Leverage is the term used to describe the investing of little or none of your own money, whilst borrowing the majority of the requirement, to obtain substantial financial gains. Because of the widespread availability of Buy-to-Let mortgages, investors are able to leverage their money and achieve massive percentage gains from a relatively small investment.

When purchasing property, it is normally possible to borrow money from a lending institution. The majority of lenders will advance up to 85% of an investment property’s value, therefore allowing you to build a portfolio of properties with a personal investment of as little as 15% of the total purchase price, provided of course you buy correctly.

In some cases the discount negotiated by Viceroy Invest can be used to subsidise the capital required on a buy to let mortgage. The deposit is paid for in part, or sometimes in full, by the discount offered.

This is not always possible, and is entirely dependent upon finding a willing lender, but quite often the increased value of the off plan purchase on completion will allow the incidental costs to be covered by finance based on the property’s new market value rather than actual purchase price. Sometimes even substantial cash back can be achieved.

Consider this example:

You buy a property for £100,000, using a deposit of £15,000 and borrowing the remaining £85,000. If the property increases in value by 15%, your investment increases by 100%. It doubles!

Why? The extra £15,000 is all yours because although the property has increased in value by £15,000, the amount you borrowed is still £85,000. The property is now worth £115,000: subtract the mortgage of £85,000 and you are left with £30,000. Your original investment has doubled.