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Can I sell my investment property as a way of making money? |
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Yes, you are free to sell your property at any time - after all it is your investment!. However, if you are serious about long-term financial freedom, you should really be investing in property for the medium to long-term, as the plan is to accrue equity from capital appreciation of the property and cash flow from the rent. In the current market conditions it would not be advisable to sell any property and it is unlikely that you will get any capital appreciation - therefore your primary focus must, as always, be positive cash flow from the rent.
In theory, when you have accrued sufficient equity, and the rental income allows, you can re-mortgage the property and release cash, which is TAX FREE. However, in the current market conditions, with the current financial products, this is unlikely to be a realistic business model. Therefore, the business model we advocate is to hold all your stock for the long term and focus on positive cash flow.
If you do sell a property, you incur a capital gains tax liability. Therefore, the true way to wealth creation in property is to hold onto your stock indefinitely, and just keep taking equity releases (when/if mortgage products and circumstances allow) to fund further investment, finance your children’s education, allow you to retire, or fund your lifetime ambition. It’s up to you! View your properties as golden geese who lay a golden egg every few years. You can use an equity release from your investment property to pay back the original equity release from your own home, which means you only borrowed the money from yourself for a few years to grow additional assets.
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