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

Buy-to-let investment is one of the best asset classes to consider if you want to make money from property, boost your income, grow a diverse investment portfolio, and make returns that will help you in later life.

If you’re interested in getting started with the buy-to-let property market and want to find out tips on how to start investing in property, you’ve come to the right place.

Read our guide with five top tips useful for the beginner property investor who wants to know how to get into property investment.

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.

Once you’ve thought about your reasons for investing in property and your overall goals, you should have a better idea of what to look for in an investment property.

The main things to pay attention to when you’re finding an investment property are:

• The potential rental yields and rental returns available with the property
• The potential capital growth returns you could make.
• The likelihood of high demand from people seeking a rental property.

A rental yield is a percentage figure that shows the amount you can make in rental returns. Capital growth returns are the returns you make when you’re able to sell a property for a higher amount than you initially paid for it.

With rental yields, the higher your percentage figure, the better. Often, yields of around 6% are considered attractive, with higher figures of 8% being ideal.

Many property companies will list either the projected or assured rental yields that come with their buy to let opportunities.

If you need to work out a potential rental yield on your own, you can do so by working out the annual rental income you can expect to receive, dividing your figure by the purchase price of the property, and then multiplying by 100.

Read our guide ‘what is a good rental yield?’ for more information on rental yields and how to find them or calculate them.

When it comes to capital growth returns, you’ll need to pay attention to properties in areas that have seen significant growth over the past year or so, as well as predictions for high growth yet to come.

We’ll discuss how to find opportunities that tick these buy-to-let criteria in section five of our guide on how to get into property.

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 2023, 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.

As of May 2023, the average 2-year fixed rate is now 5.28%, and the average 5-year rate is 5%.

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 in 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 2023.

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.

One of the number one tips on how to start investing in property is to enlist the help of a property investment company.

Buying property through a company is a good tip for real estate investing for beginners. It allows you to explore a range of buy-to-let opportunities from trusted property developers without having to search around for an investment property yourself.

A property investment company will do most of the work for you, finding property deals with the most impressive yields in high-growth areas, liaising with solicitors, and even finding you a suitable property management company if you want to make a hands-off investment.

Better yet, they’ll be happy to provide potential investors with advice on how to get into property investment as a beginner, along with offering experienced investors advice on how to grow their property portfolio.

Many property companies will also offer below-market property prices for their off-plan properties, as well as a guaranteed rental income on certain properties for a period of one or two years.

This way, you can get started in property while knowing that you’re in good hands to guide you through each step of the buy-to-let process.

How Do I Start Investing in Property?

The easiest way to begin investing in property is to enquire with a property investment company about different opportunities you’re interested in.

This way, you can receive first-hand advice on the property market and learn how to start a property investment venture with your available budget.

Once contact has been made with the property company, you’ll be invited for meetings and property viewings where you can find out more about certain properties.

You’ll also get the chance to explore opportunities that fit your budget and be guided through the most affordable properties.

By utilising this process, those who feel unsure how to become a property investor with lower funds can safely and securely begin their investor journey.

When working with a property investment company, be sure to conduct due diligence on the property company itself and the company leading the development project.

Read our guide on the sales process at RWinvest to give you a better idea of how to start investing in property.

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.

House prices in the UK aren’t expected to go down anytime soon. In fact, property experts, Savills, predict the opposite to happen.

In their most up to date residential market forecast, Savills expect UK property prices to rise by 6.2% by 2027.

In other regions like the North West, 11.7% average property price growth is predicted across the next five years.

Get Into Property with RWinvest

If you’re ready to get started with property investment, we can help you.

We have the experience, knowledge, and opportunities needed to help you make a lucrative buy-to-let investment in the UK.

With prices starting under £100k and rental yields of up to 8%, you can easily invest in the top UK buy-to-let areas with high expected capital appreciation.

Start a chat with one of our property consultants via the link above, or give one of our offices a call today.