5 Steps to Buying Your First U.K Investment Property

 


It might be challenging to start out in real estate if you are a first-time buyer. Here is a detailed strategy.


through Samuel Leeds 25 August 2021


Contributors to Entrepreneur are free to share their own opinions.


So you’ve found a wonderful property deal, and you’re thinking to yourself, "Great. What would be the ABCs of purchasing this?" Most likely, you discovered the property on the website of an estate agent or a property platform. You've already seen the property. You have completed all the calculations and are aware of the ROI (ROI). You've used my advice to "Buy low, rent high, and have a property manager close by."



All you still require is a step-by-step manual for purchasing your first investment property. This is it.



1: Hire a mortgage broker 

You'll require what's referred to as a decision in principle (DIP). This shows you what a lender is prepared to provide you. It's not a credit offer because it wouldn't be possible without conducting extensive checks first. Obtaining a DIP is crucial because after an estate agent accepts an offer, you will need one.


Your personal-income criteria will be lower if you purchase a buy-to-let property than if you were purchasing a home for your own use. Due to the fact that you are renting the property, it should be able to support itself. In many circumstances, lenders are more concerned with the property's cash flow than they are with your income. Naturally, many high-street banks will continue to have strict personal-income restrictions, so you'll need an impartial mortgage broker who can shop around for you among all the lenders.


By seeking referrals from other real estate investors, you can locate reputable independent mortgage brokers. Ask on Facebook groups for real estate investment if you don't know any. It should be simple to obtain a decision in principle by calling a reputable mortgage broker and speaking with them for no more than 15 minutes.


2. Hire a lawyer


You now require a lawyer. Since I've found that most solicitors are either incredibly slow or completely inactive, you should also get recommendations for this. Having saying that, don't let this stop you. Only choose a lawyer who is "excellent enough" so that you have something to say to the estate agent when your offer is accepted. Don't worry too much about this stage because you don't have to retain the same lawyer forever.


Keep hold of an excellent lawyer once you discover one. The person resembles gold dust. Pay your lawyer generously for his or her services and treat them with respect.


3. Make a proposal


You must ascertain what the other side is willing to accept before making an offer. It can be challenging to discuss this with a real estate agent because you'll be told that they'll simply forward your offer to the seller. Although this is true, an estate agent typically has some sense of what the seller would agree to. To start, you could say something like, "I'm curious. I enjoy the home. I don't want to make a very cheeky offer, but as an investor, I am hoping to negotiate a little bit. What could they consent to?


The estate agent may occasionally indicate the kind of offer that might be accepted; alternatively, he or she may just instruct you to submit your offer. Start embarrassingly low if the estate agent is unable to offer you a range. Don't forget that you're seeking to purchase an investment property, not your next home; if someone else makes a higher offer, that's fine.


4. Complete the documentation


Five things must be provided to the estate agent as soon as the offer is approved. You should prepare these in advance:


1. A driver's licence or passport with a photo.

2. Address proof (for example, a council-tax bill, maybe a utility bill or a bank statement that shows your address in the last three months).


3. Your financial proof. This figure represents the deposit. A screenshot of your bank account is available. Your name and an amount equal to or greater than the required deposit must be shown on it.

4. An agreement from a mortgage broker in principle

5. Information about your attorney.


5. Wait


The estate agency will remove the property from the market once they have those from you. Your mortgage broker and lawyer will communicate with the estate agent on your behalf. Every two weeks or so, you should check in and inquire about whether there is anything you can do to expedite the process. Even if you believe they are not acting quickly enough, be kind and helpful.


When they put the ball in your court and ask you to take action, act quickly. You must exercise patience while the game is in their favour. If you don't maintain a professional demeanour at all times and are patient, kind, and pleasant, you will be the one who loses out on developing long-lasting business partnerships.

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