When you’re looking into property investment, it’s important that you know all the facts. One of the things that is often missed is how soon a property can be sold after buying it. Read more to learn how to beat the 'Six Month Rule'

It isn’t uncommon for a buyer to consider selling their home shortly after purchasing it, especially if they’re looking to make a quick profit or it’s a property to be refurbished and flipped. But is there a minimum amount of time you need to have owned the property before you can sell it?

Legally speaking, there is no law in the UK that outlines a time period that you must own a property before it can be sold. Technically speaking, this means that you could sell it as soon as you like. But there are drawbacks to this. This is what we talk about below.

It’s important to note that if you were to sell your home and pay back the balance of the mortgage, your lender could charge you a hefty charge known as early repayment charges. It is also possible that banks, building societies and some online lenders could see your quick turnaround as a risk and this could affect you in the future.

However, if the purchase of the property is made in cash – then these complications can be avoided.

Another concern of reselling a property soon after purchasing it is that potential buyers may be suspicious if the property returns on the market while they are still property hunting. Potential buyers could think the property has structural issues, neighbours are a problem or crime rates are high for example.

You will need to cover the costs of the agent fees and legal fees of the purchase, when you sell the property. If you do nothing to the property you may struggle to sell it for more than it was purchased for. However, if you were to refurbish or flip the property, there is a great chance you could have a large return on your investment.

You will find that many mortgage lenders will only allow a mortgage to be taken out on a property after the property has been registered with the same owner on Land Registry for at least 6 months. However, if your property investment is classed as a business this six-month rule will often be overlooked.

If you are a property investor that is looking to renovate  a house and then flip it for a profit, it’s important to take the Capital Gains Tax into consideration. This is a tax that is paid on the profit from your assets. The tax rates continually change so make sure you speak to a financial advisor or accountant to ensure you are up to date on the current income brackets and tax rates.

Want to know about sourcing a property, renovating it and flipping it for a profit? Call our team now to ask any questions you might have.