Property

I've had the same thoughts, but it just isn't a sensible thing to do in the current market, especially since you're mortgage free. Years back when interest rates were say 12% it was a cool move but as things are I can't see there being any substantial rises for the next few years at least.

I sold a property in west London about two years ago and as the share markets were unstable I just stashed the cash in a high interest account, I regret it though now and have since put that money into another property. If I had done that two years ago I could have bought two properties round here for the same money. Property here has risen by 56% in the last year alone and the property I bought 6 months ago has made £20,000 in that 6 months.

You'd be better off renting out your house and tavelling on the cheap with your rental income, at least you'd have somewhere to return to and if you fancied then moving off somewhere else, you'd have made substantial profits.

IMO property is still the best invesment short term but long term shares will probably win. The share market is starting to move again now and profits can be made.

Working in IT seems to me the perfect job for those wishing to work from home or from a sunlounger on a sunny beach, surely it's just a case of finding the right company to satisfy those needs, or indeed go it alone if you've got the skills and know how. I've never worked in IT so I've no experience there. A friend of mine does though and his business can be operated from anywhere in the world, his profits are increasing at a rapid rate too, as the net gets busier.

As for themadhippys comments, I would disagree as I've been of that mind set myself in the past, infact most of my close friends are madhippys and live in Tipi's and other structures, they don't even want to live in a house. They will freely admit to me though, that if they could have done thing's my way, they would quite happily live in a house like mine.

Anyway just my thoughts so no need for anyone to get upset

Best regards

Barnie
http://www.barnies-place.co.uk/

 

Only just caught onto this thread...
Own a (very modest) house on South Coast, worth more than I can believe..
Know many people who can either not afford even a deposit on the cheapest pad of their own, or have gone down the self certification route... scares the hell out of me...
Takes me the best part of an hour to drive 18 miles to work.
Paying more in tax than I ever did. But strangely, income tax rate is lower than for ages.
Fuel bills have gone up 30% in last two years.
Gonna start having my pension fund dividends taxed.
Gonna have another X million refugees livin' on my doorstep (please don't get this wrong, I mean in the UK).
Gonna have to pay for those X million refugees.
Gonna have start paying to drive along the roads it takes me an hour to get 18 miles on.
No new roads or road improvements along the South Coast.
Council tax up more than 10% every year since I can remember.
Won't be able to afford a real education for my kids.
Definitely won't be able to afford a Uni education for my kids.
Pay a load in NI, but probably won't get a pension, will have to wait years for my op should I ever get really ill, can't get a dentist

Holy cow, how depressing.

Oh, maybe not....look what i found:

http://www.immi.gov.au

Will be posting my forms this week!!!!

At least it'll be sunny.

 

This is uttered quite frequently, but unless you either rent a 6 bedroom villa, or plan to buy a 15sqft bedsit, i simply can't see how it can be true. Of course, it is more likely, if you plan to get an interest only mortgage, but i'm not entirely sure how great they are.

 

Cookie

I rent two properties at £500.00 pm each.

The value for each of them is circa £125,000.00

Therefore the Tenants could take out a 100% loan at say 4.5% and on repayment only, this would equate to £470.00 pm.

They would save £30.00 pm and also have the advantage of the investment value.

Regards

Mick

 

I rent an unfurnished flat for £750pm. (I knocked him down from £800) To buy it off my landlord would cost me £180000+ (at the most recent valuation 6 months ago). An average mortgage on that much is just over £1000pm with a 5% deposit of £9000.

I was generally thinking more of SE prices, where there isn't a property in existence for less than £100000, and hardly a squat available for rent for less than £500. Hence i reckon the likelihood of getting a mortgage cheaper than rent is pretty slim, unless one gets an interest only mortgage.

Rental prices in the current climate are relatively competitive, and it is better i imagine for a landlord to get long term, reliable tenents with a slightly lower rent, than a higher rent, without the same assurances.

And i don't know where the figure of £450 comes from - does that include buildings/life insurance etc? And a 100% mortgage isn't going to get very favourable interest rates i wouldn't imagine?

I suppose it varies geographically and so on. I'm no authority. Just that from my experience, i will definitely be paying more on a mortgage if ever i buy, whatever kind of reasonable property i buy. Plus the running costs of a home are invariably more. All in all, renting is much cheaper i would imagine.

 

Would find that very hard to believe. The number of people moving in to the buy-to-let market is unbelievable, so they must be making money on the properties. They also will make a bit extra to cover any costs that 'may' occur (repairs etc)

You've got a pretty good deal at £750pcm, we pay £850 for something that is similar in size to yours. Tried to knock the guy down a bit (they usually reduce it by a bit), but he wouldn't budge.

I know what you mean about competitive rental prices in some ways though - took a look at the Property paper this week and it looks like they are coming down (by £25 or so )

 

Hi Harry

For what its worth mate, I don't think you made the wrong choice, you have a lovely home, its just things haven't gone your way lately, but it'll turn around.

Dom,
In the South Hams the council have increased the Council Tax for those Rich folk with holiday homes, so hopefully they'll be putting something back into the community. I personally don't think that's enough, but I guesss there is no way to stop the yuppies/ "upper class" flashing there cash down here.

I would say renting is cheaper, down here, a 1 bed studio flat rents for about £400 - 450 pcm you could probably buy it for £110 - £150 k but I bet your repayments would be a lot higher than the rent, and off course not forgetting the money you'd have to spend on maintenance once you brought it, I have to admin, unless wages are brought inline with the price of property its just not worth it.

 

Re: Cookie

Go here,

http://www.bbc.co.uk/homes/property/mortgage_calculator/

It calculates figures similar to those that i have acquired very recently myself from many high street lenders.

Using your above example, a 100% mortgage on £125000 @ 4.5% (over 25yrs) equates to £702.48. Unless of course you take out an interest only, as i mentioned, which would be £468.75, which may be the figure you were referring to. But an interest only mortgage is a different kettle of fish, and was not really what i was referring to. And i think that the £30.00 would soon be absorbed by the extra running costs of owning a home as opposed to renting.

I imagine many people get these low mortgage figures because they are referring to interest only mortgages, and maybe that is how many more people are able to afford something. Historically of course, they may not necessarily be that straightforward, however tempting initially.

Also note the 12% interest rate figure which they provide. Even if you don't believe that they won't rise to that agian, or at least not in the near future, it indicates the consequences of even modest rises. Even a fixed rate mortgage will only keep you safe from the sharks for so long, usually 5 yrs at the most.

 

For people who are worried there are long term deals around. We fixed ours at 5.1% for ten years. At the moment that is looking good. The little pipsqueak of a mortgage adviser insisted that the only way interest rates were going was down, but I disagree. The market may fall a little, but I think it won't fall a lot, the best we can hope for is stability.
Just did that calculator thing on the BBC. Every extra percent is a £100 on our mortgage. It might not be the cheapest, but at least we know we can afford it.

 

Chaps

I agree that in the short term it can pay to rent but long term, house ownership is a no brainer. You can change it to suit yourself, put in new kitchens etc.

I did quote interest only payments but you could step it up as you get older in order to clear the debt.

I charge about £75pm below the going rate and as a result I have the original Tenants in both houses and they don't argue with me in the event of a dispute. Once a tenant wanted me to come around and change a light bulb. I said of course, but the rent goes up by £50pm which soon shut him up.

Also there is nothing wrong with people owning holiday homes, the system of the world rules that he who sells anything be it hifi, cars or houses, will sell to the highest bidder. Cornwall is a good example where the community is becoming more focussed on tourism and it is bringing money into the UK as well as Cornwall.

That is in part due to second home owners coming in and spending money on doing up old cottages that the local buggers failed to maintain.

Regards

Mick

 

mick,
in the days when there was such a thing as a job for life, buying over renting made good sense, however i've moved all over the country / world in order to work (bedfordshire, cambridge, luton, yorkshire, london, birmingham and texas) in the past 17 or so years. most of these moves was due to redundancy or the company going bust. unfortunately this is a fact of my life, there is no way i could afford to pay a mortgage as well as rent so renting is effectively my only option. i feel there are a lot of people in my situation who need to be able to move on quickly for whom buying is just not feasable. short of buying a massive motor home or a caravan, selling charms and stealing peoples children there's not much i can do except save like buggery (when i'm employed) and hope i can scrape enough cash up to buy somewhere specificly to rent out instead of putting money into my raped pension.
cheers


julian

 

[QUOTE
there's not much i can do except save like buggery (when i'm employed) and hope i can scrape enough cash up to buy somewhere specificly to rent out instead of putting money into my raped pension.
cheers


julian[/QUOTE]

Best of British to you then...............

Cheers

 

i'd be a whole £5.24 a month better off (assuming no change in intrest rates),then add the cost of building insurance, maintenance of the propety,ect , i'd never be able to afford trips to amsterdam.

 

themadhippy

" i'd never be able to afford trips to amsterdam."

Now that would be a great shame........

BTW I am half Dutch and used to live 5 doors down from Anna Frank as a kid

Best regards

Barnie.

 

Julian

You could buy a house in Location A and rent it out when you move to Location B and then rent that out when you move to Location C.

It is dead easy once you organise it.

Regards

Mick

 

Re: Julian

And we wonder why house prices are so high!

You should be limited to one house per country Mick.

Buy yachts or fine art or something instead.

 

Re: Re: Julian

I really don't understand this attitude, I mean we all have the same opportunities and it's up to the individual what they choose to do with it.

There has been some good advice on this thread, yet the ones who have made their choices for whatever reason and don't own property, seem to think the ones that do make the best of the current markets are in some way out of order.

I reckon you'd still moan about the price of yachts and fine art if that was the chosen investment material, instead of getting out there and doing it for yourself. Why don't you cut out the whinging and use the energy to better yourselves?

Best regards

Barnie

 

I think cookie said it in a jovial manner

 

Well that's alright then. Shame you never saw my comments to Mick the other day like that init.

Barnie

 

mick,
if my financial situation was more stable then i would however as an irresponsible youth i spent all my money on trotting the globe and an ill advised choice of wife, thankfully the stormy ocean of my finances may finally be calming down with just the decree absolute to go in a few weeks. i can then start thinking about buying a nice little rentable 2 bedroom flat somewhere, they're building loads of them round where i live at the moment, i'll probably have to pawn the lexus though .
cheers


julian