Home is an investment

System

Another Joe- I think we should only buy property that we'd hypothetically be prepared to rent, because otherwise the biggest part of the return, the imputed rent, is wasted. Buying in property hotspots is like buying growth stock rather than value stock, and again may not be best use of imputed rent

Ecomiser - so in your case the imputed rent (dividend) outweighed capital gains, but making rent imputed is a financial decision when you could invest instead

And ray, indeed ultimate passive, that's why I think most people are better at property than stocks

Anthorn

MatthewAinsworth wrote: »

You may not see the capital gains before you die, but then that is much like unclaimed DC pension that simply passes on, it doesn't mean the capital gains weren't available to you in life if you decided to sell & rent

I'm not so sure that property whether bought as one's home or as a buy-to-let is an investment. Personally, I would regard it a fixed capital asset.

MatthewAinsworth wrote: »

Another Joe- I think we should only buy property that we'd hypothetically be prepared to rent, because otherwise the biggest part of the return, the imputed rent, is wasted. Buying in property hotspots is like buying growth stock rather than value stock, and again may not be best use of imputed rent

Ecomiser - so in your case the imputed rent (dividend) outweighed capital gains, but making rent imputed is a financial decision when you could invest instead

And ray, indeed ultimate passive, that's why I think most people are better at property than stocks

There is a different track where profit from one's house can be realised almost accidentally: This is where an older individual or couple are left to live alone possibly through children growing up and leaving home and they don't need such a large property. This is "Downsizing" where the house is sold and a smaller property bought with the profit possibly banked or invested. It could also be that the house is sold and a new property rented, again with the profit possibly banked or invested.

It's not just a simple case of buying to live in nor a simple case of buying as an investment. There are other avenues to consider in which, as I said, property is a capital asset.

AndyT678

Anthorn wrote: »

I'm not so sure that property whether bought as one's home or as a buy-to-let is an investment. Personally, I would regard it a fixed capital asset.

Before this starts any confusion, of course a house is an asset. But investments and fixed assets are not mutually exclusive.

An investment is something you buy with an expectation of a profitable return.

Fixed assets are things you own which have a value and a useable life normally > 1 year.

A BTL property is clearly both. A car is certainly an asset but unlikely to be an investment. The pint of milk in your fridge is neither.

System

Leasehold would be an expiring asset unless it's lease length is over at least 80 years

Anthorn - indeed downsizing, or sell&rent is available at any time

Eco_Miser

MatthewAinsworth wrote: »

Ecomiser - so in your case the imputed rent (dividend) outweighed capital gains, but making rent imputed is a financial decision when you could invest instead

That may have been a factor, but the main driver for buying was the security of tenure "to live in for the rest of my life".

Back then with no internet platforms and 5% initial fees and hidden ongoing costs, I wouldn't have bet on investments beating rent rises.

economic

AndyT678 wrote: »

Before this starts any confusion, of course a house is an asset. But investments and fixed assets are not mutually exclusive.

An investment is something you buy with an expectation of a profitable return.

Fixed assets are things you own which have a value and a useable life normally > 1 year.

A BTL property is clearly both. A car is certainly an asset but unlikely to be an investment. The pint of milk in your fridge is neither.

a pint of milk is an asset - it keeps you alive and therefore has value - unless you value your life as zero.

System

Where are these capital gains of 5%? Where I live property is the same price as it was in 2008, its not risen at all.

AndyT678

economic wrote: »

a pint of milk is an asset - it keeps you alive and therefore has value - unless you value your life as zero.

Keep it for a year and see how much value you think it has then...

Malthusian

Only one legitimate way to sort out a debate about semantics - etymology! The word "assets" comes from Old French asez and in turn Latin satis meaning "enough", so to "have assets" is to "have enough" i.e. to repay one's obligations. A house is an asset because it stores value and if you have a house you can sell it to pay off your debt. A pint of milk is not because the chances that your creditors will accept payment in milk that is already on its way to perishing is vanishingly small.