When it comes to finding ways to make money, real estate, and specifically buy-to-let properties, have always been at the top of the list. Buying property is something many people aim for, and even if they choose to live in it themselves and not do anything else with that property, they can still make money on their investment, for the most part.
However, if you buy a property and then rent it out, you can make the most of that investment. As long as the rental income exceeds the mortgage amount, you’ll be making a profit, and you won’t have to do very much other than general maintenance and taking care of your tenants. If you have a management company to help you, you won’t even have to do that.
With that in mind, here are some ways to raise capital for a buy-to-let investment, so you can get started on your journey as a landlord and property investor.
Sell an Existing Property
Perhaps the easiest way to buy a property is to sell the one you already own. If you already have several properties in your portfolio (or at least one, come to that), and you see there is another that you’re interested in, take a look at each of the ones you already own and calculate their profitability. It might surprise you which ones are making money and which ones aren’t. If you have any less profitable ones, selling them to fund the purchase of a new property that’s going to bring you in more income is a good idea.
In order not to miss out on a good deal, you may need to look into private money lending. With this, you borrow the money needed to purchase a property while the sale of the previous property is taking place. Once it is complete, you pay back the loan. It speeds up the process and ensures you don’t miss out.
Use Your Savings
If you have a good portfolio and you’re being careful with your money, you will hopefully have some savings set aside. These savings could be used to fund your next property purchase if you don’t intend to sell another property first.
Not everyone is comfortable with this idea. They like to leave their savings alone. Although, for the most part, it’s a good plan not to touch your savings, if you’re going to be able to increase them thanks to the new property you’re buying, it’s worth using them to fund the purchase. If you intend to use your savings, it might make you more careful about what you’re investing in, as you know you need to make back a certain amount of money.
Another way to free up money to help you buy the next property for your portfolio is to remortgage an existing property. Make sure you look at all the deals available and the interest rates you might get. Sometimes, it’s best to wait for a better deal to come along before remortgaging. Don’t forget to look at the economy as a whole as well. It should be stable and strong if you intend to make money, rather than lose it.
Remortgaging isn’t something to go into without any thought, and ideally, you should speak to an expert before you take this step. However, in the right situation, it can be exactly the right thing to do.