Why stop climbing when you've already got one foot on the property ladder?
Building a £1 million investment portfolio isn't as difficult as you might think. And the good news is that you don't need one million pounds to get started. With lenders offering mortgages of up to 85% a quick calculation means that you could get started with just £150,000. However, in reality you don't even need that.
All you actually need is a 15% deposit for your first property. The secret is to retrieve your funds at the first possible opportunity and use any money from the increase in your property's value for continued investment. There are a number of ways of doing this, most traditionally through refinancing. However, you might not even need to go that far as The Money Centre has access to a variety of buy-to-let mortgages which allow increased borrowing in line with rises in market value.
If we assume that property prices increase by 5% per annum, you can double the size of your investment portfolio every four years. You simply need to increase your mortgage to reflect the property's market value and use the additional funds for further deposits.
Here's a working example: If you have £100,000 to invest in the buy-to-let market, you will be able to raise a mortgage of approximately half a million pounds. If property prices rise by 5% a year you stand to make £25,000 per annum (year on year), which is a 25% return on your initial £100,000. Invest this money in additional buy-to-let properties and you are already well on your way to owning a £1 million portfolio.
