‘Trust the process’ as the saying goes, but it’s better if you know what that process is.
If you’ve ever asked a question about property investment and felt that you didn’t understand some of the processes involved or language used, I hear you.
Nobody wants to feel clueless about what’s happening with their money.
As an experienced property investor, I believe it’s better for you to be fully informed about the process when investing in Scottish property before you part with your cash.
Why? Because whilst trust and mitigating the risks are key, it really helps to understand what’s going on.
From setting out your goals and objectives, to signing the contract and taking ownership of the property, I’ll explain in detail what happens when you use a property sourcer to find your investment property.
PLEASE NOTE: I am not a financial adviser, and any figures mentioned are estimates only. The information in this blog is for guidance only, and you should always seek independent advice before proceeding with an investment.
Why choose a property sourcer?
You may wonder why you need a property sourcer. After all, how hard can it be to find a property? But a property sourcer does much more than that. They render the whole process hands-off, and offer peace of mind into the bargain.
Investing with a property sourcer can save a great deal of time and effort because you are gaining access to a network of trusted professionals that you would otherwise have to take time to build up yourself.
However, I should preface this blog by saying not all property sourcers are equal.
You still have to do your due diligence and make sure your property sourcer has a good reputation, excellent testimonials and communicates promptly, so take the time to look them up on review sites and social media.
You also need to ask them about their own process, as the below may not be true for everyone. Sound good? Let’s take a look at how it should be done, based on my own process as a property sourcer.
Step 1: Set out your goals and objectives
What are your property investment goals? Maybe it’s to protect your family’s future, or perhaps to have a solid plan for your retirement?
Whatever the goal, try to be as specific as possible when determining the return you’re looking for, as well as details such as the type of property and location you’re looking to invest in – this will make it much easier when you come to speak to a sourcer.
Step 2: Choose a strategy that’s right for you
There are many different strategies you can choose from when investing in property – in fact, we’ve outlined each of the main ones in this guide.
For the purpose of this blog, let’s assume that strategy is buy-to-let, but I’ll also talk about how this differs throughout the process where other strategies are involved.
Step 3: Find a trusted property sourcer
Because a property sourcer does so much of the ‘legwork’ it’s really worth taking the time to find someone that comes highly recommended. This way, you can be confident that you’re in safe hands and enjoy peace of mind about the whole process.
It’s important to remember that not all property sourcers work in the same way. Done right, the process to finding the right property is complex and involves a great deal of careful research built on working closely with the investor.
A good property sourcer will have a substantial network to work with and this all takes time. They won’t be sourcing from Rightmove so if they are giving the impression that this is a speedy process, this should sound warning bells.
Doing your due diligence is important so don’t hesitate to get on some local investment groups and ask for some positive word-of-mouth recommendations. You might hear some names come up again and again – a good sign!
Step 4: Agree a sourcing fee
A good property sourcer won’t hesitate to answer any questions you might have, be clear about their fees and have no hidden charges. Some sourcing professionals may charge a non-refundable deposit, others a flat fee.
Your fee isn’t just buying you a better route to your chosen property, it’s allowing you to take advantage of all the experience and knowledge that your sourcing professional has acquired, saving you precious time and energy.
Step 5: Draw up a contract
You and the property sourcer will agree on a timescale for finding your chosen property and all this is drawn up into a contract for you to sign.
Contracts will vary depending on your chosen strategy and should include all acquisition costs required to deliver the property in walk-in condition. This can include project management for any refurbishment work the property may need.
For assisted sales with a motivated seller, the property sourcer can act as the middleman between you and the seller, and the more open and transparent they are, the better. The contract may include refurbishment, estate agency and legal fees.
Step 6: Skip all the usual fees and hassle
You can then sit back and relax while the property sourcer takes over. They’ll put the feelers out, assess the area, and view properties. They’ll do careful research in order to make calculations to get an idea of rental yield and, if all goes well, put an offer in.
It’s important to remember that this doesn’t happen overnight, and can take up to three months before a suitable property is found. A good property sourcer won’t just be looking at existing properties but researching up and coming developments.
Step 7: Handover – and the start of your property journey!
If you’re choosing a hands-on approach for an empty property, it’s time to get your keys and begin the process of getting the property ready to flip, or for welcoming in new tenants! Or, if the property is already tenanted, you won’t have to do much at all.
It could be that you’ve agreed on a hands-off approach beforehand with your property sourcer. Remember those acquisition fees mentioned above that can include project management, so you won’t have to lift a finger? Many investors prefer this option.
Whatever your strategy, it’s time for you to begin getting the most out of your investment, and I wish you the best of luck!
Advice from an experienced property sourcer
When it comes to investing with a property sourcer, or property investment in general, it’s essential to have a team you can trust. A team that has all the right experience, and your best interests at the heart of everything they do.
That’s why it’s important to do your due diligence before entering into a contract with anyone. Where possible, check third-party reviews and testimonials – or even ask to speak to previous investors they’ve worked with.
The right property sourcer should be responsive to your property goals and the exact type of property you’re looking for. They should also be meticulous when it comes to viewing the property as this is obviously a key part of the process.
If you want a hands-off approach, check and double check the fees involved and whether there will be any nasty hidden charges – as well as determining everything that will be completed for the costs.
Conclusion
Thanks for taking the time to read, and I hope this blog has managed to shed some light on the process when investing with a property sourcer such as myself.
The actual process itself still depends mainly on the strategy you choose, but it’s also wise to remember that not all property sourcers are equal, and some may work a little differently to the process above.
That’s why it’s always vitally important to do your due diligence before agreeing and entering into a contract when investing with a property sourcer.
If you have any questions about anything I’ve mentioned in this blog, or you’re just simply looking for some advice regarding property investment, please don’t hesitate to get in touch.
If I can’t be of any help, I’m still happy to point you in the direction of someone who can!
Written by John Nicol, Founder of Ascension Property Investments
Get in touch on 07939135125 or email [email protected]
