Funding a Real Estate Empire (For Beginners)

Written by Posted On Monday, 03 August 2015 23:56

It's one of the few things that never seem to change; real estate always seems to be in the news for the right reasons and most people fully understand just what a sound financial investment it can be.

What a lot of people don't understand is how to fund these investments. On the face of things, a property empire seems almost impossible for a lot of us with hundreds of thousands of dollars initially required. However, most of us can have access to this sort of money - and we'll now take a look at just some of the methods you can use to start funding it.

Of course, this guide isn't going to be targeting the big property investors like Steve Liefschultz , who are regularly in the news for enhancing their fortune from property. Instead, it's focused at the absolute novice, the guy or gal who has heard all the hype about real estate but just doesn't know quite where to turn to get the ball rolling.

If you happen to be that person we've just talked about, it's time to read on. Looking to start a property empire? Here are some of the ways to get started.

The traditional route

Just because you don't necessarily intend to live in the property you are looking at investing in, doesn't mean to say that you can't obtain a traditional mortgage. Most people are under the assumption that mortgages can only be sought for your primary residence - but this is not the case whatsoever.

Admittedly, it will differ between cases, but as long as you can provide a solid credit history which includes regular repayments on your existing mortgage, you will usually be perfectly fine to obtain a secondary one.

The problem for most people comes in the way that they have to now prove that their income is sufficient to cover not just one mortgage, but multiple ones.

The modern buy-to-let path

The last paragraph takes us perfectly into this next option, the buy-to-let path. This type of finance has hit the headlines over recent times, with some people suggesting that there are just too many that have been sought around the country. Nevertheless, for the time being at least, you can take advantage of this finance and fund your budding empire in the process.

In short, this is a mortgage which takes into account the income that the purchased property is going to generate. The interest rates can be a little higher, but if you are struggling to prove that your basic existing income will cover two mortgages then this is one of the most recommended routes you can take.

A private loan

Last, and probably least popular, comes in the form of the private loan. If you are in a situation where you can take advantage of an offer from a friend or relative, it goes without saying that it's probably one of the cheapest ways to take.

We're not going to speculate on the types of interest rates you'll get here, this will depend solely on your relationship with the lender. If you are struggling to get accepted for other methods of finance, this can be a worthwhile approach.

 

Rate this item
(0 votes)

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.