Opinion: Fleecehold as a high risk investment?

pieroabcd

ReadySteadyPop said:

pieroabcd said:

ReadySteadyPop said:

pieroabcd said:

PRLB said:

including the fact that a home is not just an investment but also a place to live

I would reverse that statement and say that a home is not only a place to live, but an investment: a way to protect the money that you spent and increase it.
I consider my house as the moneybox that I live in.
For me I preferred to buy a 95 years old freehold house (without  fees) instead of a new build for a very simple reason: I want to have exclusive control on the house, not to be at the mercy of someone else's decisions as if I were renting (that is unavoidable when fees apply, even if you "take part" to it).
Ease of resellability comes as a very straightforward consequence of this exclusivity.

Not a great idea to think of a house as a "moneybox" in my opinion, for many it is a "debt-box", that is another story though, but even with freehold you are controlled by the market as you need a buyer and a house is the most illiquid asset there is, especially in difficult markets, many people recently have lost all the money they spent on "improvements" for example.

When you have repaid the mortgage the house is no more a debt.
It's up to you to make the total cost not exceed the market value (for example I decided to repay early as much as I could to minimise the interest).
Think of the alternative: paying someone else's mortgage by paying their rent. Isn't the house still a moneybox compared to a rent that is 100% lost money?
Even if you sell for a loss it's definitely much less than 100%, unlike with a rent.

For the average buyer now that is 30 years of debt payments with probably volatile mortgage debt costs going forward?

One more reason to repay early as much as possible. Surely fixed rate mortgages don't help;in this respect (i took a tracker to avoid early repayment charges).
Yes it costs sacrifices, but in my opinion it's well worth it if it's possible.

Martico

pieroabcd said:

ReadySteadyPop said:

pieroabcd said:

ReadySteadyPop said:

pieroabcd said:

PRLB said:

including the fact that a home is not just an investment but also a place to live

I would reverse that statement and say that a home is not only a place to live, but an investment: a way to protect the money that you spent and increase it.
I consider my house as the moneybox that I live in.
For me I preferred to buy a 95 years old freehold house (without  fees) instead of a new build for a very simple reason: I want to have exclusive control on the house, not to be at the mercy of someone else's decisions as if I were renting (that is unavoidable when fees apply, even if you "take part" to it).
Ease of resellability comes as a very straightforward consequence of this exclusivity.

Not a great idea to think of a house as a "moneybox" in my opinion, for many it is a "debt-box", that is another story though, but even with freehold you are controlled by the market as you need a buyer and a house is the most illiquid asset there is, especially in difficult markets, many people recently have lost all the money they spent on "improvements" for example.

When you have repaid the mortgage the house is no more a debt.
It's up to you to make the total cost not exceed the market value (for example I decided to repay early as much as I could to minimise the interest).
Think of the alternative: paying someone else's mortgage by paying their rent. Isn't the house still a moneybox compared to a rent that is 100% lost money?
Even if you sell for a loss it's definitely much less than 100%, unlike with a rent.

For the average buyer now that is 30 years of debt payments with probably volatile mortgage debt costs going forward?

One more reason to repay early as much as possible. Surely fixed rate mortgages don't help;in this respect (i took a tracker to avoid early repayment charges).
Yes it costs sacrifices, but in my opinion it's well worth it if it's possible.

I always took the view that a mortgage is inflation-proof, and will get more affordable as nominal wages rise. Interest rates fluctuate up and down, but - unless the economy is Japan-in-the-90s stuffed - rental costs will trend upwards. The earliest of those 30 years are the tightest and then get progressively easier, helped by inflation.