Buying your first flat is an extremely exciting experience and an important moment in your life. This type of property can also be a worthwhile investment. When you purchase a flat for a good price, you will always be hoping that its value will grow, so you can sell it further down the line for a profit.
But how long might it take for this to happen? And when is the right time to sell your flat?
These two questions are extremely important for any flat owner in the UK. If you are keen to meet your financial and personal goals, then putting careful thought into the timing of the sale of your flat is a wise thing to do. Read our blog below for guidance on how to do this.
How Long Should I Keep My Flat Before I Sell It?
It is widely recommended by property experts that you live in your flat for at least five years before you sell it. If you sell your flat fast after purchasing it, you are unlikely to make a significant return on your investment (if any at all) because it won’t have increased in value.
There are also costs associated with selling your flat on the market, such as estate agent fees and legal fees, which must also be taken into account when calculating your profit.
Therefore, staying in your flat for at least five years can help to override any costs associated with selling the property. You may wish to keep the flat much longer if you are renting it out, as this can provide a valuable, ongoing stream of income which you may be able to capitalise on for years or decades.
Pay attention to the market
While it is generally understood that the longer you keep your flat, the more money you are likely to make from it, you should also pay close attention to the property market. If there is a significant downturn in property prices, then it is unwise to sell during a difficult time – and if the market is ‘cold’ at the time you decide to sell, then this is unadvisable, too.
Market conditions can have a major impact on how much you sell your flat for, and how convenient the process is. You should speak to property experts whenever possible for guidance on the market, such as how much similar flats in the area are selling for, and how many buyers are currently on the market.
Consider your short-term and long-term goals
You personal and financial goals will have a major bearing on how long you should keep your flat.
If you are in short-term need of money, then selling your property can help with this. However, it might mean that you don’t make as much profit on the flat as you potentially could’ve done.
Alternatively, if you are keen to provide a ‘first property’ to your current/future children, then hanging onto your flat might be a smart idea. It can enable you to give them a first step onto the property ladder – however, this will mean that you don’t get to cash in on the flat yourself.
If you are unmarried and/or don’t have children, then perhaps you are more concerned with financing other luxuries in your life, such as an early retirement or a brand new car. In this instance, you may decide that selling your flat takes priority.
However, if your long-term goal is to build an extensive property portfolio, then keeping ownership of your flat can be an excellent first step to achieving that.
If you are entering a period of transition in your life, or it has been a while since you checked the value of your house, then you should hire an independent valuer to visit your property and give you an estimate of its value. It is always advisable that you hire an independent expert to do this, rather than an estate agent, because some estate agents will increase their valuation to tell you ‘what you want to hear’, so you select them to sell their property. These valuations can be extremely helpful for informing your decision about when to sell, if at all.
Should I sell my flat or rent it out?
Whether you to decide to sell your flat or rent it out is entirely up to you. There are some crucial things to consider when making this decision, such as:
- Do you need money in the short-term, or would you prefer a steady source of income?
- Are you prepared to deal with property management and tenant-related issues, or would you rather not have landlord responsibilities?
- Are you comfortable with the unpredictable nature of the property market?
- Do you have the time and resources to manage a rental property?
These are all important factors to consider before selling your flat or renting it out.
Finally, if you are wondering whether your flat will sell faster furnished or unfurnished, then click on the link to find out.