That’s progress you’re feeling because we’re creeping up to the halfway point of The Journey, our six-part blog series that aims to take you from absolute beginner to real life buy-to-let property investor with our help every step of the way!
If you’ve followed along from the start you’ll know that part one focused on getting organised (you can access it here) and part two (accessible here) focused on the property hunt.
Now, with our target investment property in mind, we’re going to journey through the buying process, from start to finish…
Picking Your Investment Property
In reality it’s more like a dark art where experience and know-how play major roles in the likelihood of future success.
There are so many elements and factors to consider when choosing your target property and that’s why we dedicated the entirety of part two of The Journey on this very subject. If you haven’t read it, and are interested in conducting a proper property hunt, you can check it out here!
After you’ve picked your target property it’s time for action!
Organise a Mortgage
With this in mind we would highly recommend that you have some awareness of what buy-to-let mortgages are available before you begin any specific buying.
Be aware that buy-to-let mortgages are more expensive and generally require higher deposits. These deposits can be anywhere from 25-40% for the best deals. Generally speaking your typical buy to let mortgage would requires a 25% deposit, other fees include a brokers fees of approximately £500, stamp duty of at least 3% depending on purchase price plus legal fees of approximately £1000.
It is important to be aware of theses further costing when calculating your numbers to ensure the property in question is a good investment.
If you are considering building a buy to let portfolio it is vital that you get the right advice from a financial advisor who understands your vision and what you want to achieve (ideally an advisor who invests in property investor themselves). This is because there is a process to follow in obtaining and maximising the availability of mortgages.
It is very important that you understand the numbers and that your property will cash flow. We recommend that you aim for £200 per calendar month (Expenses less Rental Income = Cash Flow).
If everything still adds up then get ready to move forward.
Engage Your Property Power Team
Engaging with your property power team can be seriously beneficial in identifying issues or opportunities you might have missed.
By discussing your potential deal with your power team members, which may include your solicitor, accountant, broker and building contractor. They may help you identify that the deal isn’t viable, or, on the other hand, the potential you may achieve if you purchase and obtain this property.
There could be years of property knowledge and experience all around you, utilise it.
Making the Right Offer
You’ve inched forward, from getting started to finding the right deal, and now you’re ready to make an offer. Congratulations but don’t get too excited.
This isn’t your dream home, it’s a property investment so don’t dive in at the deep end and offer the asking price straight away, and don’t buy on emotion. Making the right offer means making the right offer for YOU.
To do this, consider your calculations (mentioned above) in relation to your mortgage repayments as well as factoring other elements into the equation.
Analyse what might drive the price up or down and move accordingly.
Plan for all Eventualities
Deals fall through, sellers change their minds and properties come and go so don’t let any of the above impact on your decision-making.
After you’ve calculated your figures, identified the opportunities and possible obstacles that may present itself and ensure all avenues are explored. Proceed with your offer and sale process. If it doesn’t happen, simply begin the property search again. Be undertaking the process and learning from it you will learn so much from the process and will become a competent buy to let investor.
Until Next Time...
To truly get going you need to get your hands dirty and get out there into the big bad world. It’s not as scary as it sounds!
For property networking we would highly recommend our very own Belfast Property Meet event. We might be biased but we recently celebrated our 6th birthday, no small feat in the events world, and have an incredible, engaged community that would be happy to talk to you, share stories, swap strategies and advise where possible. You can check out the monthly events, and more information, by clicking here.
On the other side, if you don’t live in Northern Ireland or the Republic of Ireland and don’t fancy travelling to Belfast Property Meet, you could check out our Property Success University by clicking here. PSU offers in-depth coaching and guidance that actually drives your property investing forward to achieve tangible results and we’d be happy to have you.
Next time on The Journey, as we begin to see the finish line in sight, we’ll look at how to “add value” to your newly purchased investment property.
See you then!