When To Buy, When To Sell
The only thing that is harder than buying investment
property is knowing when you put up your investment property for sale. Selling
investment property is crucial to your success, and selling to early or too
late can greatly affect your success. Timing when buying investment property is
also important. If you can get the timing and circumstances right when buying property
and putting your investment property for sale, then you will be on the path to
success.
When to buy
Perhaps the most important factor to consider when buying
investment property is your own financial situation. Although there are many
other factors that determine whether the time is good to buy or not, these mean
nothing if you do not have the finances available. The best time to buy
investment property is when you are able to buy it, and have considered all the
financial risks involved. The most important things to consider are:
- Get
your finances in order so that you have a better chance of securing a loan
- Do
not rush into anything, because if you take your time it will serve you
better in the long run
- Have
a cash reserve left over after buying, in case of unexpected repairs etc
- Do
not over-commit yourself or go beyond your budget
- Examine
the market and do not overpay for a property
When to sell
Although a lot of the money you make can be down to the
time and quality of the property you have bought, a lot also depends on when
you sell the property. This decision is perhaps harder than buying, especially
if you are losing money. However, when putting up your investment property for
sale there are a number of benchmarks you can look at that will help you to
decide if the time is right to sell.
Maximised profit
One reason to put up investment property for sale is when
you have reached the maximum profit for that property. This is obviously hard
to predict, but if you monitor the local situation regarding property prices, you will be in a better
position to know when to sell. Sometimes you may sell and the price still goes
up, in which case you didn’t get the maximum profit. However, you have to weigh
up the advantages and disadvantages. If the price you can get at the moment is
high enough for you, and you believe keeping the property is no guarantee of a
substantial profit increase, then it is probably a good time to sell.
Find another investment
Another good reason to put up your investment property for
sale is if you find a bigger and better opportunity. Even if you find somewhere
that has the same percentage profit potential as your current investment, an
increase in value will mean greater profits. For example, your current
investment is a house you bought for £200,000, and it makes you £50,000 over 5
years. You are now in a position to buy something worth, for example, £400,000.
If this property increases by the same percentage, then you will make £100,000
over 5 years, which is obviously a much better investment. If you are in a
position to buy another property without significant risk, then this could be a
good time to sell.
Need for cas
Although perhaps not the best reason to sell, if you need
money then perhaps the time is right. The goal of real estate investment is to
make money, and if you can put up your investment property for sale at a price
that gives you the money you need, then you have accomplished your goals.
Whether you need money to send children to university or for your own retirement
or even for a long holiday, then the time might be right to sell. Obviously you
may not end up with the biggest profit possible, but if you have achieved the
goals you had aimed for then selling is a good idea.
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Knowing when to buy and sell investment property is
extremely difficult, because there are so many factors to consider. However,
the most important thing to remember when buying or putting up your investment
property for sale is to do it when you feel the time and situation is right.