Feeling I have overpaid

getmore4less

tori.k wrote: »

How do you get your maths to stack up CT that property isn't a safe investment.
Lets take John and phil
John buys his house for 100k 2% interest 15 year mortgage and Phil his neighbour rents the house next door for 500 a month.
Over the years John has 10K of maintenance on his house.
Phils been lucky landlord hasn't increased his rent he's has no maintenance and only paid 90K in rent by the time Johns mortgage is done and to top it off the housing bubble has burst and John house is only worth 50K
John has to sell but happy enough as he walks away with 50K as his housing costs have been 77.5K over the 15 years so better off than phil by 12.5K.
Rule of thumb if your lifestyle is pretty transient then rent, but if your planning in staying long term in a area then its a no brainer to buy.

There are some flawes in this do you want to update to include them?

Hint: the mortgage

Crashy_Time

Did John go back to live with his parents after pocketing the 50k?

Albala

Crashy_Time wrote: »

That part alone would make me wary of taking your advice on safe places to keep money.

Why? how often does a house and all the land it stands on evaporate overnight? In my experience, precisely never, but maybe in your universe it happens- does it? Shares can and do fall to zero value and become worthless. If you can't understand that, no wonder you think the way you do.
As you're so happy to demand personal details from other people, and think you are so, so clever, then here's a question for you.
How much, to the nearest grand or so, say, have you paid in rent in your life. And how much have you invested instead of buying, and what was it you invested in (approximately, and just which sectors will do), and what are your investments now worth- include all losses as well. Then we can all see how well you have done and we can compare it to someone who bought a place to live. Your age would help, as we'll need to factor in the fact that you will be paying rent for the rest of your life, and compare that to what would be the case if you had paid off a mortgage and then had only maintenance to pay on the property you lived in.



If you refuse to say, then I think we can safely conclude you are talking out of your backside and we can all ignore your future posts.

Albala

tori.k wrote: »

How do you get your maths to stack up CT that property isn't a safe investment.
Lets take John and phil
John buys his house for 100k 2% interest 15 year mortgage and Phil his neighbour rents the house next door for 500 a month.
Over the years John has 10K of maintenance on his house.
Phils been lucky landlord hasn't increased his rent he's has no maintenance and only paid 90K in rent by the time Johns mortgage is done and to top it off the housing bubble has burst and John house is only worth 50K
John has to sell but happy enough as he walks away with 50K as his housing costs have been 77.5K over the 15 years so better off than phil by 12.5K.
Rule of thumb if your lifestyle is pretty transient then rent, but if your planning in staying long term in a area then its a no brainer to buy.

Worth pointing out that if you are talking about a 15 year time period, I doubt that there is any combination of buying and selling dates that would give anything even remotely like a 50% drop in 15 years. (A 20% drop in five years or less if you were very unlucky, maybe.) But I'd be interested if you could find one!

Crashy_Time

Albala wrote: »

Why? how often does a house and all the land it stands on evaporate overnight? In my experience, precisely never, but maybe in your universe it happens- does it? Shares can and do fall to zero value and become worthless. If you can't understand that, no wonder you think the way you do.
As you're so happy to demand personal details from other people, and think you are so, so clever, then here's a question for you.
How much, to the nearest grand or so, say, have you paid in rent in your life. And how much have you invested instead of buying, and what was it you invested in (approximately, and just which sectors will do), and what are your investments now worth- include all losses as well. Then we can all see how well you have done and we can compare it to someone who bought a place to live. Your age would help, as we'll need to factor in the fact that you will be paying rent for the rest of your life, and compare that to what would be the case if you had paid off a mortgage and then had only maintenance to pay on the property you lived in.



If you refuse to say, then I think we can safely conclude you are talking out of your backside and we can all ignore your future posts.

Couple of questions on the first part of your post - Do you agree that If you can`t find a buyer for a house the money you want to realise isn`t there - a yes or no answer will be fine. Can you quote an example of a tracker fund of a major index ever "falling to zero and becoming worthless" - yes or no will be fine again thanks. BTW I don`t really consider a tracker fund as a suitable place to "park" money as the value can drop maybe quite a way (like a house) but unlike a house you can get your money back quickly. "Parking" money (like a car) assumes that you can find it and take it away again when you want, an illiquid and sometimes volatile asset like a house does not even come close to ticking that box IMO. Also the fact that some posters seem to think that the only alternatives to buying a house are Icelandic banks and dodgy shares may say a lot about why the public were so hoodwinked when it came to the bankers property debt bubble?

tori.k

getmore4less wrote: »

There are some flawes in this do you want to update to include them?

Hint: the mortgage

The 77.5K includes the interest and the 10K

Smodlet

sillyhilly wrote: »

What's wrong with you lately? Most of your posts are filled with sarcasm and general rudeness to people who are genuinely concerned, worried or just need a rant/chat.

If you're frustrated with the FTB posts, may I suggest you just ignore them and move onto the next one that is more worthy of your time?

Lately? I've been away for nearly eight months and nothing seems to have changed to me... Including why anyone still indulges CT but, I guess, some must still find amusement in doing so. To each, his own.

jimbog

Crashy_Time wrote: »

Did John go back to live with his parents after pocketing the 50k?

Last heard he was renting a bedsit spending the money on rent

tori.k

Crashy_Time wrote: »

The question was - "Is property a safe place to park money". Living in a mortgaged house for 15 years isn`t "parking" money.

No the odds are better paid in cash the 15 years would cost 60K over 90k in rental.
John married up and became a kept man

Davesnave

Smodlet wrote: »

Lately? I've been away for nearly eight months and nothing seems to have changed to me... Including why anyone still indulges CT but, I guess, some must still find amusement in doing so. To each, his own.

Some of us indulge people because we are polite and we still believe in free speech.

I'm fine with free speech that doesn't twist other peoples words or over-simplify matters. People's lives are complex; it's not all just about the maths. It's also handy if the person who's being critical makes positive suggestions, rather than just sniping.

For example, on this thread I never recommended Icelandic banks, nor did I recommend buying a house one couldn't live in for a long time, if necessary. With ownership times of 10 years, 21 years and, so far, 10 years again, it's obvious I'm not into flipping.....flippin' obvious in fact!