Renting vs Buying

qwert_yuiop

marathonic wrote: »

You can't cherry pick a few years over the past few decades where, with hindsight, it was the worst time to buy and use that as a basis for concluding that being a landlord is a mugs game.

Actually I'd say you probably can, certainly in the post 2000 era. The calculations being presented by numerous hucksters back then indicated a future on a yacht in the West Indies, controlling your empire over the phone, or even better, via an agent. It's often said that the definition of a long term investment is a short term investment gone wrong.

The BTL discussion isn't really the OP's question though, it's renting versus buying. The case for buying over renting is significantly stronger than the case for buying a BTL property - no requirement for profit, cheaper mortgage interest rates, no income tax on profits and no capital gains tax.

Indeed. That investment gone wrong has just gone wronger.

marathonic

qwert_yuiop wrote: »

Actually I'd say you probably can, certainly in the post 2000 era. The calculations being presented by numerous hucksters back then indicated a future on a yacht in the West Indies, controlling your empire over the phone, or even better, via an agent. It's often said that the definition of a long term investment is a short term investment gone wrong.

Forget the over-optimistic dreamers of yachts and ultra-early retirements. When I say long-term here, I mean someone that, in general, see's a portfolio of about five properties as a good retirement goal and sufficient to live off after having their mortgages paid off.

If we take those that bought with a repayment mortgage and rented out with the intention of holding as a long-term investment, i.e. until the mortgage is cleared, the only difference between now and when they originally bought is that they're paying less interest on their mortgage and they're achieving higher rents. They care more about rental income than property values until they come to sell in 20+ years time.

Indeed, in this post 2000 era that you're so fond of due to it being the one that incorporates the biggest crash we've seen in our lives, of those that bought with repayment style mortgages, those that bought in 2007/2008 are the ones that are in negative equity.

Like I said before, a sensible landlord is one that intends to hold property for 20+ years. However, just to please yourself, lets take the post 2000 era and assume that they all have to sell today. Those that bought in 2007/2008 are underwater and the rest are good. In other words, those that bought in 2 out of 16 years are the ones in bother - and that's selecting a time period that a property-bear is trying to use to argue their point.

qwert_yuiop

Not really. Just that the occasional property crash cannot be discounted. Or do you believe you can't lose on property, safe as houses and all those other cliches we used to hear before most of us were disabused ?

room_101

Well thanks for all the replies. I'm looking to take a room on somewhere as there is increased flexibility in the term and with a bit of looking I think I can get something suitable.

I'll be buying a property soon, but just not now. I missed out in 2006 and fear has stopped me trying again. Looks like I've missed the bottom and things are rising again though.