If you want to grow your wealth, investing is usually a much better option than trying to accumulate interest in your savings account. Growing your savings can be done passively, but it requires an active approach if you want to make a significant amount of money from it. Because of this another option is to educate yourself on how to make investments on things such as property.
Unfortunately, many property investments involve buying property and selling it at a higher price. This can require hundreds and thousands in savings before you even consider it. However, there are a couple of ways for you to get started on the property ladder if you’re willing to put your head down and work for it.
Consider buy-to-let options
Buy-to-let essentially means taking out a mortgage to purchase a home that you’ll be renting out to other people. However, this isn’t necessarily a form of passive income. Instead, you’ll officially be known as a landlord and you’ll have to take on some responsibilities such as repairing the home (or getting contractors to do it) and finding tenants. Depending on your buy-to-let investment, some of these services may be handled for you. However, you should know that the less work you have to do, the less money you’re going to make from it. It’s important to learn how to become a good landlord so that your tenants are more likely to stay and cooperate with you.
You can also consider a holiday let mortgage if you’re not interested in becoming a full-time landlord. This works similarly to a regular buy-to-let investment, but you’ll be paying for a home that is usually rented out to people for a short period of time for their holiday or a weekend break. Think of it as something similar to operating an Airbnb property.
Property development can mean a lot of things, but in the context of a low-budget investment, it often means taking on homes that require a lot of work and renovating them to a much better standard. It’s then sold off for a much higher price.
This sounds simple in theory but it does require you to buy a run-down property. These are few and far between because there are many people who are interested in practising their property development skills. Auctions can be a good place to find cheap properties to renovate, but you’re going to be bidding against other serious developers that have a much higher budget than you.
Property crowdfunding essentially means investing your money into a pool of funds that is managed by a company or individual that uses it for property development and investment. In return, you get a small share depending on how much you’ve invested.
This is essentially a passive way to generate equity, but you need to stick with it for a long period of time before you’ll be able to see any results. It can be an attractive option to get started in property investment, but it requires a lot of research to make it work.