Property investment: all you need to know about the buying process

Rob Bence, a property investor and presenter of The Property Podcast, looks at what to expect at every step of the buying process

Buy-to-let process explained

If you’re new to property investment, you may think that finding a property and making a deal are the difficult parts and once you’ve done that it’s all plain sailing.

Unfortunately, that’s not necessarily the case.

Did you know one-third of all purchases fall through after an offer is accepted? There are so many plates spinning at the same time and if one falls, they all do.

So how can you make sure things go smoothly?

Understanding what’s expected of you at each stage of the process is a good place to start.

This is second in Rob’s buy-to-let masterclass series, head this way for the first, which looks at accidental landlords.

Build your team

Pick who to work with early on. If you’re buying a property with a mortgage you should consider a mortgage broker.

You’ll also have to appoint a solicitor once you’ve done the deal so you should have someone in mind before you do.

Compare mortgages on loveMONEY.com's comparison centre

Get them ready

If you wait until your offer has been accepted you may be in too much of a rush to find the best people for the job.

If you’re buying a non-standard property – a leasehold apartment, for example, or one with multiple tenants – it’s particularly important that you find the right people to work with so do so in good time.

If you’ve not already got a good broker and conveyancer in mind, ask other investors for recommendations.

Get a head start

There is a lot of paperwork involved in buying an investment property so do yourself a favour and see if there is any you can do in advance.

Your mortgage broker will want to conduct a fact find in order to get as much information from you to help find the best product. It’s a much better idea to do this earlier on than waiting until you’re under pressure and have to move quickly.

When you are dealing with paperwork always make sure you complete it and get it back to the relevant people quickly – especially once an offer has been accepted.

This is the time to stay switched on.

The questions you must ask before buying a home 

Find out what you’ll pay and when

Your solicitor will likely ask for some cash up front, this could be anything from a few hundred pounds to a few thousand.

If you’re buying a new build property you’ll also need to pay the reservation deposit (and there are other issues relating to new-build properties).

Ask your solicitor in advance what they’re likely to want from you and when so you can have the funds ready.

You can find out more about mortgage fees and how to minimise them here.

Be prepared for delays

OK, I’m going to say it. Conveyancers are not always the most proactive people.

Most of them will have heavy workloads and will naturally prioritise the most urgent work.

This means your documents could sit on their desk for ages.

Stay on top of them. Speak to them regularly for updates (weekly should do it, daily is probably taking it a step too far – a restraining order is the last thing you want when you’re busy buying a house!)

And be prepared that some transactions will take longer than others.

Repossessions, for example, can take a while – the seller may be unwilling to provide the necessary information, for obvious reasons and the bank may be involved which can hold things up further.

Buying tenanted properties can also take a little longer as more documents will be required, including rent statements and a tenancy agreement.

Read more: the eight myths about property investment

Work with your broker

While your solicitor will be handling all of the legal aspects of the sale, you’ll also need to be working with your broker to arrange finance.

The more information you can provide, the easier it’ll be to find the right product for you which, remember, might not necessarily be the one at the top of the best buy table.

There’ll be lots to take into account including whether or not you need to move quickly and how long you intend on keeping the property (if you’re planning on adding value, refinancing and selling on quickly a five-year fix isn’t in your best interests).

Beware of dodgy valuations

Once you have selected a product your lender of choice will want to get the property valued.

This can take time, particularly if the property is tenanted as the vendor will need to arrange access.

It’s also worth bearing in mind that valuations can be way off the mark and this can cause delays. I’ve had experiences two identical properties getting valued tens of thousands of pounds apart.

It may well be absolutely fine, but be aware of the delays a dodgy valuation can cause.

Read Rob Bence's first article on becoming an accidental landlord

Get ready to exchange

Finally, get ready to exchange and arrange a completion date. This can be same day if there is no reason to wait, but it can take a few weeks.

And breathe. You’ve made it through your first property investment as smoothly as possible and now all is calm.

Until you get the urge to do it all again that is...

Rob Bence is a buy-to-let investor and presenter of The Property Podcast. The views expressed in this article do not necessarily represent those of loveMONEY.