Question For Srt`ers

[Guest horace]

I suppose this is a very subjective question, but can STR`ers indicte how their strategy is panning out? Did you sale too soon or too late? Additionally can you suggest the pitfalls to look for?

The reason I ask is that having `looked` around may garage I find it difficult to decide where I could reasonably store / use the years of accumulated bits and pieces. E.G. where would I store my DIY tools, gardening equipment and the stuff that may come in handy one day etc.

I have pondered this for a little while and I have concluded that the STR`er is a figment of the popular press and merely a fiction of this B/B especially if one has children of school age.

Curious.

horace.

[Kam]

I'm not an STR, but rented houses have garages and sheds too you know.

In fact my sisters rented house had all the garden tools included, think of the money saved on tools there.

Sounds like it was time you decluttered

Edited August 24, 2005 by Kam

[Time to raise the rents.]

Why don't you make it a poll that way it's anonymous.

[Boom'n'Bust]

Well I've STR'd, not because I wanted to make a profit, but because of personal problems within the area I was living in. I hope I didn't sell cheap, as the same property is selling at almost double the value I sold it at. But the good news is that I believe I sold it at the right time as that property has been on sale for 12 months and still hasn't sold

As for the renting, I lived in large property similar to the one I sold, so there was plenty of space. The only problem was that I had only a years contract, after which I left and now have moved to a much smaller property. Amazingley, I've managed to cram everything as this property may look small, but has many storage areas. Also school & local amenities are only a few yards away, so I'm well chuffed.

I believe that properties are still rising in bradford, albeit at a much slower pace and many more properties are on the market. Hence we are seeing what the south may have seen late last year which is a quick slowdown in INFLATION of house prices.

An honest answer would be that I was expecting a faster slowdown everywhere and also to see a crash begin by now, which so far hasn't happened as prices are still in the POSITIVE territory. The next few months will be interesting and hopefully we'll see the figures head into the NEGATIVE territory.

[Guest horace]

>> Kam

I am sorry to point this out but the question I asked is followed by a question mark.

Do you get my drift?

Please note the question mark, in the previous sentence, after the word drift.

horace.

Edited August 24, 2005 by horace

[IMupNorth]

Although not selling to rent, just sold and then couldn't find the right place and have now been renting for 14 months, I can honestly say I am at least £50k down on my position on the housing ladder in just 14 months.

All our friends just think we are stupid - so far they are right. I feel like a complete dick head.

My landlord bought this house for £104k in May 2004 - 3 doors up has just sold for £155k. Some price crash ?!

[Fingers Crossed]

I'm an 'accidental' STR. Sold last summer to relocate to a new area and was convinced house prices weren't going up and it was therefore safe to rent for a while to check out the area I was moving to.

Then I found HPC .

Now I'm waiting with my fingers crossed and prices seem to be dropping in my new area. Houses like the one I sold seem to have dropped 5-7% .

We just boxed up all our DIY stuff and haven't bothered unpacking it. I'm not missing it!

[Kam]

>> Kam

I am sorry to point this out but the question I asked is followed by a question mark.

Do you get my drift?

Please note the question mark, in the previous sentence, after the word drift.

horace.

<{POST_SNAPBACK}>

I did say I'm not an STR, so I have no way of answering your questions, I just make a comment on to storage thoughts, which would be exectly the same as they are now and so have no relevance to your questions.

[Guest Charlie The Tramp]

All our friends just think we are stupid - so far they are right. I feel like a complete dick head.

<{POST_SNAPBACK}>

Mid 2004 my neighbour had a valuation of 255k, decided to wait until he found exactly what he wanted. Six months ago finally found what he wanted and put his up for sale. Moved four weeks ago after excepting an offer of 235k.

[Portent]

I'm an accidental STR from 2003. We lost out a little when the property market rose in 2004 but since then we've definitely gained fast due to hard saving and interest. This has been helped by us not currently having any rent (staying with family). Overall we are definitely better off and getting more so every month.

[Smell the Fear]

STR "too early",

but am many miles ahead, because extracted equity was invested on various

mining shares which as a portfolio are several hundred percent ahead

+ There are better places to make money these days than property!

And my housing money buys more renting than owning.,

I now have a 3BR house instead of a small 2BR apartment

<{POST_SNAPBACK}>

STRed at the top. Mid 2004 in London. It took me 12 months to sell (Iraq war kick off killed the market in my experience), but I got the price I wanted in the end.

Proceeds are being invested in my re-education in a (relatively) globalisation proof career.

[jpjh]

STR Late 2003. Nothing has sold for more since in the same area. If I had bought this place instead of renting I'd be around 58,000 out of pocket due to costs and mortgage payments over rent money and decrease in houses on my street. On top of that the released equity was used to guarantee my business start up which is doing very nicely (finally moved into offices this week..yeehaa)

STR is not for the faint hearted though. Its a ballsy strategy and you have to be at least a little bit long term to get anywhere.

Regards storing stuff...most of mine is in parents garage or at a lock n store and some in the landlords shed. To be honest won't need any of it till we move out and need to touch up damage where we have hung stuff or 3 year old son has decorated.

On top of all that we have a baby due this year just before christmas, so renting with family in tow is completely possible and don't really understand the issues.

Given the choices I would rather have my business up and running than the worry of owning my own home at the moment.

[Tim M]

Sold January 2004. House was 1/3 equity, 2/3 mortgage. Main reason for selling was unsuitability of house for our family circumstances (i.e. we decided to sell when my wife got pregnant with our second child), but felt that although it was an excellent time to sell our place, it was a terrible time to buy back in.

So far, positives are -

+ Not paying an oppresive mortgage

+ Getting good return on the portion of the equity we released and put into fixed interest at 5.7%

+ Getting excellent return on the remainder of our equity we placed in mining, oil and gold stocks.

+ Renting a house that is literally twice the size (and value) of the one we owned. This includes double garage and large separate workshop for my DIY kit.

+ Rent is a bit less than our old mortgage.

+ The peace of mind that comes from knowing you have a chunk of money in the bank, your rent paid in advance for the year and absolutely zero debt. I do not wish to go back to the days when I lost sleep at nights thinking about how we were going to service a horrendous mortgage when interest rates went up.

+ Lack of financial stress means that my wife is not pressured to go back to work and instead she can stay home and take care of our 2 young children.

+ Not having to do the garden or mow the lawns (it's included in the rent)

Negatives are

- Local property market has stayed stronger than expected, although most other parts of the country (Australia) are in decline.

- We have moved twice in less than two years and it is a pain. If you STR make sure you find a good place to rent and lock in an option to rent for more than 1 year.

- Having to have rental inspections every few months

- not being able to have a dog

[Mr Tickle]

We str'd due to wanting to move, couldn't find what we wanted (lost real nice place) so decided to rent instead, felt prices were way way OTT, in Feb 2005.

So far acculalated interest is 5K ish, + houses in our 'range' have fell approx 25K .... so I guess that makes me 30K up in 6 months ......

When we were looking for rentals, we had a job to find anywhere big enouge for all the accumalated guff.

However storage is very expensive so we decided to spend an extra £100 a month on the rent and have everything to hand, we have a really nice 4 bed detached house, double garage, quiet location, beautiful views, complete with garden ...... bigger than the last house.

I dont regret my position at ALL.

In fact renting gives you a weird sense of freedom that i've not felt for many years.

2.4 children btw

[Gavin]

I have posted a few times on this subject so will try not to bore.

STR Nov 2003. It took nearly a year to sell therefore I am not convinced we could have waited any longer. 2 separate friends have had their houses on the market for more than a year now with no interest.

At first we planned to downsize to bring down our mortgage. It was only when we refused to pay the prices being asked that we became true STRs and realised the fundamental imbalance in prices.

The money in the bank is as good as everyone else says, such a huge relief and still is. We used to have a mortgage that we just couldn't imagine being a slave to for 24 more years.

THe freedom allowed us to spend a year travelling. I am such a different person now its difficult to quantify what that meant, so I would just say it was priceless.

Back now in a great house that has more room than we need. Moving all the stuff is a pain but once its done it falls from memory. We want to stay here more than a year if necessary and it was an important consideration when choosing a place to rent. We have a garage and workshop in this property, although being organised with DIY tools is below self-mutilation on my 'must do' list.

We would have been much better off if we hadn't travelled financially, as we didn't earn for a year, and spent money. However I think of this as a totally separate issue. and separate choice. Its only link is with the freedom gained by STRing.

The last thing to consider is ridicule. My family are now seeing the merits in my decision, although they had many worries about not only stepping off the ladder but life itself, as going against the grain is very hippielike.

Many of our friends keep asking the same questions because they are all owner occupiers, some ask about whether prices have dropped yet and laugh. I learnt ages ago to smile and say nothing. The time lag involved will convince many who watch what happens that we sold too early or it wasn't worth it. In my old postcode prices have dropped 5.6% in the last qtr. This amount alone would have paid for our year long trip. We all have to make our decisions in life and we are very pleased with ours.

When considering the 'hassle' of STRing, I would say it takes maybe 50 man hours to box everything, move and de-box. If you can earn more than 30% of your house value in 50 hours of work I would advise you not to STR. Don't forget, you might get the chance to drive a van, which for me is an unexpected pleasure.

[Ignorant Steve]

STR June 2005.

I chose as part of the strategy to rent a very comfortable house and pay £2000 per month more than my previous mortgage. (We now rent a 4 bed house whereas before we had a 2 bed flat). No storage problems.

Not clever/brave enough to do anything with the equity extracted other than cash savings.

I've budgetted to spend £50K whilst waiting for the right house. At the moment very few houses are selling in my target area / price range. Not many price reductions yet either and very few new properties coming onto the market. If prices fall 10% I'll make a few thousand.

[justanewbie]

I STR'd in Feb.... completed sale in March.

It has been entirely satisfactory, because I managed

to do it just at the right time, partly due to my own

foresight but thanks also to my tenants who chose

to quit and buy at precisely the worst possible moment in the

present housing cycle.

The property I sold has gone down by 5-8%, if it could be

sold at all in the present situation.

Had I also been brave enough to buy shares, I would have

made at least 10% on the cash, over the past four months,

but shares is all new to me.

It is now rather late to STR, but worth a try.

The main thing about buying and selling is being quick on

your feet and travelling light.

Looking at stuff in the garage and pondering what to do

is perhaps not the best way to start the process.

Hire a skip and be gone with it - you don't need it.

I am looking at properties but only making very, very low

offers on properties which are already on the low side of

reasonable.

[hra]

STR-ed summer last year (2 simultaneous property disposals - a home and an investment property).

Very happy with the decision, not only financially (especially in the case of the investment property). Other positives are:

- Not having to worry about maintenance in new home.

- Not having any responsibility for leasehold property issues e.g. dealing with in residents' association / management company, leasehold extension etc.

- Having an exit strategy if things go unexpectedly wrong

- Being chain free, in a much stronger position if and when I do buy again.

The (few) downsides are

- Worry when tenancy renewal came up - the exit strategy can work both ways

- No real freedom to change decorations though this is only a very minor issue

- Constant temptation to get back into the market too early.

Re. de-cluttering, disposal of DIY, garden stuff, I found the following useful

- Furniture recycling charities, will take practically anything

- Local allotment society, again for garden things you are prepared to give away

- Rental storage, can work out cheaper than renting a larger property just to house your spare equipment and furniture

- Limited use of garage space, loft space and spare kitchen cupboard space possible in new property.

Edited August 25, 2005 by hra

[Homebird]

I dont regret my position at ALL.

In fact renting gives you a weird sense of freedom that i've not felt for many years.

<{POST_SNAPBACK}>

Absolutely, would wholeheartedly agree with that, and many other posts on this thread.STR last quarter 2003/2004.House had doubled in value.Positives :

- Being out of home-owner bracket, people stopped discussing it once the initial raised eyebrow and 'you'll need to get back in ASAP!' stage had passed.I'd got sick of the property obsession + ''how much our house is 'worth' '' c@ap

- Profits rising in value

- Has allowed freedom that would never have been possible as a homeowner (re-location; better choice of accomodation; change of career)

Now waiting to see what happens, with a view to buying maybe in 2007/8.

Edited August 25, 2005 by Homebird

[newaccount99]

If I had STR'd on the grounds of profit or Mrs BTLOptingOut wasn't fully behind it or I had kids....I would be one unhappy bunny now.

Sold in March '04 which was pretty much the peak in this area......If I sold now it probably wouldn't be much off that peak maybe a few £k, though securing the deal would probably be tough.

On the plus side my current job is currently insecure and knowing that I don't have mortgage but a decent cash pot is very re-assuring. Also as a no chain prospective purchaser I am in a great position to negotiate when/should I decide to buy but will hold off for another couple of years.

Would I do it again? Only if a move was on the cards anyway.

[Catch22]

Sold 5th March 2005, completed 1st July 2005 with the intention of down sizing to capitalise on the silly valuations, as we are after all nearer 60 than 50....bugger But refused to pay silly over valued prices, so then decided it could make even better financial sense to sit out the coming correction.

Have since found a very nice rental 3 bed and garage, only two of us so it’s fine, I even have a bigger office since we moved. We love the house and would buy it if it was for sale when the correction had done its work. But for now we are very happy to sit the correction out for a few years. Had no mortgage so it’s all invest mostly to cash right now [coward]

Gone from a 4 bed detached to a 3 bed town house, so had a bit of a de clutter, like all that stuff up in the loft since our last move. Every thing else is in the house or in the garage.

Price wise, according to Land Reg figures April to June are our area “Detached” +2.1% Quarter +10.9% Annual. So reckon we timed it just right [but only time will tell on that one] No similar houses have sold in our area since we sold. We under cut the overpriced stagnant market by 10% and got our asking. Over priced asking in our area is now 10K below what we achieved but not attracting offers.

Plus points:

Good feeling being out of this market

Making more interest than rent is costing

Prices dropping, all be it slowly, but that is the nature of house market corrections.

When/if this market corrects, we will be able to act quickly as cash buyers unhindered by a chain. At market bottoms selling your existing house is a hinderance to doing a "good deal"

Realize we did not need all that clutter, all that space, all that cleaning, all that maintenance, and all that gardening, and all those "flared trousers"

Proved this house size would not be a bad move, after all.

Bad points:

On occasion I get it in the ear as the wife still feels insecure not having the security of a “depreciating asset”[ first time renting in 37 years of house ownership] “its not hers” is the issue, a women thing I think. That said, that’s it right now, of course if I’ve called it wrong I’ll have to invest in a caste iron cod piece rather sharpish.

Personally it was right for us, but would not like to work out the trade off/ risk associated with a family upset if you have children and a not so sure partner. But for anyone not commited to this market I reckon its a "no brainer " staying out of it right now.

Edited August 25, 2005 by Catch22

[Marina]

STRed Dec 2003. Took a couple of months to hook a buyer. Had to drop 25k to get it away (admittedly did start out at a bit of a silly price).

Think the top of the market in my neck of the woods was Spring 2003. After that everthing seemed at daft prices and you could sense things were taking longer to shift.

STRed on purpose because we were going to move to the West Country. Then school my eldest son was going to go to refused to take him as he was too near his O levels.

I STRed in the last crash so saw an opportunity to get out for a while and buy back in later at a lower price.

So far I believe I could buy something similar to the property I sold for maybe 40k to 50k less.

Money from the house sale is in the bank - don't want to gamble this money - prefer to play it safe. Other investments provide enough income to sort of half live on. So I don't have to work much now.

Would love it if Dr Bubb would post on here every day and tell us what to do! I'd even subscribe if there is money to be made.

Money in the bank from the house sale pays rent on a nice 4 bed house - so no storage issues - plus a couple of holidays a year.

I like renting on the whole although obviously it has drawbacks. I like the freedom - the lack of DIY - the sense that if you decide to do something else you haven't got a property millstone round your neck.

Landlord said recently he wanted the property back - bit of a nuisance - but, as someone else said, 50 hours packing and off you go. In my case never unpacked the garage last time - so all still in boxes. Only room with anything much in is my study. I reckon one day with the four of us mucking in will move us. Renting a slightly bigger house on the next estate for the same money.

What next? Have to say I am turning a bit bullish on the property market. So I am now looking for 'opportunities'. I have made money from doing up properties all my life. But, not really sure - still think things could go either way. Almost certainly wait until after the Autumn to see which way the wind is blowing then. Think a sharp correction is still the most likely outcome but would not be surprised if we just had a long period of stagnation with slowly falling prices. In a market like that you can still make money from the right property - you just have to make sure you are not relying on HPI to kid yourself you made money.

Edited August 25, 2005 by Marina

[Red Baron]

STRd Q4 2003.

Have never regretted it especially as the house I sold has subsequently re-sold for 9% less. I rent a very comfortable house for considerably less than the cost of buying it and my equity has been released for investment in profitable areas.

Upside for me? Probably £50K plus. Will I buy back into the property market? Probably, but only when prices are sensible. If not I will carry on renting and employ my money more usefully.

[Dames]

STR'd in Mar '05.

As it happens we got £10k more than what we had bugeted for , but this is only due to my opinions and figures I was working on at the time for our selfbuild.

Came away with £70k , which is now £30k P/bonds , £37k cash , £3k shares.

Cost already paid - which were about £2.7k in total .

Give or take we are even , ( without of course getting excel going and calculating the interest made so far ).

Personally I'm happy to sit here and wait to see what happens , while I add to the pot each mth which should give around £100k in about 3yrs .

Health willing of course.

D

[rainbow]

STR mid 2003, not something we really planned, but we had moved house 18 months earlier and found that we disliked both the house and the area, and we had the opportunity to take a very nice profit, so we decided to STR.

This wasn't new to us as we had done it twice before.

Financially it seemed we had sold a bit too early because shortly after we sold, Merv cut the rate to 3.50% (something I think he has regretted ever since), but it makes it easier when you dislike the thing that you sold. Our cash equity out of the house more than covers the rent and the stuff we put in storage, in fact we are getting paid a £100 a week to live here from the interest.

We have been here over 2 years now, and the landlady has just decided to market the place, which we really don't mind as we are ready to move on.

As far as financial loss or gain, I think we would have lost if for some reason we had been forced to buy back in in the first year. Looking in our old area now (East Sussex) we could probably buy back in the type of house but in a better street for about 5 to 10% less.

But we find now the difficulty is commiting to anything regarding property purchase, for people of our age once you cut the anchor away and start drifting you get to enjoy it too much. We pick up the map and say "Shall we try it here or shall we try it there?"

Our son has his own house and was talking about STRing about a year ago, he didn't bother and now the estate where he is, is littered with properties for sale, and he has probably missed the boat. Still he has 2 small children, so it would probably be a different ballgame for him.