Getting Started on Real Estate Investments

There is no better time to get started in real estate investing as house prices have taken a tumble. Real estate investing is ideal for young and old and all those who have some extra cash left by. Surprisingly you do not need as much cash as you may think. After you invest in your first property you will be addicted and fall under the spell of real estate investing. 

So just how do you get started real estate investing, and is it possible with small amounts of money? If you are a first time buyer you may wish to purchase a home that is need of renovation. This type of home is set to sell for much less on the property market.  It is a good idea to spend time looking around for property bargains and pick a home in a good area near good facilities. When house prices start recovering these homes will be worth more. At the moment it is possible to pick up a small 2 bedroomed home for as little as £42000 in some areas. A 10% deposit on this home would mean you would only need to put £4200 as a down payment whilst the low mortgage rates at this moment in time would enable you to pay as little as £270 per month. While the mortgage rates stay this low you could easily be overpaying your mortgage and making home renovations and improvements to increase the value of your home.

After a few years your home will be worth more money and as you have made extra payments to your mortgage you will have some equity available to buy another house to use for renting purposes. As buying a second house requires a buy-to-let mortgage you will need around 30-35% deposit, so here again if you buy a house around £50 000 you will need between £15-17.5k as a deposit.  This will make your mortgage payment around £250 a month provided the interest rates are still the same as they are currently. Now you need to find some tenants and charge them £400 a month for rent. Tenants should also pay electricity bills and gas bills. This leaves you with £150 profit per month as a result of your real estate investing. You can either use this money for house renovations on this home, or use it to make extra payments to the mortgage. Alternatively you could save it and use it to invest in another property.

After another few years, the value of your two properties has increased further, and as a result of your £150 profit per month you have an extra £3600 in the bank plus interest. This money combined with the positive equity on your two properties will help you buy a third property. The cycle can continue until you have as many properties as you wish.

Why not make the best of cheap property prices and get started real estate investing today. You can get away with as little as £4000 or £5000 deposit when buying your first property. One property gaining equity will help you put a deposit on another property and so forth until you are a real estate tycoon.  Owning 10 rental properties could give you as much as profit per month. What should you do with this money, invest more in real estate of course.