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How Much Do I Need To Start Investing In Property?

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Editor: Shaun Callacher

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How Much Do I Need To Start Investing In Property?

How much do I need to start investing in property? – This is a common question I get asked from people who are just looking to start out in property investing, in fact I was asked this yesterday, and hence the reason why I feel obliged to write this post! Although I would like to have a standard figure to go back with, it just isn’t that simple to answer…

The reason it is not as simple as responding with a round number is because it depends on many factors. I have listed a few below:

- Do you have a network of people you can borrow money from?

- Will you be doing lease options or another creative strategy?

- Which geographical location will you be investing in?

- What Loan to Value mortgage can you achieve?

- How comfortable are you with using debt to build your property portfolio?

All the above factors need to be considered before I can help you come up with a figure.

I started investing using none of my own money, but I worked hard networking & educating myself to find the right joint venture partners who could help with the finance (you can see a case study were I outline step by step one of my first property deals here: ). Whereas on the opposite side of the fence, I've met plenty investors who started with a large pot to play with from the beginning.

In this post I thought I would share two of the most common ways to build up your property portfolio with minimal funds & discuss the cost you will need if you are just starting out. Hopefully by sharing this, it will help you work out the maths & strategy that will work best for you to begin your property investing journey.

So let’s begin…

Strategy 1/ Momentum Investing

Momentum investing is a common approach to quickly build a buy to let portfolio. The idea of momentum property investing is to use one deposit multiple times by leveraging the banks via re-mortgaging to pull out your own initial monetary input. You can then control multiple properties each with mortgages. The aim then is for your tenants to pay enough rent to cover all the out goings (including the mortgage) and also have enough cash flow left over for yourself.

Let’s run through an example so you see how the numbers would work if you were using momentum investing;

Let’s say you agreed to purchase a property for £60,000

You purchased it using a buy to let mortgage. The typical buy to let loan to value mortgage rate currently is 75%, therefore you can borrow £45,000 (75% of £60k) towards the purchase.

You have to put a deposit, legal and survey fees in of £17,000 making the total purchase cost of £62,000; £45,000 (mortgage) + £15,000 (deposit) + £2,000 for legal and survey fees Total purchasing cost = £62,000.

You then give the property some TLC & add a new kitchen and bathroom. You have a hands on approach and help with doing lots of the work, you spend a total of £10,000 on the property to refurbish it, and to add value.

Because of the works you have now completed to the property, a chartered RICS surveyor comes around and uplifts the value of the property to £100,000.

Now because the new value of the property is £100,000 you can now re-mortgage. Your re-mortgage is once again 75% loan to value, but this time it is 75% of £100,000 (the new value of your property), therefore the money you can now borrow from the re-mortgage is £75,000.

The £75,000 borrowed from the re-mortgage allows you to pay off the initial mortgage (£45,000) plus give you your deposit (£15,000) and refurbishment cost (£10,000) back. You even pull back an extra £5,000 which covers your legal, survey & interest fees on the initial mortgage.

The final result is, you are left with a property worth £100,000 with a £75,000 mortgage on it. Your tenant pays rent which more than covers the mortgage payments, insurance, maintenance and also gives you a monthly profit.

Because of the re-mortgage you now also have your initial deposit, fees & refurbishment money back (£15,000 + £2,000 + £10,000 = £27,000) to invest into your next property.

With your £27,000 you now have back, you can repeat this process over and over until you own a number of rental properties only ever using the same £27,000 you first started with!

Momentum investing is pretty cool right!?

The initial money needed to do this strategy is the cost of a deposit, fees and refurbishment works for one house. You can then purchase, add value and re-finance over and over to carry on building your portfolio one property at a time.

Strategy 2/ Lease Options

Using lease options & creative property strategies such as rent to rent you can gain a passive income from property with very small funds. I won't go into too much detail about what rent to rent & lease options are on this post as I have wrote a whole book about the subject, which you can receive for free if you subscribe to our newsletter here:

The main point to note is by acquiring the know how to do lease options, you can make thousands of pounds in a very small amount of time with very minimal funds. & unlike momentum investing, you can acquire an unlimited amount of lease options at any one time, you are not stuck until you re-mortgage your money out.

The main cost of a lease option is the solicitors to put the legal documentation together and also any necessary works you need to carry out to the property to get it to a rentable standard. We have completed on lease options for less than £500 which now net us over £1000 per month every month.

However, the lead generation to find the lease options in the first place tend to take a lot more energy and cost compared to purchasing in a traditional way.

To understand exactly what a lease option is and to see a few example of lease options we have in our portfolio you can watch this FREE webinar my business partner Mike Howman has put together. You can watch it here: The Ultimate Guide To Rent-Rent & Rent-Buy Webinar

Other People's Money

Now even if you do use either of the two strategies above to grow your portfolio, the reality is, you still need some level of money from somewhere to start. You now have a choice to make, you can save this money up yourself or you can learn how to raise money with other people and leverage their resources. I guess the choice is yours to think which way you would prefer? When I first started in property we used both of the strategies above to grow our portfolio. We did however invest our time educating ourselves on how to do it first.


To finish this post I will leave you with a quote I particularly think is very relevant to the question ‘How much do I need to start investing in property?’ the quote is: ‘When you have no money to invest, invest your time’

What this means is: invest your time to educate yourself to work with joint venture partners and other people’s money, if you don’t have the money yourself.

What Next?

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- Would you benefit from 1v1 property mentoring? Join many of our previous students who have created financial freedom within a matter of months by working alongside us. For more information get in touch at:

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