I'm not buying

IveSeenTheLight

Procrastinator333 wrote: »

However there are times, like the last 3 years when you would have been better off renting.

I bought a property three years ago and rent it out.
In that time I have had profitable rental years, average capital value as increased in the area and the tenants have helped to reduce the mortgage thusincreasing the equity.

It certainly was not worth renting that property for the last 3 years, much better to rent it out to others who wish to rent.

Procrastinator333

@ conrad - the figures in my earlier post show the average renter is better off compared to the average buyer over the last 3 years. Yes there will be exceptions, it is anaverage after all.

@ Conrad, agree, there are many people who would rather pay more for their own hone, and in a few years I will probably be one of them. My point though was to show that the argument of renting is wasted money is tripe (during certain periods, such as falling or stagnating house prices). The average person would have saved money by renting for the last 3 years. If you disagree, please point out the error in my calculation.

@ Conrad, why do home owners assume that renters have a lower quality of life lol. I'm living in a nice place and at the moment there is nothing I would really want to change

@Thurgelmir, I don't think I will ever sell up to STR, maybe if circumstance lent itself. We have just delayed the purchase of our first home.

I'm a FTB with not a huge LTV%, my rate is never going to be good. Agree to your example, but prediciting rates is probably harder than prediciting house prices and the only people who have the low rates today are those on trackers. There are plenty of upside prospects for IR's over the short -medium term, so I would rather pay more on a fix.

Procrastinator333

IveSeenTheLight wrote: »

I bought a property three years ago and rent it out.
In that time I have had profitable rental years, average capital value as increased in the area and the tenants have helped to reduce the mortgage thusincreasing the equity.

It certainly was not worth renting that property for the last 3 years, much better to rent it out to others who wish to rent.

See the point earlier about averages. Yes there are exceptions. Good for you. :beer:

Thrugelmir

[QUOTE=Procrastinator333;29206471@Thurgelmir, I don't think I will ever sell up to STR, maybe if circumstance lent itself. We have just delayed the purchase of our first home.

[/QUOTE]

In essence no difference. People STR for the same reason as you are delaying your first purchase. Economics.

Two people in my office are unintentional STR's. Originally sold as to put themselves in a position the same as cash buyers. Both found it difficult to find a home they wanted to buy in the school catchment areas, so rented. Nearly 3 years on, still renting as "saves" them money.

You can rent a newly built 4 bed detached house around here for less than £900pcm. Houses in the area cost around £260k - £280k. (Around 3.75% - 4% yield). So why no reason to buy at the moment.

Procrastinator333

It does depend on their deposit levels, but if they were a ftb like me, they would proabbaly be looking at about 5 or 6% on interest.

If house prices are flat, they pay less in rent than they do on interest. The difference can be saved for an increased deposit when they do purchase.

To my mind the chances of significant HPI over the next 6-12 months are low. Chances of stagnation are high and the chances of falls are a bit higher than HPI.

So they save money on rent against interest cost, run a small risk of HPI wiping this out, but stand to benefit greatly if there are further cuts in prices.

That is why I don't think they should buy today.

IveSeenTheLight

Procrastinator333 wrote: »

See the point earlier about averages. Yes there are exceptions. Good for you. :beer:

I fully understand averages and would like to think that any investor does too.
However investing is not reallyabout averages but about specific properties and choosing ones which meet a business model.
It is far more specific than simply the average house in the average town.

Your comment was said as a fact and actually incorrect

Originally Posted by Procrastinator333
However there are times, like the last 3 years when you would have been better off renting.

Procrastinator333

See post 90. I agreed it was badly worded and corrected myself. I posted the edit and correction 2 hours before your post. Move on.

One wording slip doesn't change the fact that on average, you would have been better of renting rather than buying.

Yes there are people away from the average. Yes there are people who through luck or judgement pick an area for which this is not true, or buy or sell at a point away from the average, good for them, but the nature of an average is that for everyone who does that, there is another on the opposit side who has done even worse than the average.