BOE Base = 2%

Kenny4315

neverdespairgirl wrote: »

In the last year here, we've had a gas and electricty safety inspection, a widget replaced in the boiler (cost £300), and a new shower door (cost £290), and at the moment, taps about to be replaced on 4 radiators, and various other fiddling (cost £700). So a total of £1,290, plus a £2,100 service charge.

I have spent about £8k when complete, this year, on revamping my flats.

That's one expensive widget ... £300 must have seen the guy coming.

Dithering_Dad

neverdespairgirl wrote: »

In the last year here, we've had a gas and electricty safety inspection, a widget replaced in the boiler (cost £300), and a new shower door (cost £290), and at the moment, taps about to be replaced on 4 radiators, and various other fiddling (cost £700). So a total of £1,290, plus a £2,100 service charge.

in the same year, I've had nothing go wrong in my home. Perhaps the stuff in your rented house is old and decrepid?

Something to consider when you buy your own home

Cannon_Fodder

IveSeenTheLight wrote: »

She has said the interest does not cover her monthly expendeture now.
So As DD is saying, whe would be eating into the paot to get by renting.

I don't know if it is right for her or not, but if the pot is getting smaller, then she needs to do the calculations to see if she would be better off buying or not.

Yes, agree it needs the calculations doing.

Is rent the big expenditure, or not, will be the crucial factor, I guess.

Not knowing the whole picture, I just worry that after buying the remainder of STR-pot will be gone in a flash, and then what...?

smartn

Dithering_Dad wrote: »

But then if you take into account that the mortgage free person could put the £850 pm they're not paying in rent away into a deposit account....

As to house maintenance, as others have said unless your boiler explodes or roof blows off, there really isn't that much maintenance to be done, certainly no more than would occur in a rented place.

Ask yourself how often your landlord has maintained your rental accomodation this year? I've been in my rented place for 9 months so far and haven't seen hide nor hair of him.

Can't get my head around this, surely the very basic calculation (lets exclude maintenance even though I still think it is very relevant) is as follows :-

Option 1 - Buy 100K house, no rent to pay, house price drops 10 percent, left with an asset of 90k value.

Option 2 - Rent @ 850 per month. Invest money (even at a low 2%).

100K - 10.2k Rent + 2K interest earned = 91.8K therfore better off having rented (even with a very low interest rate on savings and ignoring maintenance).

Dithering_Dad

smartn wrote: »

Can't get my head around this, surely the very basic calculation (lets exclude maintenance even though I still think it is very relevant) is as follows :-

Option 1 - Buy 100K house, no rent to pay, house price drops 10 percent, left with an asset of 90k value.

Option 2 - Rent @ 850 per month. Invest money (even at a low 2%).

100K - 10.2k Rent + 2K interest earned = 91.8K therfore better off having rented (even with a very low interest rate on savings and ignoring maintenance).

In your example, the renter is spending £10.2k of his own money in rent and also has the £100k in a deposit account making £2k interest.

To make it a fair comparison, both the home owner and the renter should have this £10.2k to spend each year. As the person in option 1 does not have to spend his £10.2k on rent, he saves it instead. So...

Option 1 - Buy 100K house, no rent to pay, house price drops 10 percent, left with an asset of 90k value. Puts away £10.2k he's not paying in rent into savings account. Left with assets of £100.2k (plus interest on his savings).

Option 2 - Rent @ 850 per month. Invest money (even at a low 2%). 100K - 10.2k Rent + 2K interest earned = 91.8K

Therefore worse off by having put £100k in bank account and paying £850pm rent than having bought a house outright and put the £850pm in the bank.

Really2

smartn wrote: »

Can't get my head around this, surely the very basic calculation (lets exclude maintenance even though I still think it is very relevant) is as follows :-

Option 1 - Buy 100K house, no rent to pay, house price drops 10 percent, left with an asset of 90k value.

Option 2 - Rent @ 850 per month. Invest money (even at a low 2%).

100K - 10.2k Rent + 2K interest earned = 91.8K therfore better off having rented (even with a very low interest rate on savings and ignoring maintenance).

I think the point is taking the future in to consideration unless you can pick the very bottom you could spend 6-12 months finding the right house when prices are stagnent or increasing.

We all know a house purchase needs to be looked at in 5 year terms minimum. In my opinion.

Really2

Dithering_Dad wrote: »

To make it a fair comparison, both the home owner and the renter should have this £10.2k to spend each year. As the person in option 1 does not have to spend his £10.2k on rent, he saves it instead. So...

Option 1 - Buy 100K house, no rent to pay, house price drops 10 percent, left with an asset of 90k value. Puts away £10.2k he's not paying in rent into savings account. Left with assets of £100.2k (plus interest on his savings).

Option 2 - Rent @ 850 per month. Invest money (even at a low 2%). 100K - 10.2k Rent + 2K interest earned = 91.8K

Therefore worse off by having put £100k in bank account and paying £850pm rent than having bought a house outright and put the £850pm in the bank.

Would the rent not be paid by wages like the money saved in option 1.

If so they work out the same.;)

StevieJ

Dithering_Dad wrote: »

Exactly my point. If they buy now they have a chance to get a really low fixed rate.

If, as you say, interest rates go a lot higher quickly, these low rates won't be available for people who wait 3 years before they buy.

Add in the wise old sages who sold in 2002, they will have double trouble.

neverdespairgirl

Dithering_Dad wrote: »

in the same year, I've had nothing go wrong in my home. Perhaps the stuff in your rented house is old and decrepid?

Something to consider when you buy your own home

Could well be that. The whole flat was refurbished in 1995 or 1996, I think (we moved in here in 1997). I think it was new kitchen / bathroom / shower room / carpets / painting / plastering then.

Since then, the kitchen's not been replaced, nor the bathroom. The shower was re-tiled, and the carpets changed into wooden floors, and a new boiler put in about 5 -6 years ago, and the whole flat's been repainted twice.

The LL has muttered about replacing the whole kitchen, but we aren't keen. Too much hassle, when the existing one functions perfectly well.

Dithering_Dad

Kenny4315 wrote: »

I have spent about £8k when complete, this year, on revamping my flats.

That's one expensive widget ... £300 must have seen the guy coming.

I guess you can shop around to get a bargain more if it's your own home and you don't have an angry tenant phoning you al the blimmin time demanding that the widget be replaced right away.