Frequently Asked Questions
Why should anyone use a property finder.
First and foremost we are property investors in our own right. Generally property finders will have several years experience in the field and most importantly have the right contacts.Someone new to property investing will need guidance and some degree of mentoring. It can be a scary world out there and without the right advice, expensive.
What does it cost to use Buy Property to Let ?
We make a 2% charge of the gross price of the property. This covers our costs in finding the property and guiding you through the buying process.
Why should I pay when I could approach the builder directly?
Probably because we can negotiate bigger discounts than an individual. If you were to approach a builder you may be offered 5 to 10%. We aim at 18% minimum with 20% being the mean. Given a normal buy to let mortgage of 85% loan to value that will give you 3% back, minimum, to offset your buying costs and our fees.
Who are Buy Property to Let ?
There are two partners. Tony Lee with an accounting background and Brian Baggarley who has been associated with building for most of his working life.
Are the discounts being offered genuine?
Before we offer the property to an investor we do what is called due diligence. We check property valuations and rentals in the local area. It is vital to appraise each property to avoid disappointment and down valuations as the buying process gets underway.
It is in everyones interests to establish the true value of the property. Lenders will appoint a chartered surveyor to assess the property value prior to making a mortgage offer. If the value is wrong you will have to find more cash to make up the difference to enable the deal to proceed.
How much money will I require?
Much is made of no money down deals. The reality is that you will always need some capital prior to starting the purchase. As a minimum you will need to find a reservation fee to the builder of about £1000, a valuation fee normally £400 and our finders fee of 2%. In addition your solicitor may require a deposit to pay for local searches etc.
On completion of the purchase you will have to consider stamp duty where applicable, the balance of your solicitors fees including Land registry fees. There may be a brokers charge. Finally you will need cash to pay for carpets and curtains and mortgage payments before the property is let.Remember with a substantial discount negotiated by Buy Property to Let some or all of these costs will be covered.
Is it easy to get a buy to let mortgage.
Normally the answer is yes. We generally say if you are earning over £25,000 with a clean credit history you would normally qualify for a mortgage. Most lenders will offer 85% of the value of the property and secure the loan against the property. Small problems with your credit history will not necessarily preclude from a mortgage offer but the rate may be higher.
I am self employed. I find it difficult to prove my earnings.
Lenders will allow you to self certify your earnings. This is where our specialist broker can help.
Can I use my own solicitor when investing in property?
The short answer is no. We pass you onto specialist solicitors able to work to the short timescales demanded by builders. The same applies to our nominated broker. We are not paid any fees by these professionals but have used them in many deals and know that they are reliable.
Are my fees refundable if I choose not to proceed?
Your finders fee may be refundable if the deal collapses through no fault of your own. Merely changing your mind is insufficient reason for a refund. You will have to bear in mind the tight time scale we have to work too and the possibility that we will not be able to find another buyer within the time left. We have the right to expect payment for the work and deals we find.Your reservation fee payable to the builder is not refundable.Your valuation fee, if the survey has yet to be completed is refundable.If you are uncertain please ask.
Are there any other costs?
Not normally from a buying perspective, but you will be liable for a service charge and ground rent on leasehold properties along with contents insurance. On freehold properties a building and contents insurance is required.You will normally get a waiver of council tax for up to 6 months whilst you let the property and between lets. Your lettings agent, should you choose to use one, will keep you posted on any interim bills that need paying.
What do lettings agents charge?
Anywhere from 5 to 12% depending on the level of service and how involved you want to be. We would advise you opt for a full management service and leave it to the professionals.
Should I furnish the Property?
Generally we would advise against furniture. Your next tenant may not need it and that will leave you with a storage headache. In addition it will cost you some £2000+ to furnish a 2 bedroomed property.It is unlikely that you will be able to increase the rent to pay for the furniture during the term of the let.
What should I provide?
We suggest carpets and curtains. Your letting agents should be able to give you details of local companies.
One other area is white goods. Not all builders supply these. Generally you will get a built in over, hob and extractor hood. The decision to supply washer/dryer, dishwasher and fridge freezer is very much down to you. We suggest renting these and can supply name and address of a suitable supplier.
When investing in property, Is now the right time?
It is not really down to the right time but what is right for you. Property is a medium term investment. You should be looking at a minimum of 5 years before you sell or remortgage.Property has doubled in valued every 8 years since the last war. Provided your rent covers the mortgage payments you have an appreciating asset being paid for by someone else.