Jump to content
House Price Crash Forum
Sign in to follow this  
Wurzel Of Highbridge

Property As An Investment.

Recommended Posts

If you have some money these days on a cash basis the best return you can get is by buying a property to live in.

Strikes me as a bit odd that there are few (or no) better investments for the average person than just buying a square of land with a pile of bricks on it, that essentially is just shelter and no other economic benefit.

Essentially buying property is just a big hedge against LAND inflation as the actual building will be fairly worthless after 100 years if well maintained.

In the distant past 1900's, 1920's, 1950's, 1960's where there better performing assets than property?

It it just the fact that property sucks up all the wealth as economies get richer?

Can property continually outperform the real economy?

Share this post


Link to post
Share on other sites

If you have some money these days on a cash basis the best return you can get is by buying a property to live in.

Strikes me as a bit odd that there are few (or no) better investments for the average person than just buying a square of land with a pile of bricks on it, that essentially is just shelter and no other economic benefit.

Essentially buying property is just a big hedge against LAND inflation as the actual building will be fairly worthless after 100 years if well maintained.

In the distant past 1900's, 1920's, 1950's, 1960's where there better performing assets than property?

It it just the fact that property sucks up all the wealth as economies get richer?

Can property continually outperform the real economy?

See the third graph in this post:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=192400&view=findpost&p=909371511

Outside of the South of England and ignoring the advantages of leverage property has been a dismal investment over the last 20 years. It's all down to leverage, property is usually bought with debt and with continued inflation leverage is your friend - ordinary people can't buy 100 grand's worth of the FTSE by borrowing from the bank. If you could, and you did that in 1995 you'd be far richer now than if you'd bought a measly house in Newcastle.

Also the UK is a bit of a special case. Adjusted for inflation, houses in the USA, outside of a handful of metropolitan areas, are about the same price that they were 40 years ago.

Share this post


Link to post
Share on other sites

Reading some Keynes at the minute and he mentions there was an on going argument between economists whether property was an investment or consumption. Although I'm not certain if "property" then has the same meaning as now.

Share this post


Link to post
Share on other sites

I can't generalise to everywhere and anywhere, but my grandfather inherited some properties ( which he rented out) from his mother around 1920, they consistently cost rather than made money for 40 years until 1960 when my (by then widowed) grandmother sold them for pretty much peanuts. As a result my mother always used to say that property was expensive to maintain and avoided it in favour of pretty much everything else.

Obviously the picture changed post 1960 and the timing of the sales was bad (or rather, terrible!!), but the fact that for 40 years of the last century it was not the place to have your money is a warning to those who think that BTL is always a one way bet.

Edited by bajista

Share this post


Link to post
Share on other sites

I can't generalise to everywhere and anywhere, but my grandfather inherited some properties ( which he rented out) from his mother around 1920, they consistently cost rather than made money for 40 years until 1960 when my (by then widowed) grandmother sold them for pretty much peanuts. As a result my mother always used to say that property was expensive to maintain and avoided it in favour of pretty much everything else.

Obviously the picture changed post 1960 and the timing of the sales was bad (or rather, terrible!!), but the fact that for 40 years of the last century it was not the place to have your money is a warning to those who think that BTL is always a one way bet.

both my grandfathers had similar experinces and viewed property the same way and thought of them as a liability. ASTs changed all of that

Share this post


Link to post
Share on other sites

Quite,

I am going off the idea of buying since renting here is quite cheap and I don't make regular trips to B&Q etc of have to worry about the house or job security so much. You could say that I am enjoying renting.

I was thinking about investing the money we have instead, but really want to cover as much of the rent as possible. I feel that shares are overpriced and ill manipulated investment pumped with QE.

For security reasons I don't want to hold much more physical PM's but am considering hedging against inflation by using Bullion vault with 'some' money, Gols is looking repetitively safe from large declines IMO.

What percentage return / yield could you expect on a reasonable safe investment. Something where return of my capital is a high probability unless the world ends etc.

Anyone using ZOPA these days? The return looks around 4% which would almost cover the rent.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.