Preparing Finances 

For all investors, the first step in purchasing a property is to have all the required finances set out. This includes setting budgets, saving the correct amount for a deposit, looking into mortgage options and making sure there is money for any legal costs and fees.

A buy-to-let mortgage requires a 25% deposit which is significantly higher than the 5-15% deposit required from owner-occupier mortgages. So, knowing what type of property to invest in and how much deposit you will need to start is important.

Suppose a person is a first-time buyer with a £25,000 cash deposit available for a property that costs £250,000. This deposit amounts to 10% of the property value. In this case, the person could consider investing the £25,000 in a buy-to-let mortgage for a property that costs £100,000, which requires a 25% deposit. 

Viewing Properties

When looking for a buy-to-let property, it is important to consider the different types of properties available that would attract tenants. Factors to consider include the number of bedrooms, accommodation type, parking availability, and projected rental income. All these factors will influence the demand for the property and ultimately affect the ROI that investors can achieve. It is important to consider the location and the local amenities that potential buyers desire, to make the property more appealing to the target audience.  Take note of what people want to buy and the features they would like in or around their homes to make the property stand out.

Speaking to Professionals 

Finding the right professionals is one of the most crucial steps in ensuring the investment goes through correctly and quickly. Industry professionals and investment consultants will be able to provide information to help first-time buyers decide and finalise their investment. Here at CityRise, we have a large team of experienced professionals who are always happy to help and support investors through their journey. First-time buyers may not always know where to start and we can guide them through the process. All investors should also consult with mortgage professionals to ensure they get the correct mortgage at the best rate. 

Exchanging Contracts

Once the solicitor receives contracts, completes the initial checks on the buyers, and receives the search results, they can start reviewing the documents. The developer’s solicitor will respond to any questions and answer all enquiries raised by the buyer’s solicitor whilst reviewing the documents. Once all enquiries have been answered satisfactorily, the contracts will be sent to the buyer to sign and return.

Once all the legal contracts are signed and returned, investors will transfer the deposit funds. Then they will also provide written authorisation that they are happy to exchange. It is crucial to start organising these funds or submit the mortgage application around 3-4 months before the practical completion of the development. Both solicitors will aim to get contracts exchanged quickly after authority has been provided.