Climbing the Housing Ladder to retirement?

nearlynew

Harry_Powell wrote: »

Sorry . Was just wondering if you had a large family home that you'd be looking to downsize from, so it would factor into your retirement plans, even if you hadn't accounted for it in real terms.

I'm in the process of sorting out my retirement options and looking for advice (hence the discussion in the pub last night). I have a sipp at the mo and looking at ISAs but dont have a huge amount of cash to play with at present.

As I said in a psot a few days ago, owning your own home outright is a major step towards financial security. And the sooner you can do it the better.

The trouble with pensions is you have to rely on lying thieves to look after your money and you can never guarantee seeing any of it.

This interesting article is well worth a read...........

http://www.energybulletin.net/51170

silvercar

ninky wrote: »

this is based on an assumption that bigger houses increase in value at the same pro rata rate as smaller houses. i don't know if this is the case.

it is possible that as prices become more unaffordable it is the entry level properties that will increase the most in value (percentage wise).

if a 200k property goes up 10 percent in value you make 20k. you make the same on a 100k property that goes up 20 percent in value. the other issue with more expensive property is it costs more in stamp duty - often considerably more.

i'm sure people in big houses do well in retirement. but if they'd stayed in a smaller property and invested the difference wisely they could have done better.

The opposite is true round here. FTB properties have suffered most.

silvercar

This thread has made me curious on the properties I have owned over the years.

First property bought for 49k in 1986; now would be worth 190k: 141k profit ROR:5.8%

Next bought for 91k in 1988; now worth 260k: 169k profit 4.9% ROR

Next bought for 167k in 1992; now worth 450k: 283k profit 5.7% ROR

Now I obviously haven't got the profit in each case as its been used to fund the next purchase and I've traded up not down. But it illustrates that over the long term property increased and the ROR was reasonable.

chopperharris

We are doing something similar for ourselves , but fortunately for us its from cash.No mortgages means more profit.

We have specialiased in buying , improving , holding and renting out for a 4-5 year resale time.Now changing it to target 3 year intervals then selling with the ideal of 30 percent profits including rental.Now its expanded to include the same workings in a foreign country and now building from scratch.

10 year plan is to more than double our money , sure you can do that with riskier investments like day trading in a couple of weeks , or lose it all in the same time frame.

Davesnave

nearlynew wrote: »

This interesting article is well worth a read...........

http://www.energybulletin.net/51170

That article sums up rather well what was in my mind when I exchanged a 4 bed city house for this one of similar size, which has 5.5 acres. The down side is that I can no longer walk to restaurants, the theatre or shops, but there are many plus points to compensate for that.

It remains to be seen whether my kids will one day return here or thank me, but I think anything with land in a non-extreme environment is a safe bet to increase in its desirability in the future.

Generali

chopperharris wrote: »

10 year plan is to more than double our money , sure you can do that with riskier investments like day trading in a couple of weeks , or lose it all in the same time frame.

Find a good horse and you could quintruple your money or more, or not of course.

HAMISH_MCTAVISH

Graham_Devon wrote: »

15 years? Your always saying between you and your partner you are bringing in 100k + a year.

We are. But that goes on a decent lifestyle, savings, investments, and pensions.

15 years to clear 200k!? Why does nother ever add up.

It adds up perfectly, if you're not financially illiterate.

We have cleared 10 years worth of mortgage payments in 3 years, whilst still maintaining limited savings payments and normal pension payments. Both our bonuses for the last 2 years have gone straight into the mortgage, and overpayments to boot.

If base rates stay at 0.5% for another 5 years or so, we could clear the rest. But they won't.

If rates return to 2007 levels, and I keep ploughing money into pensions and savings and don't change lifestyle, then it would be 15 years.

If rates stay lower than that, it will be less than 15 years, but ICBA working out a variety of scenarios for pedants, so it seemed easier to give the worst case scenario.

Generali

silvercar wrote: »

This thread has made me curious on the properties I have owned over the years.

First property bought for 49k in 1986; now would be worth 190k: 141k profit ROR:5.8%

Next bought for 91k in 1988; now worth 260k: 169k profit 4.9% ROR

Next bought for 167k in 1992; now worth 450k: 283k profit 5.7% ROR

Now I obviously haven't got the profit in each case as its been used to fund the next purchase and I've traded up not down. But it illustrates that over the long term property increased and the ROR was reasonable.

I guess you're missing 2 things from there however. You haven't accounted for inflation and you haven't accounted for financing costs.

I agree it's a reasonable ROR however.

dopester

Davesnave wrote: »

I think anything with land in a non-extreme environment is a safe bet to increase in its desirability in the future.

Increase in desirability possibly... (what you doing with that barn with the separate electricity meter anyway?), but increase in value over 10 years, I very much doubt. Nothing personal.

This thread is so whacky. People calculating HPI into the future using the post-WW2 baby-boomer long-wave inflation price rises as the formula for what they believe will always be.



The delusion virus. It seems to be the most potent amongst the baby-boomer generation at around 45 years+, most detectable when their minds think over the value of their homes. It wrecks your head and makes you believe the craziest things... until new realities are forced to be recognised.

We've hit a thick lead inflationary ceiling in credit/finance/ extreme credit expansion, jobs.. and the narrowing field of well paid jobs that will remain available into the future, boomers hitting retirement age... ect.

Silvercar and her/his profit calculating. Gotta sell it yet Silvercar to release any of that profit.. and the window is closing for boomers to get out with old-world prices as you're sucked into the deflationary vortex.

silvercar wrote: »

This thread has made me curious on the properties I have owned over the years.

First property bought for 49k in 1986; now would be worth 190k: 141k profit ROR:5.8%

Next bought for 91k in 1988; now worth 260k: 169k profit 4.9% ROR

Next bought for 167k in 1992; now worth 450k: 283k profit 5.7% ROR

Davesnave

dopester wrote: »

Increase in desirability possibly... (what you doing with that barn with the separate electricity meter anyway?), but increase in value over 10 years, I very much doubt. Nothing personal.

I didn't say my place will increase in value, though I think it will because of the increasing importance of home food production, not to mention other possible income from things like power generation, timber etc.:D

Anyway, we'd prefer to use much of the money we have left to improve its potential and our enjoyment of it, rather than leave it in the bank or investments. The barn is a case in point, as it is likely to have an 'office' attached shortly, which will just happen to be constructed to building regs! Besides power, it also has water and septic tank drainage, so it would be daft not to.;)

On the down side, any property with significant land costs money up-front for maintenance. I would estimate an input of around £10k for machinery etc to do that, but that's no more than some Boomers spend on holidays or hobbies.

I don't think the recent proliferation of 'Escape to the Country' & 'Live the green dream' type TV programmes is accidental, though the reality is often somewhat different from that portrayed. It can be a good thing for a Boomer to do, but one's temperament/health has to be right, or it will be a disaster.