29
May

Property Trader versus Investors

Hi Shyam

My interpretation of a property investor is somebody who purchases a property with the intention of owning for many years to come. I consider a property trader is somebody who purchases a property with the explicit intention to resell it for a profit in the short term. That could mean redecorate/renovate and resell it one month or six months later. But specifically they settle knowing they will sell again in the short term. If you purchased with the intention of selling at a profit in the short term, lets say 6 months time, then you certainly wouldn’t expect to fix your mortgage for say a 2 yr fixed rate, because you could be faced with a penalty being charged by the bank when you sold the house in 6 mths time. That is usually one clue that separates traders and long term investors. Another differentiation would be whether you have signed up a tenant for a long term fixed tenancy such as a one year term. A trader intending to on sell a property in say 6 months is unlikely to take on a fixed term tenancy for 1 yr.