The buy to let process

Before you start looking at properties, it’s a good idea to talk to a mortgage lender to get an idea of how much you might be able to borrow and how much repayments will cost.

Buy to Let mortgages are different to normal residential mortgages, because the amount you could borrow is also linked to the amount of rental income you expect to receive plus in Ulster Bank we include any additional disposable income you may have.

Don’t forget, you’ll also need to set aside some money to pay for other costs like solicitor’s fees, surveys, mortgage costs and Stamp Duty. On top of that, you might have to pay agents fees, for redecorating and ongoing maintenance costs. You also will have to decide if you’ll use agents to manage the property or manage it yourself.

Do your research. Where do you want to buy? Nearby so you can manage the property yourself, or somewhere further away where the return, or yield, will be greater? Who are your target tenants – students, a family or young professionals? Do you want somewhere that’s ready to let or somewhere that’s needs renovating?

Look at property websites to see how much properties are being rented for in the area. Speak to local estate agents and ask what types of properties are currently in demand. Draw up your own checklist and work out what are must-haves and what isn’t essential.

This link is to a non Ulster Bank website. Ulster Bank is not liable for the accuracy of the information provided on this website.

Register with estate agents and start looking on property sites. Sign up for email alerts so you’ll know as soon as a property that meets your criteria is listed online. And when you find something that you like, call the agent and arrange a viewing. 

Remember to think like a landlord and about your target tenants. You won’t be living in the property so don’t think about it emotionally. Think of it as an investment. Look for a property you can rent out easily.

When you’ve found the right place, make an offer through the estate agent. Remember, the sale price is what the seller hopes to get and not necessarily what they realistically expect. You may be able to negotiate a lower price. Make sure you know how much you’re prepared to let the seller push your offer up.

Make sure you’ve got a solicitor or conveyancer lined up. They will take care of the legal transfer of the property from one owner to another and do all the necessary land searches to check for past and potential problems.

Your buy-to-let mortgage will need to be arranged so speak to your lender about what you need to do. You may need to show them that you have a tenancy agreement ready and that you’ll be able to cover the mortgage if the property is left empty for any period of time. They’ll also need to know what the property is worth so will arrange for a Standard Valuation.

While it’s a requirement of your mortgage to have a Standard Valuation carried out, you might like to get a more detailed survey to aim to identify any hidden issues with the property.

If your valuation or survey highlights problems with the property, you could get a tradesman or builder to quote how much it will cost to fix it. This information could then be used to lower your offer and renegotiate on price. Be prepared to walk away if you need to.

At this point your solicitor or conveyancer will have carried out all the land searches that are needed. You’ll need to have buildings insurance now too, just in case something happens to the property before you move in.  You’ll be asked to sign a contract that legally commits you to buying the property. 

Money will be moved, which your solicitor or conveyancer will arrange, and you’ll need to pay your deposit. The signed contract will be exchanged with the seller’s solicitor or conveyancer, and the two sides will agree a date to complete the sale. Your solicitor will also prepare for the transfer of deeds.

It’s time to pick up the keys from the estate agents to your new investment property. This is when the property becomes legally yours. All the forms will have been signed, Stamp Duty has been paid and the money has been transferred to the seller’s solicitor.

Does the property need to be renovated or is it ready to rent? 

Make sure you stay on the right side of the law and know your legal obligations as a landlord and what taxes you’ll need to pay.

If you’re renting out the property furnished, it might be a good idea to take out contents insurance. If you’re redecorating, use plain styles and muted colours that won’t date.