How to keep on top of paperwork and process when you invest off-plan
In our last article, we examined the mistakes that are so easy to make during the progression process. In this article, we look at the progression process for an off-plan property in a little more detail. This overview will help you understand how to move from the decision to invest, to onboarding an investment property, to getting it let successfully.
Why you need the process of progression
While the benefits of buy-to-let investment are clear, the act of purchasing an investment property is not straightforward. You need several people on your side. The road from the decision to invest in completion and beyond is full of dead-ends, wrong turns and potholes. Progression helps you negotiate all these obstacles.
The eight steps to purchasing your buy-to-let
The following points illustrate the steps you are likely to need to follow when buying off-plan or new build property:
- Find the right development in the right location.
- Arrange the appropriate finance for the purchase well in advance.
- Reserve your chosen property and pay the reservation fees (usually between £500 and £1,000).
- Arrange a surveyor’s valuation of the property, which your mortgage lender will require after an offer has been made.
- Make sure all the mortgage paperwork is complete and ready to go.
- Exchange legal contracts and pay the deposit (usually between 5% and 10%).
- Conduct a snagging survey about two weeks before final completion and check the property for any defects.
- Be ready for completion (there are usually two dates: a ‘shortstop’ and a ‘long stop’ − the former is the date by which the developers expect to have finished the building works; the latter is the date by which they must have done so).
From off-plan to your portfolio
The journey of investing in off-plan property starts with research to find the ideal location. Once you have found the property you wish to buy in the location you wish to buy in, the hard work of progression begins.
You must liaise with the developer, the builders and solicitors regularly. It is best to diarise these contacts each week. This will ensure that you don’t suffer any surprises as you progress through to the final build, snagging, and completion.
· About developers and builders
You must keep on top of the developers and builders. You’ll want to ensure that the build is on target. If there are issues, you’ll want to know about them. Make sure you know the milestones to which the development is working – this will give you a good idea as to whether the development is steaming ahead of schedule or lagging. This is going to be important later in the progression timeline.
Paperwork and solicitors go hand in hand. As you do with the developer, you should liaise with your solicitor to make sure all the paperwork is in order. If there is anything that you don’t quite understand (and there is likely to be – the investor who understands every word of legal jargon is a rare and talented creature), you must have it explained in plain English.
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As you progress toward completion, you must ensure that all necessary searches have been conducted satisfactorily.
· Mortgage brokers
Don’t make the mistake of approaching your bank or other lenders direct. A qualified and experienced mortgage broker will do all the hard yards of finance discovery for you. They will make sure that your buy-to-let mortgage is the best for you – considering your objectives, finances, tax position, and lender policies, as well as current regulations.
As you move toward completion
Nearing completion, progression heats up:
- You must ensure that everyone is on the same page and that solicitors and mortgage brokers are working diligently.
- Snagging must be done, and remedial work organised and undertaken.
- You will need to pay stamp duty to the Inland Revenue.
- Your property will need to be registered with the Land Registry.
- You will need to ensure that your lender receives copies of the title deeds.
Now, you must get the property let
It’s called buy-to-let for a reason. You have now bought the property. It’s time to let it. This means you must:
- Market your property
- Vet potential tenants
- Conduct inspections and inventories
- Collect rent
- Administer maintenance and repairs
If you decide to manage the property yourself, all these tasks (and more) are yours to complete. Managing your property is not easy, especially if you have no experience. Thus, most buy-to-let investors take advantage of professional investment property management.
When you employ property managers, they can do all the daily landlord tasks for you, leaving you to enjoy your free time and focus on finding your next property investment opportunity.
How we help property investors with progression
A long time ago we decided that we didn’t like how the complexity and stress of buy-to-let investing were stopping so many people realising the benefits of investing in a new build with the discounts we are able to negotiate from off-plan developers. Thus, we put in place a progression process.
You benefit from our years of experience of investing in and managing property, with a dedicated team working on your behalf. We’ll smooth out all the wrinkles, keep the whole process on track, and make sure that your buy-to-let property produces to its full potential from day one.
From before completion, Ezytrac’s property management services will be at your disposal. We’ll be on hand to offer advice and support whenever it is needed. We’ll provide tried-and-tested, watertight tenancy agreements. Rents collected will be in your account within 24 hours of appearing in our bank account. And our property investment and management experts will be at your disposal to discuss strategy, review your portfolio, and research your property’s value.
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