Investing in real estate is regarded as one of the most secure forms of investment and can be quite lucrative if the market conditions are favourable.
Most investors use a mortgage (a loan secured against the property) to purchase investment properties. Whilst previously it was necessary to provide a 20-25% down payment on the price of a property, today loans can be secured for as little as 5%.
Some people take advantage of this to buy properties and make improvements to increase their value and then sell them for a profit; this is referred to as ‘flipping’ a property.
Purchasing a property in order to rent it to others is another approach. Ideally the rental income should at least cover mortgage repayments, if not be slightly higher. This can provide a small income and, if the house appreciates in value after a few years can provide a handsome profit.
