There are two approaches to investing in London property:
The short term approach
- Typically called “Flipping”
- is highly risky for most people, especially for retirement planning purposes.
The longer term approach
- Purchasing property with a long term perspective in mind, this is a much better way to go.
Let’s look at both.
The short term approach.
The newspapers talk a lot about people “flipping” London properties and either making huge profits or huge losses depending on what story they want to publish.
Although some people make money by flipping properties –i.e. buying a property then selling for a profit relatively quickly – the record is clear that this is a big gamble.
Profiting from this short term approach is not as easy as it may seem and actually requires the simultaneous occurrence of many market conditions to achieve a profit.
A lot of “Property Clubs” sold off plan property both in UK and abroad on the promise that the property could be “flipped” before the balance of the purchase price had to be paid. A lot of money has been lost this way, unfortunately mainly by naive “would be” London property investors who paid large deposits on property’s that had not yet been built.
Due to these widely published experiences many budding property investing in London have lost both money and confidence and no longer see property as a good investment. In fact property is one of the BEST investments if approached in the correct way.
The long term approach
Adopting a longer term view is a much better approach for most individuals interested in enhancing their retirement funds. We would always recommend buying and then keeping a property for at least 10 years.
Why? – because historically property prices have always doubled every seven years. This is not to say that this will keep happening in the future but a 10 year period allows the property to substantially increase in value. During this ten year period, if you have good sound professional advice and management, the London property should be rented out for a large majority of the 10 years thus producing income at the same time as capital appreciation.