ONS- June: +2.3%

DervProf

ukcarper wrote: »

But I would like to know what omission Hamish made I already said you could argue against his points but his calculations are correct and you said they weren’t.

I'll try, once again, to point out the obvious omission.

HAMISH_MCTAVISH wrote: »

A buyer in Aberdeen in 2007 takes a 10K deposit and buys a 200K house.

Today, that house would be worth £212K. So a profit of £12,000.

The profit would not be £12K.

This calculation does not take into account any interest paid to the lender for the £190K, which I think it's fair to assume was borrowed to buy the property. I didn't need to point out that stamp duty and any other fees would have to be considered in calculating the profit figure, although I could have done.

DervProf

ukcarper wrote: »

If you are happy to live with your parents that is a reasonable idea . I think to invest all your deposit in gold would be rather silly it would have turned out OK but it could easily have not.

Agreed.

As I previously stated, there are scenarios that could be used to show the pros and cons of either buying a property (or properties) or gold in 2007. The fact is, gold has risen in value much more than Aberdeen property since then. Hamish suggested a very reasonable situation to show that in reality, buying a proprty to live in would have been the most likely and sensible option. What he also did was exaggerate the positive financial aspect of buying that property.

ukcarper

DervProf wrote: »

I'll try, once again, to point out the obvious omission.



The profit would not be £12K.

This calculation does not take into account any interest paid to the lender for the £190K, which I think it's fair to assume was borrowed to buy the property. I didn't need to point out that stamp duty and any other fees would have to be considered in calculating the profit figure, although I could have done.

But that is accounted for in second part of post I'm not sure how you can take it in isolation

ukcarper

DervProf wrote: »

Agreed.

As I previously stated, there are scenarios that could be used to show the pros and cons of either buying a property (or properties) or gold in 2007. The fact is, gold has risen in value much more than Aberdeen property since then. Hamish suggested a very reasonable situation to show that in reality, buying a proprty to live in would have been the most likely and sensible option. What he also did was exaggerate the positive financial aspect of buying that property.

True that is what he did but only by using a Low interest rate I think if you are intending to buy anyway you only need to account for gains on stamp duty etc as you will have to pay it at sometime .

DervProf

ukcarper wrote: »

But that is accounted for in second part of post I'm not sure how you can take it in isolation

Hamish asked me to.

Graham_Devon

ukcarper wrote: »

If you want to use repayment I will be £950 saving £50 a month on rent total over 5 years £3000

Capital paid of over 5 years £26k Total £29k

Interest only £555 a month saving £475 Total £28.5k

These are at 3.5%

　

Buying and selling fees, stamp duty, searchs, solicitors etc will wipe out that 3k profit.

I really can't understand where the argument is on this thread, though it's been going for a few pages.

It's absolutely obvious the person with the gold would end off with a MUCH larger profit over the timeframe picked.

Why does so much have to be made of it? I notice peoiple are quite happy to take the rent the gold buyer MAY have to pay....what if he lives rent free...mortgage paid off etc./...howcome he HAS to rent in this silly argument?

The argumens get stupid when we have to create cost items for one side of the figures, and then exclude cost items from the other side of the figures.

Sillyness.

Graham_Devon

And if I may...though it's likely I'll get accused of muddling (which appears to happen whenever you make a point some don't like)...

You can't strictly live in your investment. Afterall, it's either a profit making investment, or it's a home. If you live in the investment, and you sell it, taking your X amount of profit....where are you going to live then?

The "profit" made, was only made because of higher house prices. You will need somewhere to live. Therefore, you'll need to use the profit to buy a (now) more expensive house.

It can only be an investment if you already have a home. Otherwise, to make and bag your profit, yu have to make yourself homeless. This is why you can't argue that someone investing in gold has to pay rent and simply remove the rent from the profit like some blinkered HPI nutjob.

Argument over as far as I'm concerned. (though it was already....just rubbing salt in...).

You really don't have to be a genius to figure all this out.... hence I could.

ukcarper

Graham_Devon wrote: »

Buying and selling fees, stamp duty, searchs, solicitors etc will wipe out that 3k profit.

I really can't understand where the argument is on this thread, though it's been going for a few pages.

It's absolutely obvious the person with the gold would end off with a MUCH larger profit over the timeframe picked.

Why does so much have to be made of it? I notice peoiple are quite happy to take the rent the gold buyer MAY have to pay....what if he lives rent free...mortgage paid off etc./...howcome he HAS to rent in this silly argument?

The argumens get stupid when we have to create cost items for one side of the figures, and then exclude cost items from the other side of the figures.

Sillyness.

What £3k profit the saving on rent is £29k + £12k hpi

compared to £14.7k with gold.

ukcarper

DervProf wrote: »

Hamish asked me to.

Can yo show me where.

Graham_Devon

ukcarper wrote: »

What £3k profit the saving on rent is £29k + £12k hpi

compared to £14.7k with gold.

Why does the person with the gold HAVE to rent?

Why can't they live with parents? Live in a mortgage free home? Have a live in job?

The only reason this rent nonsense has happened is to make the maths work. And as I said....you can't live in your investment anyway.