Str

Treadmill

So far then, to have hit the sweet spot selling to rent you would have needed to sell your house in about September 2007 and bought again in February 2009, How many people I wonder did that ?

Can somebody good at numbers chuck a few examples of how much they would have benefitted by if the STR had sold/bought at the top/bottom (so far)

silvercar

Can somebody good at numbers chuck a few examples of how much they would have benefitted by if the STR had sold/bought at the top/bottom (so far)

Depends on the area and type of property. I can show you mid range properties in my area in decent roads, where the price never dropped. I can also show you small homes in not so good roads in the same area where prices fell and haven't started recovering. Being the idea of STR is not to buy your house back again but to use the fall in prices to trade up, its hard to show the effect.

PasturesNew

Well, looking at http://www.home.co.uk and using their figures from June 2007 to June 2009 I am £67,052 up.

To have kept that house would have cost me more than my rent too because of the extra running/maintenance costs on it. So it can easily be rounded up to £70k.

If I compare median prices, I am up by £20k.

How long is the piece of string I need?

Only 3 houses like mine sold in June 2009 in my whole town, 12 sold in 06/07, so low volumes even at the peak.

Cleaver

It also depends on a whole host of other factors:

• When you originally bought your house
• The type of house
• Your family situation
• Your work situation
• Your long / short term goals in life

Cleaver

PasturesNew wrote: »

Well, looking at http://www.home.co.uk and using their figures from June 2007 to June 2009 I am £67,052 up.

You're £67k 'up' compared to selling your house now you mean?

PasturesNew

Cleaver wrote: »

You're £67k 'up' compared to selling your house now you mean?

Yep. Although with volumes down to 25% it wouldn't have shifted so easily now (and it took me a year at the peak).

Oh .,... and can I toss in a random £15k interest added too (roughly)?

So that's er .. lots more.

Cleaver

PasturesNew wrote: »

Yep. Although with volumes down to 25% it wouldn't have shifted so easily now (and it took me a year at the peak).

Oh .,... and can I toss in a random £15k interest added too (roughly)?

So that's er .. lots more.

Indeedy.

It's quite conceptual though, isn't it? I could say that I've also made the same amount by choosing not to buy your house when you decided to sell it.

HAMISH_MCTAVISH

Calculating STR gain or loss (and theres plenty that will have lost) is fairly simple.

For a mortgage free house....

Sale price, minus EA fees, advertising costs, legal fees, rental costs, moving costs, buying costs, stamp duty on next purchase, moving costs again, etc. Balanced against the savings on the next purchase and any interest made on capital in the meantime.

So for example, if you sell a house for 200K, rent for two years, and the transactional costs listed above come to 20K, you need to save at least 20K or 10% on the next house to win.

For mortgage holders, it becomes more complicated, but essentially it's the same as above whlst also including mortgage interest and the differential between the mortgage deal you had then and the deal you could get today.

Selling at peak, and buying at the trough in february, the owner of the "average" house as per the national stats may have been able to clear 10K or so, if they were lucky. With that figure increasing the more expensive a house you are dealing with.

Obviously, selling too early, like back pre 2005, adds rental costs and reduces price achieved, so it's disastrous. And selling too late,, after the majority of falls have occurred, is just as bad.

With STR, timing is everything. The majority that try, will in my opinion end up breaking even at best, but most probably losing.

PasturesNew

If you were going to move anyway at some point, and just chose now as the best time to do it, then you'd have had the transaction costs etc anyway.

IveSeenTheLight

PasturesNew wrote: »

If you were going to move anyway at some point, and just chose now as the best time to do it, then you'd have had the transaction costs etc anyway.

Don't ya just love the use of the word "If" in these debates

michaels

I guess it depends if the str was part of a move up the ladder as well in which case the sellign costs would have been payable at soem point so can not be included in the equation.

For me I could probably have sold for 310, low point was 250 (stamp duty) and 18 months rental would have cost about 10k more than the mortgage + forgone interest on equity. SO possbile 50k profit with the tming right - however price is now back up to 310 so it was a tiny window to buy and during that time the was next to nothing available where I am looking to move to. As a counter factual had I str'd in 2005 and failed to buy till now I would be hugely down on the deal. Come sback to a house is a home not an investment, in my opinion if you are planning on being in the market long term then trying to play the peaks and troughs is pure speculation.