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  Category: Articles » Finance » Mortgages » Article

Buying Property with No Money Down – The Investors' Holy Grail

By Masked Investor

It's a common scenario. You're stuck in a job you hate, the bills are mounting each month, everyone around you seems to be making money hand over fist in the property and real estate markets both in the UK and abroad. You'd love to start investing too, but there's a catch – you've got no money.

Well, here's some good news. Due to the way that mortgage lenders work, the property business is pretty much the only investment that a non–professional investor can make that makes the most of gearing or leverage. Gearing and leverage are the two keys to the fast track for wealth creation. Basically, with property investment it means that you invest x amount (equivalent to say 10% of the cost of your property investment) and the bank or mortgage lender lends you a further 90%. This is called gearing or leverage. By contrast if you were to buy shares, the chances are that no bank would ever lend you the money to buy them, and you would have to spend 100% of your own money in order to purchase them.

Let's imagine you have £1000 and you buy 100 shares at £10 each. The shares go up in value by 10% during the first year. That would give you a profit of £100.

Now imagine that you used your £1000 to purchase a property and you used the gearing unique to mortgage financing. So your property would cost £10,000 (ok, it's just an example – the days of £10,000 homes in the UK are long gone!) and you'd borrow £9000 from the lender. Let's imagine that your new property rises in value by the same 10% over the first year. Suddenly, you have made a profit of £1000, that's ten times the amount you would have made using your own money to buy shares!

Ok, so with shares you don't have interest payments to keep up, but that's what Buy to Let is all about, getting your tenants rental payments to cover the cost of the interest payments on your buy to let mortgage. But the most important thing is that whilst your shares could (and it often happens) be wiped out completely in value, the chances of that happening to your property are very slim indeed.

So what about if you don't have that deposit? After all you said at the beginning of the article you could buy property with no money down?

That's right, not only can you use gearing and leverage to make more profits more quickly, you can also use the techniques of professional buy to let investors to avoid using any of your own money. Not even for a deposit. Sometimes you can even get paid to buy property! These are the techniques that property investment seminars profess to tell you, but these seminars are very expensive.

To find out more about how to buy property with no money and even get paid for doing so, follow the link at the end of this article and get a free sample copy of my book Property Seminar Secrets Revealed.
About the Author
The Masked Investor is the author of Property Seminar Secrets Revealed, which gives away all the secrets that he paid thousands to learn from seminars

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  Some other articles by Masked Investor
UK Landlords find Off Plan Buy to Let market in peril in 2007
Higher UK interest rates and a rapid rise in repossessions are on the cards again for the beginning of 2007. Has the buy to let market for property in the UK peaked? Not according ...

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