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Buy and hold BTL strategy
Some investors will buy and sell (flip) after adding value, but they then need to swallow the fees and capital gains tax. They also say goodbye to future rental income and long term capital growth.
Other investors will add value (via refurbishments) and keep hold of their investment. They can use equity release mechanisms to release cash and avoid capital gains whilst keeping hold of their asset. Like fruit on a tree, property continually grows and becomes more 'juicy' over time.
I was speaking with a 35 year old woman recently who had flipped five properties, making an average of £25,000 on each one. She claimed that she's "retired" due to the success she's had. However, I see a few problems with her statement;
Retiring with a lump sum of cash presents other challenges. If you have £600,000 sitting in your bank, how do you budget? Some costs may increase more than expected, such as heating and food and as we all know, it is notoriously difficult to live within your means (especially when you have cash in the bank). A better idea would be to buy very high yielding properties and live off the rental income. Rents are likely to increase in line with inflation and the asset would appreciate over time also, which would afford you more security and increased flexibility in how you invest.
According to recent figures, people turning 65 this year will need a full state pension plus private savings of £121,000 to enjoy just £1,145/month in retirement. But what if living expenses rise dramatically, what will their standard of living be like then?
Holla Property franchisees who invest in just one property enjoy on average £1,400/month for life. That's more than the UK retirement average plus you would also enjoy capital appreciation on the property.
The crazy part is that a port folio of five properties can be achieve within 5 years using the Holla Property model and guidance. Yep, I think the buy and hold model is the way to go, don't you?
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