoria, they knew the time had come for a lifestyle change. All they needed now was the deposit.

Read More

New South Wales couple David and Alison thought they had it all covered when they decided to buy a beautiful off-the-plan unit in Potts Point. But then everything changed.

New South Wales couple David and Alison thought they had it all covered when they decided to buy a beautiful off-the-plan unit in Potts Point. But then everything changed.

Read More

When New South Wales couple Anna and Phillip Towers realised they had to put down a 10% deposit for an off the plan property, they thought the dream was over, until they discovered a deposit bond.

When New South Wales couple Anna and Phillip Towers realised they had to put down a 10% deposit for an off the plan property, they thought the dream was over.

Read More

Buying and selling property at the same time can be tricky, especially when your funds are tied up. Sydney resident Samantha found the answer with a deposit bond.

Buying and selling property at the same time can be tricky, especially when your funds are tied up. Sydney resident Samantha found the answer.

Read More

MORE POSTS

You could be next

Every day we help more Australians purchase a property using a deposit bond. Discover how we can do the same for you or your client. Why choose Deposit Assure ?

Apply for a deposit bond

 

circle-express-bond

  • Purchasing as an individual.
  • Settling within 6 months.
  • Unconditional finance approval or
    Will not need finance to complete purchase

circle-or
circle-standard-bond

  • Settling over 6 months.
  • Purchasing off the Plan.
  • Purchasing at Auction.
  • Purchasing in a Super Fund, Company or Trust.

Got Questions? - Get in touch with us

What our customers are saying about us

4,000 Registered
Agents
6,500 Deposit AssureBonds Issued