August 11, 2021

The 8 simple steps of investing in property for the first time

The 8 simple steps of investing in property for the first time

Prosperity are a market leading developer and investment consultancy that help clients build wealth through property. We know investing in property for the first time can be daunting, so we’ve put together the following summary which offers first time investors a complete step by step overview of what to expect throughout a property purchase process: 

1. Budgeting and Payment Plan Assessment 

Prosperity’s unique Pay Monthly Plan allows you to build your buy-to-let deposit during the construction period. The first step for any potential investor is to assess their income versus expenses and decide what monthly instalment amount is viable and sustainable. With property options starting from as little as £1,400, we will assist you with you in establishing a budget and a portfolio growth plan. 

2. Location and Property Selection 

Once you have a budget in mind for investing in property for the first time, we will move on to discussing development locations and property types. All of our projects have been carefully chosen to capitalise on high rental demand and price growth potential. Your consultant will assist you in reviewing the investment case for each region, city specific location, development, and unit type. 

3. Reservation Process

When you have selected a specific property that fits your budget and will meet your objectives, the next step is complete a Reservation Form to ‘hold’ the unit. This form provides us with your contact and address information, and confirms the sales details of the property. At this stage you will be required to provide copies of your I.D. and Proof of Address. 

With a satisfactory Reservation Form returned, you will then receive a Welcome Pack. This provides a detailed summary of the specifics of your chosen plot, as well as a breakdown of your Payment Plan. You will then be invited to place the 5% Reservation Deposit (5% of the property purchase price) + a one off £850 payment for your solicitor costs. You will also be invited to create a Standing Order for the monthly instalments that will form your deposit payment plan. 

4. Legal Exchange

We have a recommended Client solicitor partner which will help you when investing in property for the first time. This is an independent solicitor that will represent you in the purchase. We advise clients to use this solicitor as they are a reputable firm and they will be familiar with the details of the development in question. You will also be part of a group of buyers which means you will be a priority for the office, as opposed to a lone transaction. 

Clients should be prepared to complete the Anti Money Laundering (AML) checks. This is a simple process that provides proof of the origin of funds. This is a government mandated requirement. You will be asked to provide bank statements verifying the source of your income. Again, this is standard for all buyers and is part of buying property in the UK. 

Exchange refers to the ‘exchange’ of Contracts. At this point the Vendor (the Developer) agrees to sell the particular plot for the agreed price and terms, and the Buyer agrees to commit to purchasing said plot. 

Exchange of Contracts provides you with legal protections, such as a commitment by the developer to deliver the property within a specific time frame. It also means your financial interest in that property is noted at the Land Registry. 

All of the above can be executed remotely by international buyers. You do not need to visit the UK to exchange contacts. Your solicitor will be on hand to help you with any queries you may have throughout this process of investing in property for the first time. 

5. Payment Plan & Construction Updates

You will have started making monthly instalment payments from the point of Reservation. Prosperity will keep you updated throughout the build process by providing photographs, site videos, and a summary of works. Quarterly Updates will ensure you are able to stay fully informed. If you ever have a query about the status of construction or your Payment Plan, your Consultant will remain on hand as a constant point of contact. 

6. Legal and Financial Completion 

Our Completions Team will be in touch 5-6 months before your property is finished to guide you through the conclusion of investing in property for the first time. There are essentially three parts to consider. The practical completion – a ‘snagging’ review and the handover of your property. The financial completion – ensuring your are positioned to transfer cash or secure a buy-to-let mortgage. The legal completion – final signing of Contracts. 

Prosperity have expert advisers to assist you with all aspects of your completion. We have built a suite of tools that allows our overseas buyers to complete their purchases with confidence. Every apartment is meticulously inspected and a full video tour of each unit is provided. The end result will be a seamless handover from developer to buyer to tenant. 

7. Lettings Management 

High quality rental management is a vital component of buy-to-let investment, and can make thins especially easy for you especially when investing in property for the first time. It is essential that your property is well marketed, well maintained, and well administered. To ensure quality of service we established Lamont & Co, an independent sister company of Prosperity Wealth and Developments. With nearly one thousand units under management this experienced team are specialists in managing properties of BTL and international owners. Their online portal means owners have complete oversight of the status of their rental income and the condition of their property. 

Of course you are welcome to shop the local lettings market but the vast majority of our clients choose to use the services of Lamont & Co. for rental management.

8. Portfolio Expansion 

Prosperity’s unique pay monthly deposit builder plan means that many of our investor clients are repeat customers. They are often seeking to establish a portfolio for retirement, and the flexibility of the payment plan means they can secure a new buy-to-let property every two to three years. 

Prosperity have create a private client service, Privé, to assist buyers in establishing portfolios. We have relationships with specialist tax, accounting, and estate planning advisors. These partners can assist you in ensuring your portfolio is set up and operating in the most efficient manner possible. 

Privé members also have exclusive priority access to development launches, sophisticated products, and concierge standard service.