Preparing for your investment property purchase

If you are planning to invest in a Buy To Let property this year, then there are some key things you need to do to prepare for your purchase and put yourself in the best possible position.


  • Engage with a mortgage broker who understands the investment property market and complete an initial financial assessment with them. By completing the initial assessment, we can flag up any issues in your personal circumstances that may need addressing before you start to view any properties and certainly before you submit any offers! I always make sure that my clients are prepared and ready for applying for a mortgage or bridging finance as soon as their offer has been accepted in order to proceed quickly.
  • Discuss with your broker how your anticipated property investment strategy works from a finance point of view, taking into consideration your individual circumstances so you know if there are any limitations.
  • Prepare all of your paperwork and have everything up to date and ready to produce that a lender may ask for when applying for finance.
  • Obtain a copy of your credit report so that you can see if there is anything showing on your report that could cause an issue further down the line. You can also make sure that you are on the voters roll.


Self-employed or a Director?

By now you would have submitted your tax return for the 19/20 tax year and may even have submitted or be ready to submit your 20/21 tax return. It is key to ask your accountant or tax advisor to send you the tax calculation summary and overview to confirm the tax you have paid. Lenders more and more, request both of these documents when assessing your income, so to save time, if you have both of these ready before you apply for your mortgage you will be in good position when you come to submit the finance application.

If you already own rental properties and have the income from these shown on your tax returns, it’s also a very good idea to keep a copy of your full SA100 return to show a breakdown of the rental income that you have reported, this is even the case if you have expenses offsetting the rental income.

I always recommend having at least the last 2 years’ tax calculation summaries and overviews, just in case you go with a lender who needs at least 2 years’ worth.


Portfolio Landlords

If you are a portfolio landlord, then now is a good time to review your documents also. One of the most important documents that a lender will ask for is your portfolio schedule.

It is so important that you spend some time online reviewing the property valuations you have stated and ensure that all of the rental income for each property is accurate.

The portfolio schedule is also one of the most important documents for your broker when assessing finance options and the lenders available to you as a portfolio landlord. By keeping this information up to date you can ensure a smoother underwriting process and there will be less chance of a lender declining your application based on the portfolio assessment.

Personally, I check my portfolio assessment at least once a year, particularly around August time as my rental properties are let to students, they tend to move in during summer and each year the rental income normally increases slightly, so I use this time to update my portfolio schedule too.


Life cover provisions in place

This is the one area that is often neglected and that is your long term strategy for the portfolio and whether you should be thinking if life cover is needed to allow you to meet your long term plan.

There are many types of potential cover that are available for this purpose and I would strongly recommend talking to your broker to discuss this in more detail.


Buying in a sole name or Ltd company

Whether you purchase a property in your sole name or via a Ltd company is certainly a conversation you should have with your accountant or tax advisor. It Is down to everyone’s’ each individual circumstances and can be affected by a number of things, such as; how many properties you are planning on buying, what rate of tax do you pay now, will you be drawing an income from the rent etc.

Getting this right before you buy your first investment property is key to make sure that you don’t pay any unnecessary tax further down the line. Speak with your accountant or tax advisor!


If you would like to discuss buying an investment property, be it to keep and rent out or renovate and then sell on, then please feel free to get in touch and we would be happy to help.

We don’t charge a fee for our advice either!!

Mortgage brokers based in Nottingham.