Before you even consider how to become a property investor, you should make sure you fully understand how to get into the property market without affecting your financial health.
Buy-to-let property investment is a big commitment and should never be rushed into.
While you might think you have sufficient funds to cover your investment, this may not be the case if additional costs and fees are involved.
So, before you start thinking about how to start investing in property, get to grips with the financial aspects involved.
This may mean speaking to a financial advisor to learn about different taxes that buy to let investors are required to pay and get a better understanding of all the money-related lingo involved with the property market.
Investing in real estate is a business venture, after all.
When planning on how to start property investment, make sure you treat the venture like any other business plan by putting a financial focus on your strategy.
How to Invest in Property With No Money
If you want to find out how to make money from property with no money, you’re going to find property investment tricky.
To make a solid property investment, you’ll need to have the funds to cover it. There are, however, ways to invest in property without a huge amount of money.
Using a buy-to-let mortgage is one of the top finance options and the easiest way to purchase an investment property if you don’t have much cash available.
You’ll usually need to put down a mortgage deposit of around 25% with a buy-to-let mortgage. This may be higher depending on the housing market demand at the time. As of early 2024, a lot of mortgage lenders are expecting more than usual for a deposit.
At their peak in November 2022, buy-to-let mortgages hit 6.78%, according to Moneyfacts. Since then, the average mortgage rate saw considerable declines, dropping to 5.91% in February 2023.
While mortgage rates have dropped over the past months, there is still no way of knowing how they will evolve this year, and many experts are doubting the return to the lower rates seen at the heights of the Covid-19 pandemic.
However, mortgage rates are much higher than they were at the start of 2022, and higher borrowing costs mixed with the cost of living crisis have significantly bumped demand for new homes.
The lower the overall purchase price of the property, the lower this deposit will be. For example, when buying a property worth £100,000 with a buy-to-let mortgage, you would only need to put down a minimum deposit of £25,000.
Given these predictions, investors should consider investing in off-plan property if they want to get the most out of buy-to-let investment in 2024.
Off-plan properties feature significantly cheaper prices than traditional fully-built properties, making it overall more affordable to invest in comparison.
Alongside the flexible payment plans often available when buying off-plan, investors can avoid having to borrow a buy-to-let mortgage for their investment property – saving them more money in the long run and allowing for larger returns.
If you want to learn more about the benefits of investing in off-plan property, consider looking at our guide to off-plan investing.
If you don’t have enough money available for a buy-to-let deposit or a payment plan deposit but still want to know how to invest in property with no money, the best thing to do is to save up until you meet this goal.
