Is now really a bad time to buy?

Crashy_Time

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

Crashy_Time

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Parking_Eyerate

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

graphs

If you can negotiate a very hefty discount and your job is safe then go for it. 
If the seller is living in cloud cuckoo land and refuses to drop the price walk away.

Splatfoot

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

No, but I can have a secure roof over my head, paid for and anything I earn is pretty much in my pocket/invested, yes? Therefore making me richer than I've ever been because I haven't got rent or mortgage to pay for the next 30 years. 

lisyloo

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Yes you can.
imputed rent = the money you aren’t spending on rent every month for somewhere to live
Assuming you have income (earned or pension) you can have access to this money every month and either spend or save it.
100% once you own the property completely.

To a lesser extent along the way, but as mortgages are nominal there is an effect as soon as one of you gets your first pay rise
you appear to have taken this thread off topic for your own agenda.
whether now is a good time to buy or not depends on a number of circs and I’d say job security is a major one (some people e.g. critical care nurses, still have very secure jobs).

Norman_Castle

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

Crashy_Time

Parking_Eyerate said:

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

1) Maybe try googling "royalty payment" and see how much effort is required after the initial creation process, think about the writers of the song "Yesterday", do you think the surviving one still gets paid, and how much effort do you think he has to make regarding being paid this royalty?
2) You are just trying too hard to have property not be an illiquid asset, it is, everyone knows this. The only fund of mine "frozen" in this crisis was a pension fund with property exposure, everything else could be traded quite easily.

Crashy_Time

lisyloo said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Yes you can.
imputed rent = the money you aren’t spending on rent every month for somewhere to live
Assuming you have income (earned or pension) you can have access to this money every month and either spend or save it.
100% once you own the property completely.

To a lesser extent along the way, but as mortgages are nominal there is an effect as soon as one of you gets your first pay rise
you appear to have taken this thread off topic for your own agenda.
whether now is a good time to buy or not depends on a number of circs and I’d say job security is a major one (some people e.g. critical care nurses, still have very secure jobs).

Most people buying now, at this bad time to buy, will be making monthly mortgage payments, maybe for 30 years in some cases and they will have exposure to interest rate risk in that time, the idea of buying in the early 90`s and staying put for 50 years until it is time to drift into the sunset with piles of money kept away from landlords is a picture that doesn`t really have any relevance for a buyer today, or for anyone in the real world who may have to or want to move a few times.At the start of this crisis you were predicting a "blip", nothing to worry about etc. etc. so why should anyone take the biggest economic step of their life based on your advice?

Parking_Eyerate

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

1) Maybe try googling "royalty payment" and see how much effort is required after the initial creation process, think about the writers of the song "Yesterday", do you think the surviving one still gets paid, and how much effort do you think he has to make regarding being paid this royalty?
2) You are just trying too hard to have property not be an illiquid asset, it is, everyone knows this. The only fund of mine "frozen" in this crisis was a pension fund with property exposure, everything else could be traded quite easily.

1) Thanks for the advice but I am aware what a royalty payment is. What isn't clear is your characterisation of it as one of a few (the only?) form of wealth (or "true"/"real" or whichever adjective you choose next wealth). I think the Beatles sold the copyright for their songs long ago, in fact. Paul McCartney tried to get some rights back and settled out of court, so who knows who gets paid when 'Yesterday' is played. It isn't really relevant. In fact decent IP royalties are relevant to such a small proportion of people (successful artists/performers etc.) that I really don't know why you're so obsessed with it. Have you had a one hit wonder?
2) Another very transparent attempt at a strawman argument. I have never once said (and nor do I think) that you can immediately sell a house at the click of a mouse. What I have said is that is not relevant to wealth assessment. It is you that is trying too hard to deny that property is an asset and may be considered part of a person's wealth. According to you HMRC, divorce courts, bankruptcy receivers etc. must be deluded when they ask for details of property ownership, why don't you write and tell them how misguided they are?

Were you tempted to prove the 'liquidity' of your remaining assets when they crashed by 40%?