Bruce Banner Posted July 11, 2012 Share Posted July 11, 2012 That's the difference between the two camps, isn't it? One see's a house as an asset, the other as a home. Of course, some of us (I'm looking at you Bruce!) have fallen on on our feet, but in my experience, the majority out there in the big bad world have not. I would add that we're talking about STR'ing here, so presumably the home was bought when prices were sensible. FTB' in today's market? Take Mr Banner's oft repeated advice I see a house as a home. At the moment I choose to rent my home. I don't know about falling on our feet, I tend to adopt what I consider to be a very risk averse strategy, due to being retired. By the way, I fully understand why you bought, you explained the real reason a few weeks ago in another thread and it makes perfect sense . Quote Link to comment Share on other sites More sharing options...
porca misèria Posted July 11, 2012 Share Posted July 11, 2012 If you own a house outright aren't you gambling on property prices, sterling and the UK? Not really. But you are gambling on the risk of a disaster, and your insurance cover if something seriously bad happens. Quote Link to comment Share on other sites More sharing options...
AThirdWay Posted July 11, 2012 Share Posted July 11, 2012 A Third Way - you do talk some rot. The urbanisation is due to happen - I have STR'ed, reading is obviously not a strong point. House Price Inflation is the issue, and it is not happening. Sh1thole - if it was, I would not live here. If people took time and read what you said, it would look like the nonsense it is. Yes, you too can make things up. You posted that you rented "in an area that was once a nice village". What else was I to infer from that statement? My question was valid. Not so, now that you've changed your opinion on the village My point was, if your home is about to be compromised, you usually have plenty of time to up-sticks and move. Contracts can be exchanged in a very short time, long before it become's public knowledge that urbanisation is on it's way. It's more hassle if your selling rather than moving from one rental to another, agreed, but if you've bought a home your happy in then you shouldn't be forced to move very often, if at all. How about you address my other points, on the disadvantages of renting and the morality of making money out of bull and bear markets? Quote Link to comment Share on other sites More sharing options...
AThirdWay Posted July 11, 2012 Share Posted July 11, 2012 I see a house as a home. At the moment I choose to rent my home. I don't know about falling on our feet, I tend to adopt what I consider to be a very risk averse strategy, due to being retired. By the way, I fully understand why you bought, you explained the real reason a few weeks ago in another thread and it makes perfect sense . And I understand why you rent. When I mentioned falling on your feet, I meant that you seem to have the bestest LL ever. Re-reading my post, that wasn't obvious Your in a minority in that respect, in my experience. As I've posted before, horses for courses! Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted July 11, 2012 Share Posted July 11, 2012 And I understand why you rent. When I mentioned falling on your feet, I meant that you seem to have the bestest LL ever. Re-reading my post, that wasn't obvious Your in a minority in that respect, in my experience. As I've posted before, horses for courses! That may change next year as the wife is hankering for a move to a different area . Perhaps we'll ditch having a permanent rental house that we only live in for four or five months of the year and save six or seven grand a year, although having a permanent base is convenient, even if we're not there for most of the year. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted July 12, 2012 Share Posted July 12, 2012 (edited) First rule of gambling is don't gamble what you can't afford to lose. STR is a gamble, pure and simple. If you can afford to lose the cash then all good. For most people they would be gambling with literally everything they have ever managed to save. Thats insanity. Got to say our equity has done much better in the past six years when in STR mode. Three years out/ three years owning. The fact houses have drifted down 20% and savings could have gained about 30% even in the safest of portfolios (fixed rate bonds hit 7% at the end of 2007 on five year deals) has been an irresistable draw to those that considered STR. Just given up the rent of approx. £4,000 per annum for a £242,500 purchase. Dead money involved in transaction year 1 ( Solicitor, surveyor, disbursements 1755, stamp duty 2425, removal 55, lost investment income at 3.5% net 8488, projected loss in value of home say -2% on Haliwide index 4850, depreciation/delapidations at 2% 4850, furniture 3500) Total cost of home ownership year 1 =£25923 or about six years rent. Not like for like because we are comparing a flat to a premium detached, but renting is all about small and freedom, not maintaining the landlord's half acre garden. I agree it is comforting to have something concrete as opposed to digits on a screen in compensation for 65 years aggregate work so far put in by me and my girlfriend(always a worry those digits could implode Weimar style). But as bears we have kept most in cash and shares even now. You don't live for ever and you have got to view a home purchase like a car something that will lose you money, but money is there to be spent you can't take it with you. Not really rocket science that renting is better with the shocking outlook for house price growth if you are looking at it from a purely monetary perspective, I reckon about 5% HPI growth is required to off-set the extra costs of home ownership. I would be surprised if we got close to that. Edited July 12, 2012 by crashmonitor Quote Link to comment Share on other sites More sharing options...
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