Sell your property like limited-edition trainers
When non-essential retail reopened for business in England last week not all of those who began forming queues from as early as 6am were, what one might call, conventional customers.
Waiting in line outside those shops specialising in a famous international brand of sports and leisure shoe wear were people intent on buying in bulk and selling onat a profit. Their target was not just rare “limited edition” items but those that had been produced in a “short-run”, i.e. in thousands rather than hundreds of thousands. With attendant publicity from so-called personalities, they reckoned the level of demand would bring profits of between 100 and 500 per cent even on the full-market price.
You may be beginning to wonder what the demand for high-value trainers aimed at “yoof ” has to do with residential property but, trust me, I do have my feet firmly on the ground in making a connection.
There are, in every city market with myriad properties confined to a relatively small area, a small coterie of super-mobile buyers adept at buying a home at the market price and then going on to make a worthwhile profit while – like those who queued to buy expensive trainers – expending little in the way of time and money. Just to clarify, these are not the usual people who target distressed properties (often at auction) and then carry out a complete renovation. For this other buyer a quick makeover can also realise profit if prepared to put up with a short period of personal inconvenience.
Typically, this person is happy to pay the asking price of a house because he senses that with a bit of TLC the vendor could actually have received substantially more. Not much needs to be spent on achieving this; some redecoration, some new furniture more suited to the floor space; positioning of non-fixed items to take maximum advanments;
tage of the available space. Unlike the property investor, this buyer moves in (either alone or with spouse and family) which means that as a “main home” the profit on the subsequent sale is not subject to capital gains tax.
In another instance it is even possible to achieve this without spending anything on internal rearrangements or improvefor example, buy a property in November or December, when prices are depressed by the shortage of daylight, then sell in May or June when the immediate surroundings (especially the garden) look so much better and high demand from buyers pushes up values.
This, of course, does draw attention to the one downside to such a strategy. To realise a profit the owner tends to stay only for a few months so it’s not ideal if there are school-age children.
But there is also a moral here for “ordinary” vendors who are not bothered about moneymaking strategies other than they just want to achieve an acceptable price. Good presentation is about making a property appeal to as many buyers as possible or, at worst, not putting people off. And if that requires owners to make internal readjustments which don’t exactly suit them (including banishing some much-loved items to the attic) then so be it.
In this respect the owner-occupier should be at one with the investor when the time comes to sell: treat the property as a commodity and nothing more if you want to achieve the best possible price.
David Alexander is managing director of DJ Alexander