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Property Investment Exit Strategy: How to get out

Last updated: 30th September 2020

Having an exit strategy is just as important as choosing your property investment strategy.


Because there’ll inevitably be a time when you want to get out of the property game and retire from property. And you’ll want it to be as easy as possible.

But there’s more to it than simply putting your property on the market and hoping for a quick sale.

Not many property investors think about their exit strategy when starting out, and that’s a mistake. If you’re an avid podcast listener, Rob & Rob covered this on The Property Podcast not that long ago. But we’re going to go into a bit more detail here.

Here’s a breakdown of the different exit strategies you can choose from.

Keep your property investment portfolio forever

Believe it or not this is the exit strategy that most people struggle with. Or at least come to terms with.

Most people think that by the time we reach retirement, we need to be debt free. And if you have an outstanding debt in the form of a mortgage on a property, you should sell it.

But what if that didn’t have to be the case?

If your property investment portfolio has given you a good rental income over the years, why not keep that going into your retirement? Or even pass the portfolio onto other family members so they can benefit from it?

Another point to consider is that the property portfolio you start with might not be what you end up with. Over the years you’re likely to get rid of the deadweight in your property portfolio. It could be a property that isn’t bringing in the rental income you thought it would, or a property that’s hard to manage. It could even be a property that’s not in a very good location and it doesn’t benefit you anymore.

Your goals will determine which exit strategy is right for you – for example, if your goal is to generate a decent income during retirement, holding tight to your portfolio is going to give you a decent living wage.

But if you’re not content with mortgages and having outstanding debt, this might not be the exit strategy for you.

Reduce your portfolio

Another exit strategy is to sell off some of your property portfolio, pay off the debts and have your portfolio debt free.

Contrary to belief, you can actually have a mortgage past 65 or 70. There are plenty of lenders who offer mortgages well into retirement age.

But we understand that a lot of people want to take away any possibility of additional risk. And it’s important, because if you’re going into the later stages of life, you want to relax and have fun. You want to do the things that you want to do. So it’s stupid to have a worry holding you back and playing on your mind when it doesn’t have to.

So what you can do is sell some of your portfolio to pay off the debt on the rest. Now, if the property cycle has been helping you out, and if you’ve not been refinancing aggressively, then the loan-to-value on your property portfolio by the time you get to this point should be lower than it is now.

If you only have one property then you might be stuck as your only choice would be to either keep or sell. But if you have a portfolio of properties in multiple locations, it might be a question of which ones you decide to sell to pay off the finance on the ones you want to keep.

As you should know by now, location is everything with property investment. You’ll be able to see over the years which locations have done better than others. Some may have benefitted from the ripple effect from other nearby cities which will mean some of your properties have experienced significant capital growth which will work in your favour if you’re looking to sell.

So when it comes to choosing which properties to keep and sell, there’s a fair bit of analysis to do, but by dumping some of your portfolio, you could be mortgage free on the rest.

Our resource on the real reasons why property goes up in value would be useful for you to swot up on here.

Sell your entire property investment portfolio

Yep. We’re talking about selling the lot.

Take the cash lump sum, pay off the mortgage and run.

If you’ve reached that point where you’re fed up, want to sell up and enjoy life with your hard-earned return on investment, you could get rid of the lot and go your merry way.

That’s what a lot of people do, and why not? You’ve worked hard all your life so maybe now is the time to book that world cruise.

Some decide to sell their portfolio and invest their money elsewhere to generate a passive income. Which is a great way to generate an income without having any of the worry.

We know it sounds severe. Most people plan on holding their properties forever and reaping the rental income rewards. But if you’re ready to let go, there are a few things you need to be mindful of.

It might not be as easy as simply selling up – job done. There’s that annoying thing called tax that’ll be involved.

But you shouldn’t let tax stop you from living the life that you want, and if you have to pay a little bit of tax to do that, then so be it. But you should have at least a basic understanding of tax beforehand so you know what to expect.

Which property investment exit strategy is right for me?

Believe it or not there is no right or wrong property investment exit strategy. It’s all based on personal preference and circumstances.

Naturally, if you were to choose a flip or a refurb strategy and you wanted an exit, you simply wouldn’t buy the next property.

But if you were to go down the HMO or buy-to-let strategy route, then you’d more than likely take into account one of the above options.

Choosing an exit strategy for your property investments doesn’t have to be a key focus. You don’t even have to choose one before you get started with property. It just helps to give you a clear idea of what your options are when you reach your end goal.

If by the end of this you’re not completely satisfied with the property investment strategy you’ve chosen and you’re not sure how it’s going to tie in with your goals, speak to our team. If you’re ready to invest in property but aren’t sure where to start, you can book a free strategy meeting here – all it’ll cost you is your time and you’ll have a clear idea of which strategy is right for you.

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