The most frustrating part of my role as a financial coach: When property stops being an investment and becomes a trap

The most frustrating part of my job is one I see time and time again. It’s not when the numbers don’t stack up, those are relatively easy conversations. It’s the pause that comes after I explain, calmly and clearly, that selling down would probably make someone’s life better.

• More cash flow.

• Less stress.

• Fewer sleepless nights.

• More optionality.

And yet… they can’t do it.

Not because they don’t understand. But because they can’t face what selling means.

The most frustrating part of my job isn’t analysing property portfolios. It’s watching intelligent, capable people stay stuck long after property has stopped serving them. Why? Because property has quietly become their identity.

Case study: when holding on costs more than letting go

Just today I was reminded how hard this can be. Wendy (not her real name) was referred to me by an existing client. She’s been a property investor and small scale developer for more than 25 years and owns a portfolio of seven properties in the South East.

For the first fifteen years, everything ticked along nicely. And then came 2016. The combination of tax changes for landlords, the Brexit vote and higher stamp duty on second homes and overseas buyers took the wind out of the market. In many areas of the UK values still haven’t returned to their pre 2016 levels.

Like so many property investors, myself included, Wendy didn’t react in time. She held on. She had an almost unquestioned faith that property would always come good.

It was all she knew.

It was all her father knew.

And it was all her grandfather knew too.

Safe as houses.

On paper Wendy is still “wealthy”. She values her portfolio at around £2.5 million. All the properties are rented, but two are now unmortgageable due to circumstances outside her control. She’s owned them for a long time in her own name which means they’re carrying significant capital gains tax exposure.

If Wendy sold the portfolio today she’d face a CGT bill of around £235,000.

She’s behind on mortgage payments. Several of the properties are in a poor state of repair. Cash flow is tight and when we modelled the numbers properly rents, mortgages and ongoing costs (let’s not even start on paying herself for her time) we discovered something quietly devastating.

On a couple of the flats Wendy is effectively subsidising her tenants. She’s paying more each month than she’s able to receive in rent, given the condition of the properties and the local market. On another two she’s making around £20 a month.

So I asked her a hypothetical question. What if I could take away all the properties, hand her £1 million in cash and give her a sustainable pre tax income of £50,000 a year (gradually reducing the tax bill over time as we rebuilt her position through pensions and ISAs)?

Her answer was immediate, of course. She said she would jump at it. It sounded like a dream.

No banks chasing her.

No tenant emergencies.

No weekends spent painting, patching things up, or calling in favours from trades to deal with urgent repairs.

I told her that, in reality she could have something very close to that outcome. But it would mean selling the properties at auction. That was the moment everything stopped. She messaged me today to say she couldn’t do it. She didn’t have the headspace. It was just too much to face.

And that, far more than the tax, or the valuations, or the spreadsheets, is what keeps people stuck.

When an asset class becomes a sense of self

For many people property isn’t just something they own. It’s who they are.

They are “a property person”.

A landlord.

A developer.

An investor.

Property is tangible. It represents competence, success, proof that they got it right. It’s dinner party shorthand for being sensible, savvy, grown up. For some it’s the thing that finally made them feel secure after years of uncertainty.

So when the market changes, or interest rates rise, or yields compress, or portfolios become unwieldy, the problem isn’t the spreadsheet. The problem is existential. Because if property no longer works… then what does that say about them?

The fear isn’t loss — it’s finality

The excuse most people give for not wanting to follow my guidance is that they’re worried about crystallising losses. But that’s rarely the real fear. Losses can be explained away. Markets move. Timing was off. Bad luck happens. What’s harder to face is finality.

Selling means:

• Accepting that a chapter is over

• Letting go of the story they’ve told themselves (and others)

• Acknowledging that something which once worked… doesn’t anymore

There’s grief in that. Real grief. Especially for people who were taught, explicitly or implicitly, that property was the answer. The one path. The sensible path. The only path worth taking seriously. If you’ve spent twenty years reinforcing that belief pivoting doesn’t feel strategic. It feels like betrayal. A loss of self.

CGT, valuations, and the stories we tell ourselves

Capital Gains Tax is rarely the real issue either. Granted, nobody likes paying tax. Yes, valuations can feel brutal when they don’t match expectations. (And who doesn’t believe their home is worth more than it is?) But underneath the spreadsheets is something far more uncomfortable: the collision between reality and the story.

The valuation doesn’t just price the asset, it prices the dream.

And when that number comes in lower than hoped or when CGT eats into the “win” it forces a reckoning: Was this all worth it? That’s a question many people would rather avoid indefinitely than answer honestly. So they hold on. They refinance. They reshuffle. They wait for “the next cycle”. All while life quietly passes by.

I know this because I was there too

I don’t write any of this from a distance. I’ve been the person who couldn’t let go. I built my identity in property. It gave me confidence, status and a sense of mastery. It rewarded me for being bold, decisive, relentless. For a long time, it worked and it worked well.

So when things shifted, my first instinct wasn’t curiosity. It was resistance. I didn’t want to accept that what had built my wealth might not be what protected it. Or sustained it. Or supported the life I actually wanted to live. Letting go wasn’t a tactical decision. It was a psychological one. And it came with grief, ego and a deep sense of uncertainty. But it also came with something else - relief.

When holding on costs more than selling

There’s a point, and many people pass it without noticing, where holding on becomes more expensive than selling. Not financially. Emotionally.

• Constant mental load.

• Low-grade anxiety.

• A portfolio that dictates decisions instead of supporting them.

• A sense of being trapped by something that was meant to create freedom.

I see people designing their lives around their properties instead of the other way around. Holidays postponed. Risk avoided. Opportunities ignored. Energy drained. All to protect something that no longer fits. That’s not investing. That’s captivity.

Property is not the enemy, rigidity is

Let me be clear, I am not anti property. Property is a powerful asset class. It builds wealth. It can create stability. It has a place in many portfolios. But property is not meant to be a religion. The problem isn’t property. It’s rigidity. The inability to evolve. The refusal to reassess. The fear of having to start over again. Wealth maturity isn’t about how much you own, it’s about how freely you can change your mind.

The quiet freedom on the other side

The people who do sell, who let go thoughtfully and intentionally, often say something unexpected, well, to themselves not to me. Not “I wish I’d done it sooner” (though many do). But “I didn’t realise how heavy it had all become.” The relief isn’t just financial. It’s psychological. They rediscover choice. They regain mental space. They stop managing assets and start designing lives again. And perhaps most importantly, they learn that their worth was never in the bricks. It was always in their judgement.

Back to Wendy it pains me that during the hours we worked together she spoke of how this was her burden and how as a third generation landlord she didn’t want her daughter to be the fourth. Her daughter constantly complains about how poor they are and yet she’s sitting on £1 million and freedom from the daily stress she carries.

A question worth sitting with

At some point, every investor faces this question whether they articulate it or not: Am I holding this because it serves my life… or because I don’t know who I am without it? There’s no universal right answer. But avoiding the question altogether is how investments quietly become traps. And freedom slips away, one rationalisation at a time.

If this resonated it might be worth understanding where you really are.

I’ve created a private Prosperity Profile. a short, reflective snapshot designed to show how your wealth is currently supporting your life… and where it may no longer be.

No judgement. No sales pitch. Just clarity.

Take the Prosperity Profile here.