House ownership - Selling yourself into a lifetime of servitude

HAMISH_MCTAVISH

debtistheft wrote: »

If you sold your home and invested the cash you would probably find that the return would pay for more than just a betsit.

Rental yields where I live are almost 7%. My mortgage is 2.5%. My house has gained 4% in value year on year, and around 15% in value since the start of 2007

Your theory makes no sense. I'd be losing money by renting.

However,if you decide to live in a bedsit, you would be able to re-invest the surplus and grow your wealth even faster or you could spend it on whatever else would make you happy.

What if owning a nice house instead of living in some scabby bedsit makes you happy?

I personally like to travel and have found that the mobility provided by renting not only has allowed me to enjoy long-term holidays in far flung places, but it has also allowed me to make the most of any career opportunities that come along. My children speak four languages and correspond with friends all over the world, they ski, surf, swim and have enjoyed sampling many cultures and geographical locations. At one stage we were 'following the sun' by living and working in the Northern and then Southern hemispheres.

I've lived and worked in a dozen countries. Owning a house has never prevented me from doing that, or taking long holidays.

In fact, it's provided a significant amount of security, knowing we always had a base to come back to and a safe place to store our possessions.

Perhaps because we dont live permanently in the UK, we haven't fallen for the spell of home ownership as the sole purpose in life. I cringe when I see people stating 'in 17 years when I am 56 I will be mortgage free and can then start living my life'. Its a shame they dont feel able to live their lives in their thirties and forties, its to be hoped that nothing goes wrong in that 17 years to prevent them from finally living their lives in their fifties.

I lived my life to the fullest in my 20's, 30's, and now 40's. I was mortgage free by 38. I have a second house now, and another mortgage. It doesn't stop me from living, enjoying life, and being a globally mobile professional if I so choose.

debtistheft wrote: »

Someone who is ill and unable to work will be far more stressed if he is also likely to lose his house and all the money invested in it due to reposession for non-payment of mortgage.

1. Insurance.

2. Benefits.

Problem solved.

The tenant can simply move to a cheaper location or property type and concentrate on getting well.

What if the tenant already lives in the cheapest location and property type?

debtistheft

HAMISH_MCTAVISH wrote: »

Rental yields where I live are almost 7%. My mortgage is 2.5%. My house has gained 4% in value year on year, and around 15% in value since the start of 2007

Your theory makes no sense. I'd be losing money by renting.



What if owning a nice house instead of living in some scabby bedsit makes you happy?



I've lived and worked in a dozen countries. Owning a house has never prevented me from doing that, or taking long holidays.

In fact, it's provided a significant amount of security, knowing we always had a base to come back to and a safe place to store our possessions.



I lived my life to the fullest in my 20's, 30's, and now 40's. I was mortgage free by 38. I have a second house now, and another mortgage. It doesn't stop me from living, enjoying life, and being a globally mobile professional if I so choose.



1. Insurance.

2. Benefits.

Problem solved.



What if the tenant already lives in the cheapest location and property type?

Please apply this analysis to the debt facts I have listed. Clearly some people do well out of a home owership based econmy. many do not and have a miserable hand to mouth existence trying to pay down a huge debt. Working for the banks.

ukcarper

debtistheft wrote: »

If you choose to put it into an investment that just returns 3%, then that is your choice. I have had over 10% returns from government bonds, much safer than bank accounts. Though a lower return does suit your argument better, so I understand why you would go in that direction.

I think I have made it quite clear that I dont think buying suits the majority of people, unless they are buying property as an investment.

A flat near me for sale at £114k lets say it sells for £170k interests at 5% = £710 a very similar one is up for rent at £795 I ask you again where is the money to invest going to come from.

debtistheft

ukcarper wrote: »

A flat near me for sale at £114k lets say it sells for £170k interests at 5% = £710 a very similar one is up for rent at £795 I ask you again where is the money to invest going to come from.

If it up for sale at £114k, why would it sell for £170k?

Is rampant HPI so ingrained in your thinking that you think prices can still rise at that sort of rate?

HAMISH_MCTAVISH

ukcarper wrote: »

where is the money to invest going to come from.

It isn't.

Rent is already more expensive than mortgage interest payments at 5% in 80% of the UK.... Let alone the current mortgage average of 3% or so.

And rents are now at a new record high and rising rapidly, at twice the rate of wage inflation.

Within just a few short years, the rent increases have wiped out the ability to save anything at all.

debtistheft

For those people using debt to buy a house.

Luke 14:28-30
For which of you, intending to build a tower, does not sit down first and count the cost, whether he may have enough to finish it; lest perhaps, after he has laid the foundation and is not able to finish, all those seeing begin to mock him, saying, This man began to build and was not able to finish.

debtistheft

Those who charge usury are in the same position as those controlled by the devil's influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God. As for those who persist in usury, they incur Hell, wherein they abide forever (Al-Baqarah 2:275)

God condemns usury, and blesses charities.God dislikes every disbeliever, guilty. Lo! those who believe and do good works and establish worship and pay the poor-due, their reward is with their Lord and there shall no fear come upon them neither shall they grieve. O you who believe, you shall observe God and refrain from all kinds of usury, if you are believers. If you do not, then expect a war from God and His messenger. But if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew. (Al-Baqarah 2:276-280)

O you who believe, you shall not take usury, compounded over and over. Observe God, that you may succeed. (Al-'Imran 3:130)

And for practicing usury, which was forbidden, and for consuming the people's money illicitly. We have prepared for the disbelievers among them painful retribution. (Al-Nisa 4:161)

The usury that is practiced to increase some people's wealth, does not gain anything at God. But if people give to charity, seeking God's pleasure, these are the ones who receive their reward many fold. (Ar-Rum 30:39)

debtistheft

If thou lend money to any of My people, even to the poor with thee, thou shalt not be to him as a creditor; neither shall ye lay upon him interest. (Exodus, 22:25)[22]

And if thy brother be waxen poor, and his means fail with thee; then thou shalt uphold him: as a stranger and a settler shall he live with thee. Take thou no interest of him or increase; but fear thy God; that thy brother may live with thee. Thou shalt not give him thy money upon interest, nor give him thy victuals for increase. (Leviticus, 25:35-37)

Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest. Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the Lord thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it. (Deuteronomy, 23:20-21)

ukcarper

debtistheft wrote: »

If it up for sale at £114k, why would it sell for £170k?

Is rampant HPI so ingrained in your thinking that you think prices can still rise at that sort of rate?

Funnily enough that was a typing error if it did sell for £114 that makes it even better to buy.

ukcarper

debtistheft wrote: »

Please apply this analysis to the debt facts I have listed. Clearly some people do well out of a home owership based econmy. many do not and have a miserable hand to mouth existence trying to pay down a huge debt. Working for the banks.

Let’s double personal debt making it £60k assume that is on a 5% mortgage making the interest payments £250 a month what is the average rent a lot higher I think.