How to Get Into Property Investment - 5 Tips for Buy-to-Let Beginners

How to Get Into Property Tip 1 – Think About Your Reasons For Investing

First things first, you need to be sure that you’re ready to begin investing.

There are different reasons why people consider purchasing a buy-to-let property, and it’s essential to have a clear vision of your own reasons for getting into property.

Are you getting started with property investment as a way to grow your current finances alongside a full-time job?

Are you using property investment as a tool to generate an attractive retirement fund for later life?

Or, are you hoping to launch a full-time property business and see your initial buy-to-let investment as a good first step towards this?

Before finding out how to get into the property market, you need to be sure of your motives behind making a buy-to-let investment.

Once you understand this, you can use this knowledge to help you create a more considered and detailed strategy, as different motives could lead to different decisions.

For instance, if you’re thinking of getting into property as a way to maximise your retirement funds, you should pay a lot of attention to capital growth prospects.

This way, if you decide to sell the property when you reach retirement age, you could make attractive returns on your investment if the property has grown in value over time – on top of the rental returns you’ve acquired over the years.

Is it Worth Buying an Investment Property?

So is it actually worth learning how to get into real estate in the UK, or should you explore alternative investment options?

Property investment is considered one of the best investment methods for generating consistent returns over time.

If you understand what’s involved, know your reasons for investing, and have the available funds, it’s definitely worth getting into property investment.

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.

While a property investment company will do a lot of the work for you when getting started with property investment, this doesn’t mean you shouldn’t carry out your own research on the UK housing market before finding a suitable opportunity.

Not every property investment opportunity comes with the same potential.

If you want to learn how to get into property and benefit from the best returns possible, it’s essential to investigate the UK property market.

By researching the property market, you can learn about essential qualities like rental yields, tenant demand, capital growth, and predicted market price changes.

These are all significant components of a solid investment and should make up a big part of all buy-to-let investment strategies.

Platforms like Zoopla and Rightmove offer information on average house prices and rental costs, while property experts such as Savills and JLL release regular property market reports filled with the latest news.

Several UK locations are considered some of the best places to buy property UK.

Focus on cities like Liverpool, Manchester, Birmingham, and Leeds, which all have excellent property price growth potential in the coming years.

Property market trends can also indicate the best type of investment property to consider at that time.

For instance, if a UK city saw a high level of demand from young professional tenants but a dwindling student population, investing in residential property would be the wiser choice.

If you’re serious about learning how to become a property investor, staying on top of property market news is essential.

You should also keep an eye on any general UK news and economic trends, such as Brexit, as events like these can influence the property market.