Renting vs buying in 2017
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Anyway, getting back to the original question... maybe I'm looking at it simplistically, but if it costs a similar amount per month to rent as to buy, then buying is the better option? I mean, forget "investment", it's a question of whether you get to stop paying that amount at some point or not...0
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Anyway, getting back to the original question... maybe I'm looking at it simplistically, but if it costs a similar amount per month to rent as to buy, then buying is the better option? I mean, forget "investment", it's a question of whether you get to stop paying that amount at some point or not...[/QUOTE
Do you mean rent for the same sort of house you’re likely to buy?“What means that trump?” Timon of Athens by William Shakespeare0 -
qwert_yuiop wrote: »
Do you mean rent for the same sort of house you’re likely to buy?
Yes... I mean it's going to be an approximation....
I've generally found that I'm not likely to rent a place which is cheaper than a mortgage (actually, in the greater London area, it generally worked out more expensive to rent, like-for-like).
When I moved to NI, I was renting a place for about £600pcm, and that's approximately what my basic mortgage payment has been the last few years...0 -
qwert_yuiop wrote: »There was a weird discussion on another thread about a BMW driver who couldn’t afford £190 to repair a scrape. It baffled me that someone would leave themselves living that close to penury to have a nice car. Let’s hope he hasn’t a prestige mortgage - he’s in a scrape now.
Have you a link to the thread?0 -
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Yes... I mean it's going to be an approximation....
I've generally found that I'm not likely to rent a place which is cheaper than a mortgage (actually, in the greater London area, it generally worked out more expensive to rent, like-for-like).
When I moved to NI, I was renting a place for about £600pcm, and that's approximately what my basic mortgage payment has been the last few years...
Then it’s a better idea to buy, unless we get a depreciation again. Doesn’t leave you much further forward?“What means that trump?” Timon of Athens by William Shakespeare0 -
qwert_yuiop wrote: »Then it’s a better idea to buy, unless we get a depreciation again. Doesn’t leave you much further forward?
Depreciation is another thing... It basically hits your deposit.
So if you put in X up front as the deposit, if you get X back on sale, you've lost at the rate of inflation (or you could validly say: lost the interest you would have gained off a savings account, which may be a more reasonable way of putting it). Get back more than X plus interest, and you can't really say you've lost, even if the house value has gone down.
Note: this has implications for large deposits. You ideally don't want to put in a deposit larger than the "real" (undepreciable - if that's a word) value of a property...0 -
Depreciation is another thing... It basically hits your deposit.
So if you put in X up front as the deposit, if you get X back on sale, you've lost at the rate of inflation (or you could validly say: lost the interest you would have gained off a savings account, which may be a more reasonable way of putting it).
Defined as opportunity cost
Get back more than X plus interest, and you can't really say you've lost, even if the house value has gone down.
Not really. You still have to pay the balance of the mortgage
Note: this has implications for large deposits. You ideally don't want to put in a deposit larger than the "real" (undepreciable - if that's a word) value of a property...
Depending on what else you can do with your money and what interest you’re paying, you’re usually better to make the biggest deposit you can.
Unless you have to sell, in which case that negative equity, where the property is worth less than the mortgage, is a right nuisance. It all depends how secure you are in your employment and earning capability.“What means that trump?” Timon of Athens by William Shakespeare0 -
qwert_yuiop wrote: »There was a weird discussion on another thread about a BMW driver who couldn’t afford £190 to repair a scrape. It baffled me that someone would leave themselves living that close to penury to have a nice car. Let’s hope he hasn’t a prestige mortgage - he’s in a scrape now.
I've just read the thread???
http://forums.moneysavingexpert.com/showthread.php?t=5709581&highlight=child+run+into+side+of+my+car+causing+damage
Not at ANY point did the BMW owner say they couldnt afford it. Someone damaged their car, they believed the other person should pay.
Not at ANY point did the BMW owner say the car was on finance.
Not at ANY point did the BMW owner tell us the age of the car. It could quite easily have been something quite old, but pristinely kept.
Not at ANY point did the BMW owner say they had no spare cash and were struggling to make ends meet.
An awful lot of assuming by people with chips on their shoulders on that thread - as someone on it said, the guy should repost it saying he drove a Nissan and he would have got more objective responses.
Do you think if someone damages your car he should say "No, No, dont worry about it, i drive a BMW, i can afford to pay for your mistakes for you"?
And £190 sounds about right for spraying a wing - it doesnt cost more to spray a BMW wing than a Mondeo wing BTW.
If someone damaged my Pride & Joy i'd be seriously narked about it too.0 -
qwert_yuiop wrote: »Depending on what else you can do with your money and what interest you’re paying, you’re usually better to make the biggest deposit you can.
Unless you have to sell, in which case that negative equity, where the property is worth less than the mortgage, is a right nuisance. It all depends how secure you are in your employment and earning capability.
The mortgage balance was kind of covered earlier - you have to pay rent or the mortgage. If the month to month costs are similar then the mortgage balance doesn't signify - the money is going out anyway.
The "negative equity" thing winds me up a bit - you see people making declarations about it when it doesn't affect them. It seems to be a common misunderstanding that it's where your property value is less than you paid for it, when actually it's when (if you sold) the money you got would not cover your outstanding mortgage...0
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