We Make the Investing Process as Simple as Possible

THE PROCESS

1. Choose your investment

We normally keep all our investors updated on current projects. Cities like London, Cambridge and Birmingham are off-plan new builds which are our most popular investment class as they offer capital growth during the build period. All properties offer yields, capital growth and are close to transport hubs, perfect for tenants. As part of our due diligence we make sure that all properties are fully managed upon completion. We also insist that these properties fall within regeneration zones of large towns and cities.

2.Reservation

After you have read through the Due Diligence, brochures and Cash Flow Analysis and have made your decision, we will email an initial reservation form  from the developer for you to complete.

The developer will  require your buying entity (personal, company or partnership, for example) and your contact details. Our advice is to keep it simple. The more complicated it becomes with trusts and non-standard structures, the more the costly and complex it can become to operate.  As per FICA (Financial Intelligence Act) you are required to have a UK bank account  (offshore is fine) and complete the UK Money Laundering Act form. The account is also necessary as a rental deposit account. A UK Limited company is very easy and quick to set up, however our accounting firm will be happy to assist should you wish. You will also need to pay the Deposit at this stage; normally to the developers solicitors

3. Legal Process Begins

We can introduce you to a solicitor or you are welcome to instruct your own. We use a variety of solicitors depending on the exact needs.  Their fees are highly competitive and they will look after you and your interests during the process of purchasing. They will mail you a client acceptance form, which you will need to sign and return to them via email.

There are also two contractual steps to buying.

The first is what the attorneys call “exchange of contracts”. This is when the seller’s attorney sends through the purchase contract and the report on the property. Your solicitors will go through the contract in great detail on your behalf, and will undertake a legal Due Diligence. Once you are happy with the contract report, the two attorneys will then exchange contracts. At this point, you are legally bound to buy the property and the developer is legally obligated to complete the build. The second step occurs only once the property is fully built and key ready and  a mortgage (if applicable) has been granted. upgraded. You will pay the remainder and “complete” on your investment. This is the day you get the key! (See below)

4. Property Development

If construction and refurbishment work must be done (which is 90% of the time) then the developer will complete this within a certain time period. Once it is complete and has received building and council inspectors’ approval, the two attorneys will legally complete on the flat. The unit then becomes your property. You will receive your title deeds approximately two months later. The solicitors will send you a copy and keep the originals in their office safely.

5. Rentals

The rental company you use will be dependent on where you have invested in your property.  All our developers have management teams in place to tenant and look after the properties.
Once a tenant has been approved you will receive the lease to sign. The first rental cheque should be paid a month or so after that.

Initial tenanting costs include the finders fees for the tenant, the 10% that the rental agent charges each month to collect the rent and the landlords license (if applicable – see point 6).

Please also remember that the tenant ordinarily pays water, gas and electricity as well as council taxes. However if your unit stands open for a period of time then you are liable for the council tax.

Rentals are not taken on by calendar month. They start at any day of the month and will be paid out pro rata around the 10th of each month. Escalation on rent is also very low each year. It normally increases according to inflation or when your tenant vacates and the new market level of rent clicks in.

6. Licensing

In certain areas of the UK, you will require a landlord license which lasts 5 years and costs approximately £400- £ 650. The license is set up by the local council to regulate the buy-to-let market. As mentioned earlier, the license amount is included in the cash flows. (if applicable).

7. Non Residents Landlord Exemption

If you are not based in the UK you will need to register as a Non Resident Landlord so that you are not taxed at the point of rental collection. This will only apply if you purchase in your own name. If you purchase in a limited company then it is run like a company. We have an independent accounting company that we can recommend should you need accounting advice. They are excellent and we use them for both our personal and business accounting needs.

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OUR INVESTING FORMULA

We follow the “LEARN” process. It keeps your strategy simple and focused

L-E-A-R-N

1. L for Location

Always invest in areas of regeneration which are close to transport and in neighbourhoods with many job opportunities. You can source this information from the local councils as well as general UK press articles, or by following a developer who specialises in regeneration.

Transport programmes like the new high-speed rail HS2 line linking the north to the UK south is already having a positive capital growth impact on these regions. Tenants want easy links to both work and main capital which will make your investment far easier to rent.

2. E for Entity

Your major financial challenge is tax on rentals but there are ways to save money through buying the right way. For example, acquiring the property in the correct entity like a limited company will not only reduce tax liabilities but will also offer a great method of developing your portfolio over time.

The general rule of thumb owing to the annual costs is if you are simply buying one property then keep it in your name, for more than two then look at a separate legal entity like a company. Limited companies also assist with inheritance planning strategies as well.

3. A for Add

Add value by either buying old and renovating or getting in early in new off-plan schemes before they become available to mainstream emotional buyers. Long-distance renovation can prove troublesome, so that’s why new builds are very popular with overseas buyers. Early purchase in developments that still need to be built adds capital growth immediately. If you combine this with buying in regeneration zones, you have a near-perfect combination.

4. R for Representatives

You will need a strong team of representatives. These typically include mortgage brokers, accountants, solicitors for the purchase process, and rental agents who source and manage your tenant. They should also offer affordable maintenance in case of repairs or general wear and tear. It is extremely important to have this team in place before investing as they are specialists in their fields who will both offer the correct advice and save you a lot of money in the long run.

5. N for Never sell

Always invest with the concept of never selling in mind. Cash flow is what it’s about. If you buy correctly, you will have a cash-generating asset for years to come. This has all the elements of inflation-beating, long-term wealth creation.

However, should you need to sell, your exit should be to sell to the normal UK residential market. This allows you to market extensively to residential buyers through high street estate agents and obtain a quick sale. So, buy with this in mind as well.