What is the Buying Process For Buy to Let?
So, you’ve thought long and hard about buying an investment property, you’ve done your research and found out about the best cities and areas for buy to let, and have found an investment opportunity that you’re interested in. Now what?
There are so many steps to buying a first investment property. For both first-time investors and experienced landlords alike, buying a new investment property can be a confusing process, especially if you’re investing directly with a property investment company.
To help you understand the property investment process a little better and know what to expect, we’ve put together this buy to let step by step guide with information on the buying process for property investment.
If you’re looking to find out more about the different steps to buying your first investment property, or you’re unfamiliar with the buy to let investment process and want some information, keep reading for our step-by-step summary.
Step 1 – Enquiring
When you’re looking to invest with a property investment company, the first step will be to enquire about the current opportunities available.
Contact the company listing the property you’re interested in and register your interest in the opportunity. This could be done with an email, a phone call, or even by interacting with an online chat system. This is the best way to get the ball rolling for your purchase.
Step 2 – Selecting Your Unit
Once you’ve been able to get in touch with the company and enquire about the development you’re interested in, the next step will be to select your perfect unit. When investing in a property development, the unit means the specific apartment you’d like to purchase.
The property consultant you speak to will be able to help you select your ideal unit by finding out more about your budget, goals, and criteria.
If you’re set on investing in an apartment with a balcony, for instance, this is the part of the property investment process where you’ll be able to find a unit that ticks this box.
During this stage, you may be invited to a meeting or property viewing to find out more about your investment options and take a tour of the property site or view showrooms. This can also be done virtually using virtual tours and remote video chat functions.
Step 3 – Reserve Your Unit
Once you’ve found an investment opportunity that you’re ready to purchase, you’ll reach the reservation stage.
During this stage, you will usually need to pay a deposit for the particular unit you’re interested in and complete a reservation form.
As soon as your online reservation form is completed and signed and your deposit is paid, you will receive a copy of the completed form, along with a receipt for your deposit via email.
Step 4 – Get a Solicitor
You’ll now begin the legal side of your property purchase, which involves obtaining a solicitor. If you’re working with a property investment company, you’ll usually receive recommendations on solicitors you could work with.
Using a recommended solicitor is advisable as they will have already been briefed on the project in question and will have experience dealing with clients purchasing units in the same development. You may also get access to discounted legal fees.
Whether or not you choose to use the solicitor recommended by your property investment company, you should contact your desired solicitor as soon as possible.
The instructed solicitor will contact you with information on the documents they need from you to proceed with the purchase.
Step 5 – Provide Documents
To comply with the Money Laundering Regulations, the solicitor will ask you for proof of your identity. In most cases, they will accept:
- A Certified True Copy of your passport or photographic driving license.
- A Certified True Copy of a bank statement from the account where the purchase funds will be transferred from.
- Proof of Residency, such as a utility bill dated within three months.
Step 6 – Arrange a Buy to Let Mortgage (If Applicable)
You may not choose to pay for your investment property with the help of a buy to let mortgage, but if you do, you’ll need to make sure to let your mortgage advisor know that you’ve had an offer accepted on a property.
The mortgage advisor will then get the ball rolling with your mortgage lender, who will likely ask for details of your solicitor.
Step 7 – Get a Survey
If you wish to get a survey completed for your property, this is usually the time you would do so. If you’ve arranged to use a buy to let mortgage, your mortgage lender will normally undertake a valuation survey of the property.
If you choose to get a survey of your own done, this will most likely be a full building survey or a HomeBuyer report. These types of surveys are often only applicable if you’re investing in an old property such as a listed building or one that needs a lot of renovation work.
If you’re investing in a new build or off-plan property, a survey of this nature is most likely not applicable.
Step 8 – Signing Your Contract
Once you have supplied the necessary documents, your solicitor will provide you with a copy of your purchase contract, leasehold agreement, and other relevant supporting documents.
You will be required to review these documents and sign where relevant before sending them back to your solicitor. It is always beneficial to send scanned copies instead of posting these documents, as this will save you postal costs and be more time-efficient.
Your solicitor will also issue you with a Completion Statement detailing the amount required from you as the purchaser to exchange and/ or complete your purchase. They will also confirm the necessary bank details to transfer to.
Step 9 – Exchange and Complete Your Purchase
Once you’ve followed through on the previous steps to buying your first investment property, you will have reached the final stage of the buying process!
When your solicitor has received all the funds in their client account, they will confirm receipt and contact you to confirm your authorisation to exchange and/ or complete on your purchase.
Following receipt of authorisation from you as the purchaser to proceed to exchange, they will contact the seller’s solicitor and advise that they are ready to exchange contracts and transfer the exchange funds to the seller’s solicitor.
Once your purchase has been completed, your solicitor will contact you to confirm the exchange and/or completion of your purchase. They will send you the original copy of the contracts and agreements that they will have received countersigned from the seller’s solicitor.
They will then use these documents to register you with the Land Registry as the legal owner of the property.
Step 10 – You’ve Purchased Your Investment Property!
If you reach this stage of the buy to let step by step process for investing in property, you officially own an investment property. Congratulations!
Following completion, the company you invested with is usually available to offer guidance and respond to any issues you may be having with your investment.
If you decide to use a rental management company to find tenants and manage the day-to-day tasks involved with your property, this is the stage of the property investment process that you would get this arranged.
Begin the Property Investment Process With RWinvest
We hope you’ve found our steps to buying your first investment property useful. When it comes to buy to let, this step-by-step guide will hopefully have given you a better idea of what to expect from the different stages of property investment.
If you’re now feeling ready to make your first purchase and begin the property investment process yourself, get in touch with RWinvest today. We can offer further guidance on the different stages of investing in property and help you find your perfect buy to let opportunity.
Currently offering properties with up to 55% below market value prices and up to 8% rental yields, you’re sure to find your ideal UK property investment with RWinvest.