Property Go-To Girl’s Checklist for Purchasing a Buy-to-Let Investment

Email: Jacquie@PropertyGoToGirl.co.uk Facebook Twitter: @PropertyGoToGrl

PLANNING & RESEARCH

How much money do you have available and how long can you keep it invested?

Do you want to purchase a property with cash or purchase with a mortgage?

Note: A buy-to-let mortgage generally requires a 25% deposit

Ensure you have a sufficient cash buffer available (this can be through credit cards or available credit

limits).

What are the minimum Yield and Return on Investment (ROI) that you need?

Yield = annual rental income / total property cost

Return on Investment = annual rental profit / actual cash spent on property

This tells you how long it will take to recover the cash you put into the property. I like to

compare this to the interest rate I would receive from a bank. We generally recommend 6% or

more ROI for property investments.

Understand all the costs of a property. For example:

If you will need external finance - talk to a mortgage broker and organize a buy-to-let mortgage by

obtaining a decision in principle or line-up other financing if necessary.

Determine your rental strategy / market.

Ensure you are investing in an area of high rental demand for your market and strategy.

Close to public transit?

Is parking available?

Is there a university or employers nearby?

Is the area convenient for shops and restaurants?

Is there heavy traffic or significant noise?

Is it an area of redevelopment or planned growth?

Understand the achievable and realistic market rents for your target area and tenants.

You should always invest for monthly cash flow. While it is expected that property prices will go up in

the long-term – in order to ensure your investment pays – you should invest as if property prices will

never increase again.

FINDING THE PROPERTY

View as many properties as possible and ensure that you understand the housing market in your area along

with current house values. We recommend viewing and comparing at least 15 – 20 properties in your

target area.

As a property investor you make your profit when you buy not when you sell.

Compare properties based on Yields and ROI. And – unless your target market is people exactly like you –

remember that you will not be living in this property so it doesn’t need to meet your living standards.

Understand any refurbishments necessary to bring the property to lettable condition and achieve the best

rental amounts.

Know your exit strategy before you buy (and have more than one).

Make offers on all suitable properties based on calculations of your required yield and ROI.

Asking price is just a suggestion. Don’t be afraid to offer significantly below asking price. Again - as a

property investor you make your profit when you buy not when you sell.

Once your offer has been accepted engage a solicitor and ensure a full survey and searches performed

prior to purchase.

Finalize your financing with your mortgage broker.

SETTING UP THE PROPERTY

Obtain required certifications & licenses, such as: Gas Safety Certificate, Energy Performance Certificate

(EPC), Portable Appliance Testing (PAT), HMO License (House in Multiple Occupation).

Find tenants

Ensure appropriate credit and reference checks are done

Use the proper Assured Shorthold Tenancy Agreements

Lodge any deposits with a tenancy deposit scheme

These are the basic steps in buying an investment property. This is a high-level representation and does not identify

all branches of the process or the inherent risks of the process. Finding the perfect investment property takes a

significant investment of time.

If you don’t have time to view dozens of properties and run multiple calculations -or- if you are new to investing

please contact us to see how we can use our time, experience and knowledge to find you the perfect investment

property. This will save you time, money and can increase your profits.

Deposit

Mortgage Payments

Stamp Duty

Insurance

Maintenance

Service Charges

Council tax and bills

Letting agent fees

Management fee

Single let Multi-let /

HMO

LHA / DSS Students Professionals