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Property : rent vs buy? Watch

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    (Original post by HucktheForde)
    and no investing in stocks is not worse than investing in property, if thats the case goldman sachs would have an entire portfolio of properties. 20% annual ROI is not impossible for stocks unless you buy the market only.
    This isnt an investing thread but

    1) Everything I have said only applies to buying your primary residence, so the Goldman Sachs argument is silly. Buying multiple properties isnt anywhere near as good an investment since the cost of your leverage is far, far higher and you have to pay CGT on the profits.

    When you buy your primary residence, the mortgage interest repayments are roughly equal to the rent you would otherwise be paying, so the leverage '(i.e. the interest payments) is essentially free. If Goldman Sachs could get interest-free loans then they would be borrowing as much as possible. Thats kind of the point - buying your house is essentially like getting a huge interest free loan, since the money you pay in interest is the money you are no longer paying in rent.


    2) 20% ROI is completely impossible unless you expose yourself to huge amounts of risk. You could get 20% by (eg) leveraging up 3x on S&P futures but theres a good chance your going to bankrupt if theres a market downturn.
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    (Original post by poohat)
    This isnt an investing thread but

    1) Everything I have said only applies to buying your primary residence, so the Goldman Sachs argument is silly. Buying multiple properties isnt anywhere near as good an investment since the cost of your leverage is far, far higher and you have to pay CGT on the profits.

    When you buy your primary residence, the mortgage interest repayments are roughly equal to the rent you would otherwise be paying, so the leverage '(i.e. the interest payments) is essentially free. If Goldman Sachs could get interest-free loans then they would be borrowing as much as possible. Thats kind of the point - buying your house is essentially like getting a huge interest free loan, since the money you pay in interest is the money you are no longer paying in rent.


    2) 20% ROI is completely impossible unless you expose yourself to huge amounts of risk. You could get 20% by (eg) leveraging up 3x on S&P futures but theres a good chance your going to bankrupt if theres a market downturn.
    1) I think you misunderstood this thread from the beginning, this thread isnt about whether you should buy your first house or not, its about whether you prefer buy it now or buy it later depending on what you pursue in life ( stability or progress ). if you are saying buying it early is important because of the benefits the government provide in financing for primary residence (at the expense of freedom as you stated : gotta keep the payments coming). I can respect that opinion/decision.

    Again this wasnt the main purpose of the thread but since you said its bad to rent it out due to changes in policy, i honest dont see how thats going to benefit my main goal which is to get wealthy.


    2)


    3) i just realise you have completely taken me for a ride, since i have never stated anything about stock market. I stated "invest in something that outperforms the real estate" , which can be the stock market, or anything else.
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    (Original post by HucktheForde)


    .
    Those are outliers that had a lucky year. If you stood outside the casino at 3am in the morning then you'd doubtless find people who won 5 figure sums on roulette.

    Note that the 2 year returns for all those funds are drastically lower than the 1 year returns, i.e. they made a lot less in the previous year (i.e. they had a lucky year). Getting over 15% consistently would be considered absolutely stellar for a hedge fund and would make them one of the top funds in the world (there are a few that do achieve this, but you can still argue over how much of it is due to luck and survivorship bias)
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    Buy if you can. Renting is dead money.






    (Original post by HucktheForde)
    This is the million dollar debate again, i want to know what people on here thinks. Should you buy a property early or rent first?

    The upside of buying is you can lock down a house before it appreciates its value and end up being twice as expensive. But on the other hand the interest rates means you are probably going to pay twice its value anyway. You can rent out your newly bought home and let the tenant pay your mortgage meanwhile you live elsewhere cheaper. When your mortgage ends you own a house, compare to the renter who will own nothing.

    Meanwhile if you rent you would be paying to someone else while you own nothing at the end of it. But the upside is you have spare cash and could invest in something that outperforms the real estate and become wealthier, and then buy your property later with cash or with very little mortgage. Also you would have a ton of freedom, one of the biggest problem with buying is once you tie yourself down to a 30 year mortgage, you lose your freedom, and freedom itself can be an important asset. Say if you hate your job and want to quit or if you want to take some risk and go further study or if you want to seek better opportunities, you would think twice as you need to keep the money coming in to pay your monthly fees.

    Discuss.
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    (Original post by poohat)
    Those are outliers that had a lucky year. If you stood outside the casino at 3am in the morning then you'd doubtless find people who won 5 figure sums on roulette.

    Note that the 2 year returns for all those funds are drastically lower than the 1 year returns, i.e. they made a lot less in the previous year (i.e. they had a lucky year). Getting over 15% consistently would be considered absolutely stellar for a hedge fund and would make them one of the top funds in the world (there are a few that do achieve this, but you can still argue over how much of it is due to luck and survivorship bias)

    (Original post by poohat)

    2) 20% ROI is completely impossible unless you expose yourself to huge amounts of risk.
    2 years return still between 15-25 % range. You said it impossible i showed you its possible, but not for everyone so thats a decision to be made by each individual.

    plus as i said again , i am not just referring to stocks, i am referring to any asset class that can outperform property ,if there is none , then just buy property.
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    I would much rather pay to own something than pay to not own something xD
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    Wow. No petty name calling and an actual intellectual debate, ace.

    If you know where you want to be and have a plan set up, then I would buy. If you are someone who likes to float around, then you should rent.

    Of course its not always as straight forward as that with deposits, solicitors fees and what have you when it comes to buying, but if its a direct toss up between the two, buying is the more viable option.
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    sick of this post, people are taking it too seriously.
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    (Original post by HucktheForde)
    2 years return still between 15-25 % range. You said it impossible i showed you its possible, but not for everyone so thats a decision to be made by each individual.
    It is not possible without considerable risk.
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    (Original post by Danie.B)
    you can never lose money on a house, if you buy a house you can either make the money back in rent, or sell it years later for *more* money due to inflation
    That is really naive, and a major driver for price bubbles. Lots of people have lost money on houses. Look at the 10 year graph here (and below) - if you'd have bought at the peak in 2007, you'd have to have waited until 2015 to get the same price. That doesn't include stamp duty and the various other fees that you need to pay to buy and sell, or depressed regions.
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    (Original post by Avaia)
    I would much rather pay to own something than pay to not own something xD
    Would you rather pay for something that's going down in value, or rent? Prices can, and do, go down. Property has historically been a good long-term bet, but it isn't without its costs (maintenance, insurance etc), and you may need to wait ~10 years if you buy at the wrong time.
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    (Original post by RogerOxon)
    Would you rather pay for something that's going down in value, or rent? Prices can, and do, go down. Property has historically been a good long-term bet, but it isn't without its costs (maintenance, insurance etc), and you may need to wait ~10 years if you buy at the wrong time.
    I wouldn't buy as a monetary investment. I'd buy so that I have a home that I could pass onto my kids and what not, it would be mlre a stability thing for the future rather than to make a profit
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    (Original post by Avaia)
    I wouldn't buy as a monetary investment. I'd buy so that I have a home that I could pass onto my kids and what not, it would be mlre a stability thing for the future rather than to make a profit
    That's a good approach IMO, although, with house prices where they are, it's a long-term payment commitment. Many will need to sell to fund retirement / nursing home fees.
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    (Original post by RogerOxon)
    That's a good approach IMO, although, with house prices where they are, it's a long-term payment commitment. Many will need to sell to fund retirement / nursing home fees.
    like hell am I going into a home 😂😂😂
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    (Original post by RogerOxon)
    It is not possible without considerable risk.
    ya investment has risk. what poo says is its impossible unless you heavily leverage while in truth is you can make that if you take calculated and educated risk.
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    If you think you are going to be in an area for a long time, then buy. Possibly depends on the kind of career/line of work you choose.
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    I think this choice depends on your lifestyle. If you're someone who doesn't like being tied down to anything and wants to move around a lot then renting is a good option. If you want stability and like living in the same place then buying is the bettter option.
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    Renting is dead money. You are paying someone to live on what is effectively their house. You don’t get it returned to you when you move out. (Deposit maybe)

    (Original post by Danie.B)
    rent is dead money

    you can never lose money on a house, if you buy a house you can either make the money back in rent, or sell it years later for *more* money due to inflation
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    (Original post by RogerOxon)
    That is really naive, and a major driver for price bubbles. Lots of people have lost money on houses. Look at the 10 year graph here (and below) - if you'd have bought at the peak in 2007, you'd have to have waited until 2015 to get the same price. That doesn't include stamp duty and the various other fees that you need to pay to buy and sell, or depressed regions.
    yeah, I was assuming you wouldn't be dumb enough to sell a house you want to make money on before you can actually make money on it.

    the question was buy or rent. Sorry for not going into detail of how you can't lose money on a house unless you sell at a stupid point. However, it's pretty guaranteed you're not going to make any money from the rent you pay each month, so I'm still going to stand by my opinion.
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    (Original post by Hacama17)
    Renting is dead money. You are paying someone to live on what is effectively their house. You don’t get it returned to you when you move out. (Deposit maybe)
    Are you agreeing with me or are you actually suggesting that getting your deposit back makes renting worth it?
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