Climbing the Housing Ladder to retirement?

Harry_Powell

Really2 wrote: »

How do you incur them if you have already purchased it?

those are one off fees not every 4-5 years.

I think he was referring to the post where someone was moving up the chain by buying a new house every 4 to 5 years.

Obviously a better approach would be to space out the purchases and buy bigger.

mr_fishbulb

Harry_Powell wrote: »

I think he was referring to the post where someone was moving up the chain by buying a new house every 4 to 5 years

Yes. That would be why I quoted it just above my response

Really2

mr_fishbulb wrote: »

Yes. That would be why I quoted it just above my response

Sorry, never read the quote.:o

Yes buying every 4-5 years would hammer you on costs.

mr_fishbulb

Really2 wrote: »

Sorry, never read the quote.:o

Yes buying every 4-5 years would hammer you on costs.

No worries

Costs like these are often left out when talking of profit and houses - it's one of my bugbears with these "do a house up and make loads-a-wonga" programs.

Harry_Powell

mr_fishbulb wrote: »

Yes. That would be why I quoted it just above my response

I know . My "I think" wording was constructed in a way to soften my comment. I always think that when I create a thread, it's like being the host at a party and one does one's best to make everyone feel at ease.

Besides, I quite like really2, despite having had a few run-ins early in my MSE career, and thought that he had probably just missed the original post and your 'quote' and so I gently pushed him in the right direction.

I totally agree with your point about housing costs. They always disregard them on those DIY house !!!!!! programs and make it look like they've realised a fortune, when after purchase & sales costs, mortgage arangement fees & mortgage payments, legal fees and tax payable on profits probably means most make a loss!

Grr!

Really2

Harry_Powell wrote: »

I quite like really2,

I told you Harry I am a married man.

Agree, I think we have found a common ground.

mr_fishbulb

Harry_Powell wrote: »

I always think that when I create a thread, it's like being the host at a party and one does one's best to make everyone feel at ease.

I get a bit like that when I ask a question on another board. I feel bad if I have already thanked one person, but then someone else comes along and answers as well. I end up thanking everybody like Halle Berry at the Oscars.

Thrugelmir

CLAPTON wrote: »

your friend is essentially correct but for entirely the wrong reason

the reasons that buying a large house is likely to give you a higher value asset that buying shares after 20-30 years is largely the effect of gearing

so today I can buy a house for 300,000 with a large mortgage
in 30 years time is may be worth say 10 times that i.e. 3,000,000

now suppose I want to buy shares... no-one will lend me 300,000 to buy shares so I can only buy a modest amount lets say 10,000 : so even if they rise in price by 10 they will still only be worth 100,000 in 30 years time

obviously you will need to fill in a lot of details but in essence that's why property to live in has been a very very good investment.

But you don't buy the house for £300k. With interest at an average 6% on a 25 year repayment mortgage, the total cost is £579,870.

So if you only borrowed £180k to buy a smaller house. Only £347,922 is repayable.

Which means that an additional £232k to is available to invest over 25 years.

Plus the savings on rates, heating, maintenance etc. Can be invested to.


House prices also will reach a ceiling. As there isn't the credit to support the market. Something which people are glossing over and not facing the realities of.

The housing market is propped up at the moment.

CLAPTON

Thrugelmir wrote: »

But you don't buy the house for £300k. With interest at an average 6% on a 25 year repayment mortgage, the total cost is £579,870.

So if you only borrowed £180k to buy a smaller house. Only £347,922 is repayable.

Which means that an additional £232k to is available to invest over 25 years.

Plus the savings on rates, heating, maintenance etc. Can be invested to.


House prices also will reach a ceiling. As there isn't the credit to support the market. Something which people are glossing over and not facing the realities of.

The housing market is propped up at the moment.

yes of course you are right but in my example :

your 300k mortgage costs 579k and you have a house that after 30 years can sell at 3,000,000 so gain is about 2,400,000

or you have a mortgage of 180k costing 350,000 but you end up with a house only worth (say) 1,500,000 so gain is only 1,150,000


even adding other costs the higher priced house will historically give a much better gain.

ManAtHome

I suppose the one advantage of The Big Mortgage is that it effectively forces you to continue investing. As Thrugelmir said, you can invest the interest you're not paying, but you have to get past the temptation of spending all your spare cash first.