In this article, here at Quick Property Buyer, we thought we would look at property investing over the long term and short term and when is best to cash in.
- The Long Term View
Investing in UK real estate is a long term venture. Most people use property as their homes, so it naturally becomes an asset that is held for a long period. Likewise many buy to let investors do not flip properties straight away as the stamp duty costs do not justify it. Instead it is mainly developers that buy and sell quickly.
If you track the peaks and troughs over the last 50 years in Brighton, UK, you will see the falls have always been short term. And on the bigger picture, properties have consistently gone up over the last 50 years on average somewhere near 7%.
- Guaranteed Profit?
But does that mean you are guaranteed to make money? Certainly not. The 5 year game is not the same as the 50 year game. The likelihood of making a profit is higher the longer you hold onto the property.
Indeed I bought a house in Brighton in 2012 that was £60,000 less than the seller has paid for it 6 years before. The lesson I learnt there was never buy new from a developer. Because those who buy new properties pay a premium for the pleasure of having everything new. Those who make money are those who buy properties as the second buyer those who buy off those who bought new.
- Should I Sell Quickly for Cash
You may not want to wait 50 years or even 5 years for that matter. You may want to cash in quickly for cash.
A benefit of selling property for cash is the likelihood of the deal cratering is far less. Also the deal can be closed far quicker than if the buyer needs to raise finance or sell their own property.
My view would be to sell to a cash buyer on all occasions if you have the option. When selling property do not be guided by sentiment. The nice family may have tugged at your heartstrings but if they need to sell their home, they will not be your favourite buyer if the deals falls through.
If you have to take less from a cash buyer so be it. Sure if you are not in a rush or do not have an onward purchase, you can afford to be more choosey. But in most cases, it is far better to opt for option that is most likely to compete.
That is why Quick Property Buyer is a good option.