Investing in property is still the safest vehicle around in terms of building a positive and solid portfolio. This is the major reason why so many passive investors and institutions are happy to lend against it.
Getting a bank loan may be a bit trickier these days, but if the application is to buy property and not invest in shares, then you’ll have a much greater chance of securing the loan. These third parties are one of the main reasons we make money from such an investment, demonstrating the real power of property.
Invest £30,000 in stocks and shares, and you instantly have £30,000 worth of assets at your disposal. If the market you’ve invested in increases by 10 per cent, then you get a £3,000 return. In short, this is a 10 per cent return on capital.
If you were to use the same £30,000 for deposits of 25 per cent on buy to let properties, this will give you £120,000 in asset value. Let’s say the market then suddenly increases by 10 per cent? Well in this case you’ll make £12,000, as you’re not just getting profit from your own money, but also gaining profit on the banks money.
This is what investors call leverage, a priceless tool with a view to giving you a solid foot hold on the property investment ladder. It’s a bit like the zoom tool on your PC, in the sense, when it zooms in or the market moves to your advantage, then this leverage can make your returns much bigger and clearer.
Of course this can sometimes work the other way, which is why you must ensure adequate profit margins are built into your investment model. This means getting the best advice and also having the opportunity of putting money into the strongest investments.
First Property can certainly help do this by opening up the doors to wealth circles previously kept very private. Having leveraged passive monthly income exceed personal expenditure, has to be an investors dream. We can help those dreams come true with realistic yields and first class support from the experts in our team.
Leveraging as high as possible can produce great results, but only with the right advice and the best quality research you’ll find at First Property. Using this tool can help you build a hard-working and profitable portfolio.