You already may have benefited from, or at least heard about the large profits to be made from buy to sell property.
One of the most important questions is “How would one go about generating and maximising profit from buy to sell property?”.
We first should look at the most popular buy to sell options…
If you are buying a property with a set period of time between exchange and completion of contract and an assignability clause agreed with the seller, you (as the purchaser) could potentially sell this on to another purchaser before completion.
The way this works is that you exchange contracts with the seller, the second purchaser then exchanges contracts with you. If your buy to sell property is sold on for more than the purchase price originally agreed with the seller, the difference between the original sale price and price you sell on to the second purchaser is your profit.
Many investors who utilise this buy to sell method will actually have a second purchaser lined up before exchanging contracts with the seller and thus minimising their buy to sell risk.
This option is attractive to buy to sell investors who wish to make a potentially substantial in just a relatively short period of time. Many will then re-invest and increase these profits time and time again.
However, what if a buy to sell investor didn’t want to adhere to such tight contract deadlines and suffer the potential consequence of not finding a second buyer to purchase at a higher price?
The more conventional method for a buy to sell investor is to purchase their chosen property from the seller with no assignable contract and no second purchaser.
After legal completion, the property may be tenanted to provide rental income and offset and ongoing and mortgage costs. Maybe the property will sit untouched for a few months, maybe even years.
“Own a property which is not generating rental income and I get no personal use from?!?”. This option may not sound beneficial based on these facts.
However, the aim in this case is not to generate a rental income or to use as a second or even third home.