How Should I Invest After Selling My Property Portfolio?
Estimated reading time 6 minutes
“Help me sell my property portfolio” is often something we hear from property investors who are looking at exiting the property market, and, of course, we are delighted to help. However, the first question we ask is, “Are you sure?” Property investment can be a gold mine for some, but a poisoned chalice for others, so deciding at the right time is important.
However, for the most part, when it comes to selling a portfolio of properties, it isn’t so much that the owner wants to get out of property altogether, they just no longer want to be a landlord and deal with the variety of property problems that may appear. This is certainly fair enough. Landlord insurance, marketing the properties, deposit protection schemes and absconding tenants can all make it a stressful venture. So why not sell up and look to invest elsewhere to build up your cash?
We have looked at the options for investors after selling their property portfolio.
This may sound odd, especially since we have stated that many investors may be looking to exit property altogether. However, depending on the size of the portfolio you sold, there may still be a few alluring property opportunities out there. With rents at all-time highs, there is plenty of opportunity to invest in properties that deliver an even more significant return than what you gained from those you held in your portfolio.
It has been predicted by Savills that property prices could rise by as much as 17.6% by 2026, and with opportunities like that, diving back into property may be worth considering.
Perhaps the way to really make your money work and deliver the best return is to look for properties that are not yet finished. Open-plan properties are often available at cheaper prices, allowing for the money you have earned from the sale of your portfolio to go much further. Potentially allowing for a more diversified investment portfolio altogether, you can keep your fingers on the property pulse whilst also having cash left over for wise investments elsewhere.
Mutual funds are a form of investment that requires almost zero work from yourself; instead, your cash is put in the hands of a fund manager.
Using pooled funding from investors, mutual funds put money into stocks and bonds. With a variety of options, much of the risk is left to the fund manager as they allocate funding to equity funds, fixed-income funds, and more.
Your income typically comes from a mutual fund in three ways: dividends on the stocks and interest on the bonds, capital gains if the fund sells securities that have risen in price, and capital gains that come about from an increase in share prices.
Like any investment, they are not risk-free, but do offer investors something that leaves the complicated choice of stocks down to the fund manager. As of June 2023, comparebanks.co.uk ranked the Franklin Templeton UK Smaller Companies Fund and the J O Hambro UK Equity Income Fund as the best available in the UK for investors.
With any such investment, you should always seek guidance from a financial advisor or investment specialist first.
High-interest savings accounts
Without complicating things, a savings account can sometimes be the best way to invest the returns from the sale of your property portfolio. It won’t deliver the high returns of other methods of investing, but it is perhaps the safest option.
You do need to shop around for the best interest rates, and it is worth looking at the terms of withdrawal. Some accounts stipulate that you can only make withdrawals in limited amounts, while others give you free rein with your cash.
Nationwide is offering existing customers an 8% rate on their regular saver so it does require a monthly injection of cash to maintain the higher rate, but it can deliver strong rewards. You can skip months if need be, but if this becomes too regular, you won’t see the best returns. You can also withdraw three times a year without penalty.
Should you want easier access you can pick up 5.2% with NatWest Group’s Ulster Bank easy access saver, and you can go as high as 6% with Ford Money if you keep the cash in the account for two years.
Possibly a bone of contention for some, but in the interests of providing you with a variety of options, we have chosen to include cryptocurrency. Crypto has delivered some phenomenal returns for investors. In some instances, returns have been more than 400%!
It is one of the riskiest options, though. The cryptocurrency market fluctuates a lot, and your investment can easily be worth a large sum one day and almost nothing the next.
If you want to be a little cautious, a crypto investment is not for you.
Bitcoin and Ethereum are among the most well-known and the ones that have delivered great returns, but as we said, this is to be considered carefully. One bitcoin was worth £370 in 2016 but today, in October 2023, that same coin is worth close to £23,000.
The stock market
The stock market is perhaps an obvious choice, but if you are new to investing in stocks, it can be fraught with confusion. For some, the gamble is a little too much to chance. However, the rewards can be fantastic.
With much of the value of stocks controlled by things you have no power over, you can quickly see value lost just as fast as it was gained. Things such as governmental policies, wars, and even supply chains can all see values change incredibly fast.
The Barclays Equity Gilt Study found that stocks have been delivering an average return of more than 5% over the past 50 years. Compared to the returns on property investment, this is seen as quite small, but if you are opting to step away from property, it could be an option.
That being said, the volatility of such markets means that the risk-reward ratio must be considered first. Stocks are not the safest option for your house sale money, but they could reward you well.
If you are looking to step away from the world of property, contact the experts at Gaffsy. We have years of experience buying property portfolios so that you can exit without worry. Our processes are smooth, quick and simple, allowing you to receive a firm offer on your entire property portfolio with the funds in your account within just a few days. Contact our team today and receive a free property portfolio cash offer.