Assuming you as the Investor has already assessed your suitability and match with property as an investment, the entry to the market does not need to be complicated but does require diligence.
Preparation
Property investment has an element of forward preparation. This would include:
Method of Purchase
Cash or Finance (if Finance is required, then the first enquiry should be with a specialist Buy to Let Mortgage Broker, to ascertain the ability to borrow and the likely rates and costs. Seek pre-approval by completing an application – you cannot make a serious offer without this, and the offer will remain valid for 90 days in most cases)
Budget
Inclusive of Purchase cost, Mortgage and Valuation fees, legal fees, Stamp Duty Land Tax, and any refurbishment works if required
Location
This investment is not a home, and therefore care should be taken to make sure this decision is formulated primarily in the Investors head and is not driven by emotion or the heart. This is a numbers decision!
Assistance in Sourcing
If you choose, or are driven to invest in an area, outside of your known area, then professional assistance in understanding price, tenant demand, professional services close to the property is a crucial part of the Investors Due Diligence – try to work on recommendation, if possible, from a trusted source if you have one. If not, then speak to at least 3 sourcing agents before deciding your final selection.
Exit Strategy
Start with the Exit in Mind – stay away from unusual properties that may be difficult to sell in the future… Decide on your preferred Tenant Type and work to source a suitable property for ‘that’ Tenant… If you prefer to target students, remote property will not work…….. if you choose to target retirees – then city centre apartments are probably a no-go
Now you are ready to begin!
The Search
Rightmove – the go to source for all privates and professionals alike… set up search fields, get familiar with For Sale and Sold prices in your chosen area and your preferred property/tenant type – this site is user friendly and will remind you and prompt you at a frequency of your choice!
The Viewings
Found the right property in the right place around the right price? view at least twice – we see very different things on the second viewing. especially relevant to new investors. Take photographs (a few) if the current owner/tenant will allow.
Ready to Offer
Prepare your ID and proof of funds and finance – these will be required by the agent and your Solicitor, no ID/ or proof of funds – no offer can be placed, or legal file opened.
Appoint a Conveyancing Solicitor
Again recommendation is good, and familiarity is better – but low cost is not always a strong indicator of the best service – you need your Solicitor to be your legal guide not your administrator!
Act on Instructions
Try to respond swiftly to all the legal steps – show efficiency and your seller hopefully will respond with the same.
Use this Conveyancing Time
Start talking to contractors for refurbishment if needed, (the good ones are always busy!) Try to find contractors who are familiar with BTL Investments, they will offer more guidance on requirements. If you are not sure on the requirements, there are several sources of the right information – most of the people you are already dealing with, can and will help… ASK! There are never too many questions, more questions, less surprises! You have between now and Legal Completion to establish costs and financial viability – use the time wisely!
Property Management
Will you find and manage your own Tenant(s), or will you use an agent? Agents are invaluable when problems arise – they have the experience – yes, they will charge a fee but could save you £100’s if not £1000’s in the longer term.
You are ready!… Legal Completion, collect your keys, prepare the property, find your tenant, let them settle, take a breath, and go again!
