The financing of property investments is very similar to the financing of any business venture – there is a basic choice initially between equity (risk capital) and debt and finance.
Equity funding means risking your own capital (your hard earned savings) or getting some other investor to risk his or her capital along with yours, and of course, share the rewards.
Debt funding means borrowing the funds in the form of a commercial loan or a mortgage. In this case, unlike equity funding, the debt has to be serviced, i.e., you need to pay interest.
We cover the ins and outs and the pros and cons of investing in property in the separate section on Investing in Property in Good Times and Bad!
Warning: Investments in property can go down as well as up in value and property can sometimes take a long time to dispose of. Never invest money in property which you may need in the short-term – invest with a long-term perspective.