subject: Property Investment Tips - Selling Your Main Home And Pocketing The Proceeds [print this page] This method of property investment is the famous 'downsizing' that older people are increasingly choosing to do when the family has grown up and gone, and the big house and garden are no longer needed.
Pros: By downsizing, you get your hands on a large lump sum you can use how you like. By choosing this option, you avoid all costs, fees and complications. There is also nobody to take your money off you, such as fund managers or other financial advisers, and nobody is making any money out of you either. You become a totally free, financially independent individual, living like the camel, off your hump. The huge hike in property values in recent years has enabled ever more people to take advantage of this simple option.
Cons: Can there possibly be any cons to this option? Yes, just a few. In the first place, the fabulous lump sum you have in the bank is extremely vulnerable to the taxman. You will not only pay tax on the interest received, but in effect, your capital will lose value just sitting in the bank.
Then, with 'unwrapped' money, you will also have to pay your full whack of inheritance tax on your estate - or your executors will - when you die. As you never know how long you have to live, or what care you may require in later years, it is hard to budget for having just enough to last you out - a financial planning difficulty that has not escaped the taxman.
