Is It Too Late To Str?

[Annie]

Is it too late to STR? We bought our house around this time last year. We're getting estate agents in this week to give us some valuations on the place. We waited for years before buying, hoping for a HPC; should have waited a little longer I think .......

[Marcos Scriven]

Is it too late to STR? We bought our house around this time last year. We're getting estate agents in this week to give us some valuations on the place. We waited for years before buying, hoping for a HPC; should have waited a little longer I think .......

Why STR if you are happy and can afford the payments?

[Annie]

Why STR if you are happy and can afford the payments?

We're not entirely happy with the house. It's beautiful but small. We worked very hard to save a lot of money to put towards the house and would feel very sad to see our savings diminish with a hpc.

[yes]

We're not entirely happy with the house. It's beautiful but small. We worked very hard to save a lot of money to put towards the house and would feel very sad to see our savings diminish with a hpc.

But STR is expensive business - stamp duty (you have already paid it and will need to pay again when you buy later), brokerage, legal fee, surveyor, mortgage arrangement fee, etc. Plus the hassle. All in all, it needs to drop 10% or more to make it worthwhile (assuming rent = interest payment)

[Selling up]

Wow, Annie, this is a mess.

Just make sure you've really considered all issues around STR.

Transaction costs, hassle of moving, and what if the "crash" does come but is a slow Japanese-style fall over 10 years?

You might end up buying back in in 2 years out of frustration, and be virtually no better off after transaction costs.

Is it really worth it?

I sold to relocate, and decided to rent, but it sounds like you're doing it purely for market timing. And without being unsupportive, can I hint that I don't see any reason yet to be impressed with your market timing skills?

[Marcos Scriven]

But STR is expensive business - stamp duty (you have already paid it and will need to pay again when you buy later), brokerage, legal fee, surveyor, mortgage arrangement fee, etc. Plus the hassle. All in all, it needs to drop 10% or more to make it worthwhile (assuming rent = interest payment)

You can still benefit from falling prices AND keep your house. You have somewhere secrue to live. You are perfectly hedged.

So long as you can afford it, keep it. If prices do plummet, you'll be able to buy that 10 bed castle more easily.

Plus a few years paying off your mortgage will show you to be credit worthy, and it may be far more difficult to get a mortgage in the future.

[aussieboy]

Time to bore everyone again: never mess around with your primary residence.

[Confiteor]

Now is the time to really keep an eye on the number of new properties coming to market.

The herd mentality dictates that many people will now be thinking the same way as Annie.

Hell, I might be one of them!

[gravity always wins]

Why not take a punt it is the agent that will have to cough up the up front costs.

Yes it will cost a few quid to sell but it will cost a lot more if you stay put.

[Annie]

And without being unsupportive, can I hint that I don't see any reason yet to be impressed with your market timing skills?

You can indeed hint that my market timing skills are not impressive. We didn't just put a good deposit on this house, we put down 180k. Do you still think it's best to stay put?

[Marcos Scriven]

Why not take a punt it is the agent that will have to cough up the up front costs.

Yes it will cost a few quid to sell but it will cost a lot more if you stay put.

This isn't just some 'punt' - it's someone's home...

[gravity always wins]

Time to bore everyone again: never mess around with your primary residence.

Why? are they immune from price falls

Why is it acceptable to lose money if it is in a primary residence?

losing money is losing money which ever way you look at it I don't understand your logic

[Marcos Scriven]

You can indeed hint that my market timing skills are not impressive. We didn't just put a good deposit on this house, we put down 180k. Do you still think it's best to stay put?

Yes - as I say, you're in a perfect position. You have a low LTV and you can afford payments.

If this were BTL it might be different - but it's your home.

Even then, BTL is *still* a good long term investment.

[gravity always wins]

This isn't just some 'punt' - it's someone's home...

Don't be so sentimental

and read the original post properly and understand thier motives and then read my reply in CONTEXT

[Marcos Scriven]

Why? are they immune from price falls

Why is it acceptable to lose money if it is in a primary residence?

losing money is losing money which ever way you look at it I don't understand your logic

People like you always say that gains in the value of your property are not 'real'.

Now you turn around and say that the *falls* in the value of your property are real. You can't have it both ways.

I don't think now is a good time to buy, but I certainly wouldn't sell my one and only property, especially if it were also my home.

Apart from anything else, it's a perfect hedge.

And lets not forget, a *crash* is far from certain.

[It is different this time]

But STR is expensive business -

So is sitting on an overpriced asset.

Is it too late to STR?

If you are not entirely happy with the house & have some believe that HPC is on horizon you have the answer of your question. I bet the rent would probably be 30% less than what you are paying now. Do the math!

[Marcos Scriven]

Don't be so sentimental

and read the original post properly and understand thier motives and then read my reply in CONTEXT

I did read the original post, and responded - before you, in fact - which you'd have realised if *you* had read the thread.

I get sick to death of the old hacks on here - I'm with the overall theme that prices are too high, and will *probably* fall.

But I'm not with this militant crash crash crash, sell everything, anyone that owns a home is selfish and evil, all governments are lame, blah blah blah thing.

Edited September 17, 2007 by Marcos Scriven

[Annie]

I think we need to consider all costs of selling against the amount we might lose (which unfortunately is impossible to gauge). We would be prepared to rent for 5+ years.

[uncle_monty]

Why? are they immune from price falls

Why is it acceptable to lose money if it is in a primary residence?

losing money is losing money which ever way you look at it I don't understand your logic

In the same way that you haven't "made" any money from HPI until you sell, you haven't "lost" any money until you (are forced to) sell. It is nothing more than a mark-to-market.

Edited September 17, 2007 by uncle_monty

[meow]

So long as you can afford it, keep it. If prices do plummet, you'll be able to buy that 10 bed castle more easily.

I'm sure that comment was slightly tongue in cheek, but can you explain the reasoning of your basic premise, staying put after a (possibly big) drop allows you to trade up easier?

I'm not having a go, I'm just wondering what your logic is...

[Marcos Scriven]

I think we need to consider all costs of selling against the amount we might lose (which unfortunately is impossible to gauge). We would be prepared to rent for 5+ years.

I can't understand why you bought a small house you were unhappy with, when you're saying you'd be prepared to rent for 5 years?

If you want the upheaval of moving - potentially 4 or 5 times if landlords kick you out when your year-long contracts come to and end, for the *chance* that you might make a little more money, then do it. But that's the kind of speculation that people on here seem to contradict.

And look at what the people are saying here - if you followed their logic, everyone would sell their home now, as they are overpriced (mostly due to 'evil' or 'selfish' people - or 'sheeple', a word they all use, while acting like sheep themselves). Then you could go and rent - oh, you can't, everyone has sold... So now you can buy a house for 10p. Except you can't, because someone else bought them all for 5p, because they saw the market bottom out before you. And now everyone wants one, and they're going to sell it to you for 10 times more. So on and so forth.

It's a cycle. You are already in the cycle, why leave.

Edited September 17, 2007 by Marcos Scriven

[Marcos Scriven]

I'm sure that comment was slightly tongue in cheek, but can you explain the reasoning of your basic premise, staying put after a (possibly big) drop allows you to trade up easier?

I'm not having a go, I'm just wondering what your logic is...

Yes - if your 300k property become worth 150k, then that 600k property you actually wanted becomes worth 300k - therefore far more reachable to you.

Edited September 17, 2007 by Marcos Scriven

[Guest The_Oldie]

I did read the original post, and responded - before you, in fact - which you'd have realised if *you* had read the thread.

I get sick to death of the old hacks on here - I'm with the overall theme that prices are too high, and will *probably* fall.

But I'm not with this militant crash crash crash, sell everything, anyone that owns a home is selfish and evil, all governments are lame, blah blah blah thing.

I just think of it in cash terms. I didn't want a lot of cash tied up in a property that I believe will depreciate 30-40%, so I sold it and am renting.

To the OP, it may be too late to get top price now, but if you think that prices will fall appreciably and you're happy to rent for a few years it could be worth putting it on the market to see what transpires. Remember though, an offer is just that, you will need to wait for completion before you know if you've succeeded and I believe that we will see a lot of offers being revoked in the next few months.

[gravity always wins]

I did read the original post, and responded - before you, in fact - which you'd have realised if *you* had read the thread.

I get sick to death of the old hacks on here - I'm with the overall theme that prices are too high, and will *probably* fall.

But I'm not with this militant crash crash crash, sell everything, anyone that owns a home is selfish and evil, all governments are lame, blah blah blah thing.

YOU critisied MY reply to the original poster Chicken and egg Me thinks.

By the way have you not worked out what this website is about the clue is in the name.

[Orbital]

Don't be so sentimental

Yeah! And next week, how to sell your granny for profit...