Selling your investment property to release the equity gains

Apart from buying your investment property it is also a good time to consider how you will sell your buy to let property in the future.

After getting your rental income flowing over a period of time it is sometimes a good opportunity to make a nice capital gain from the sale of the house or flat.

Most investors like to buy property which offers a 5% yield per year.

How to price your investment property.

Money House - Selling a buy to let property

If we know most people looking for a buy to let property like to see a 5% yield then we can work out how much to sell for by using the following formula.

Sale Price = Annual Rent * 20

So if a property rents for £500 per month the numbers would look like this:

((£500 * 12 = £6,000) * 20 ) = £120,000.

If you found a great investment property in London then you can actually sell the property for less than this yield because London house prices rise very quickly so many parties are not interested in the rental yield but rather the capital appreciation that could happen. Remember London houses prices have been going up on average 10% per year when the rest of the United Kingdom has seen house prices stay flat.

When is the best time to sell a buy to let investment

Summer time has always been a great time to sell property. Mainly because the weather makes people happier and in a better mood to look at moving. Recent research from a large property buying company found that landlords were 60% more likely to sell their property between Spring to Summer compared to December to January. Furthermore they also found Landlord on average got offers closer to their asking price during this period too.

House in Spring located in a meadow.

Personally I like selling property in the Spring because we normally get some refurbishment work done on the property first to make it look good. Then sort out the garden so when prospects come to view the property everything looks really good.

Everything looks better in the springtime. Take a look at the photo of a house we sold last Spring. It has solar power and is located in a fantastic meadow overlooking Bath in South West England.

We also recently sold a barn conversion in Bristol which also sold for its full market value which again I think is in thanks for the season.

Overall the only time of year I think is a bad time to sell is January. Most people are not looking to move home around this period because they’ve just had an expensive Christmas and the last expense they want is moving house at short notice.

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