Should I Hold or Should I Buy and Sell Property?
Posted on 18th September 2018 at 15:40
When it comes to buying and selling a property, timing is important. There are periods when you should hold onto a property, there are moments to offload your portfolio and the right time or opportunity to buy.
A lot depends on what you want to achieve and, to a certain extent, your personality. Some investors love the challenge of buying a property, doing it up and then selling it on for a profit. Others want to combine a steady income through renting their property out with longer term growth.
Holding a Property
No other investment delivers such a good, consistent return than property.
It’s not for the short-term, according to many investors, however. The longer you can hold on to a house or flat, the more it should be worth in the future. The average value of a property in Northampton, for example, is currently £260,809, up more than 32% in the last ten years (according to Zoopla).
If you are operating a buy to let at the same time, you should get good revenue from your tenants in addition to the increasing value of your property over time.
The other reason for holding rather than continually buying and selling property is that you don’t open yourself up to outlays such as stamp duty, refurbishment costs, financing charges and the like. It can cost a lot more money than many people think, eating into the profit you may have made while holding the house or flat.
There’s an old adage in stock market dealing: buy and hold. A lot depends on the location you choose to invest, of course. A stable area on the rise is likely to deliver good returns over the long term while also attracting decent quality tenants.
Buying and Selling Property
There are plenty of people who sit on the other side of the fence when it comes to investing. Buying a property at a low price, renovating it and then selling it on at a profit is their goal but it’s also a lot of hard work. You need to find the right property first, get the financing to buy it, work through all the renovations and then find a buyer to take it at a good price that gives you a profit.
If you’re good at buying and selling and have an eye for a bargain, all well and good. But there are other factors to take into account with this approach. Financing may well be difficult to come by if you don’t have a certain amount in reserve. There is also a good deal of risk involved. Despite your best efforts there’s no guarantee that your great investment will deliver when you come to sell and could even lose you money.
The key to success is in doing your research and planning to a high degree, something that not all investors are good at. That means picking the right location and having a deep understanding of the market. There’s no doubt that people have succeeded with this kind of investing but you do need to have certain qualities and, above all, be prepared to take the risk.
Which is Best For You?
A lot will depend on your personality type. Those who buy and sell are after something a little more than simply making a profit. It’s the process of picking the right property, renovating it and then making a killing that attracts them. If you’re a little more reticent in your approach, however, a longer investment combined with rental income is certainly going to be your best choice.
If you are looking for some advice, contact us today to find out how we can help.
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