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Is it better to buy-to-let or buy, do up and sell?

buy to let Jun 27, 2016

THE QUESTION

Is it better to buy-to-let or buy, than refurb and sell?

THE ANSWER

Neither is better, they're just different strategies.

Buying-to-sell (BTS) gives you a significant cash lump sum (if you do it right) within months.

Buy-to-Let (BTL) gives you a much smaller monthly profit (if you do it right) for years to come, with the bonus of potential capital growth (depending on where you buy).

  • Some people focus on BTS because their current circumstances mean they are not mortgageable. That prevents them using the BTL strategy, up to the point where their profits establish a sufficient credit record and they become mortgageable
  • Some people choose to BTS properties that need no work doing to them, but can be sold at a profit on the purchase price paid.
  • Some people choose BTL on properties they do up because they can increase the value, get a mortgage against the higher value and have relatively little of their own cash left in the deal.
  • Some people choose to use a combination of strategies.

Usually people focus on what they are able to do and choose strategies which meet their objectives and priorities.

 

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