(this post is a feed post from my comments on reddit)
r/business
I am doing something like this, but I’m in my 40s.
The first challenge is to amass a reasonable deposit, so no matter what you’re going to be working and saving to get this- fastest way to save this kind of money quickly; so high commission sales jobs.
Once you have a deposit you’ll need a mortgage, the mortgage provider will want proof of income so you will still need a job to demonstrate this. If you’re renting and buying the house to rent out then this will also be a factor.
Now let’s assume your living situation is covered- you need to rent the house out, managing a tenant Cavan be a hassle and you have to account for repairs and related expenses – in simple terms get the rent to pay the mortgage.
There are different types of mortgages – note I’m not an expert and I’m over simplifying here
Fixed interest – interest is the same for the fixed interest period – so when interest rates are low you can lock in and have a good time when interests rates raise, but you’ll be stuck high of interest rates drop
Variable rate follows the base interest rate
Mortgage term- the longer the lower the monthly repaying but the higher overall interest gets paid
Importantly in the Uk we have
Capital repayment – where both the cost of the property and the interest are repaid each month
Interest repayment – where during the period of the mortgage only the interest is paid – at the end of the term the cost of the property is finally paid as well
For ppl who are buying as a form on business (not financial advice) they generally-
1 put a deposit and buy an under valued property that needs doing up
2 they take out an interest repayment mortgage
3 racing as little time as possible they do up the property
4 they either sell at a higher cost then they bought due to the fixing up they did and replay the mortgage keeping the increase in value
5 or they rent out the rent splits between income and interest repayment on the mortgage, then when the mortgage term ends, the idea is the value of the property is higher than the capital needed to repay
In 5 the owner makes money via both the rental and the capital appreciation in the value of the property
Basically you take the rental income to amass the next deposit and repeat
But as is the case right now, there are massive risks with a mortgage of any kind since the value of the property can change over time and in the worst case be below the value the mortgage is tied to- meaning if you sell you make a loss