The best exit strategies for property investment

In this episode we’re looking at something pretty different for us – how to exit property!

A lot of our listeners are at the start of their property journey but it’s easy to not consider how you will wrap up your portfolio when that time comes around. If you’re considering this, then here are some of your options…

Never Let Go

First up is Rob B’s current plan – never exit.  If you have no mortgages, YOU can just hold forever for income then pass them on.

If you do have mortgages, you can get mortgages until much later in life than people think. Or if the properties are in a company, as long as there’s another director they can keep the mortgages going.

Advantage: Keeps the income stream going and gives you something to pass on
Disadvantage: Maybe you don’t want to be worrying about interest rates if you have mortgages, or don’t want the hassle of holding property at all

Sell some

You could instead sell enough properties to pay off the mortgage balances on the rest, then revert to the first option of holding on. If you’ve had a long period of growth you might only need to sell one property to pay off everything else.

Advantage: You’re debt-free and keep an income
Disadvantage: CGT

Sell the lot 

Liquidate everything and use the proceeds to invest in other asset classes

Advantage: You get more diversification – can take the money and allocate it across a global portfolio. No hassle from property.
Disadvantage: CGT, nothing to pass on.

A mix of the above

Sell one to pay down debts on the rest, sell a couple more to give you a lump of income to diversify across other asset classes, keep the rest for income with low mortgages.

You might even want to buy different types of property at this point, e.g. if you’ve been focusing on capital growth but now what matters most is a strong income.

Meanwhile, in the news this week, Barclays has unveiled a 10-year fixed rate buy-to-let mortgage at 2.99%. This is a heck of a rate if you do want that security. It wont be for everyone, but it will definitely be of interest to some. A note of caution though: There are some hefty penalties if you think you may want to move away from that mortgage or sell before the end of that term. Check out more on this here. 

And finally, our resource of the week will allow you to speed up, slow down, advance and rewind any HTML5 video with quick shortcuts. Download this Chrome extension here.

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