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Downside

Not Everyone Makes A Profit On Housing

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As mentioned in one of my previous post one of the guys at work is buying a place with his partner using the money from his parents as a deposit. Turns out they are now buying a place owned by his partners parents.

From what i've been told and checked for myself the place was bought by the parents and the parents friend split 50/50. It was bought for 104k in 2011 and they are selling it to the guy at work and his partner for 90k. The parents are taking the full hit of the loss and the friend is getting their half of the money back. The place was being rented out and the tenant has now had to vacate (i've no idea how much is was being rented for).

But still its quite a loss for the parents, they spun it as being an early inheritance. So not only have they stumped up the deposit they've sold the place at a loss as well. Apparently they are also selling their main residence and moving to cornwall.

Shows how bad it is though when they have to stump up the deposit and sell the place for less than they bought just to house their child.

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I am the first to admit I lost on property.

We bought a run down Victorian terrace in 2006 for £127k, then spent ~13k refurbishing it ourselves over 4 years then sold it for £115k.

So a £25k loss (+£1k selling fees) for us on our first house - luckily we can afford to take such a relatively small loss, I know most people cannot hence the requirement for perpetual HPI.

It turns out that we can rent much nicer houses than we could afford to buy.

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Yeah its rare you hear about people losing money on housing as people only ever talk about all the money they made on it. Although this isn't directly from the sellers mouth so they may spin it a different way.

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I think that most people do not have the money to lose on property, so they lock in the loss by never moving again. It's usually only those who are repossessed who you hear about.

I heard plenty of tales in Ireland where people had lost €100k's

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Yeah its rare you hear about people losing money on housing as people only ever talk about all the money they made on it. Although this isn't directly from the sellers mouth so they may spin it a different way.

I record bought and sold prices in my desirable coastal patch, and I've got dozens of houses and most particularly flats/apartments where the purchaser resold at a loss. Flats over the last 6 years regularly show losses.

It's like people who use the bookies a lot. They don't talk about their losses.

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As mentioned in one of my previous post one of the guys at work is buying a place with his partner using the money from his parents as a deposit. Turns out they are now buying a place owned by his partners parents.

From what i've been told and checked for myself the place was bought by the parents and the parents friend split 50/50. It was bought for 104k in 2011 and they are selling it to the guy at work and his partner for 90k. The parents are taking the full hit of the loss and the friend is getting their half of the money back. The place was being rented out and the tenant has now had to vacate (i've no idea how much is was being rented for).

But still its quite a loss for the parents, they spun it as being an early inheritance. So not only have they stumped up the deposit they've sold the place at a loss as well. Apparently they are also selling their main residence and moving to cornwall.

Shows how bad it is though when they have to stump up the deposit and sell the place for less than they bought just to house their child.

Is it possible it is not really a loss but a tax efficient way of avoiding inheritance tax?

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