You can't go wrong with property investments

[DimPrawn]

The Buyer/Seller

Average house price (1980): £23,348
Average house price (2000): £81,202
Deductions: Stamp duty £233, legal and other fees £700, maintenance £16,126, mortgage interest £41,091, capital repaid £14,942
Overall loss: £15,238
Sources: Nationwide, Savills, MoneyWeek

The Renter

Rental cost of average house (1980-2000): £80,630
Gain from buyer deposit if invested in shares: £101,339
Gain from other costs if invested in shares: £21,179
Overall gain: £41,888
Sources: Savills, Barclays Equity Gilt study, MoneyWeek


Time to stop laughing at renters!

[BrilloPad]

The Buyer/Seller

Average house price (1980): £23,348
Average house price (2000): £81,202
Deductions: Stamp duty £233, legal and other fees £700, maintenance £16,126, mortgage interest £41,091, capital repaid £14,942
Overall loss: £15,238
Sources: Nationwide, Savills, MoneyWeek

The Renter

Rental cost of average house (1980-2000): £80,630
Gain from buyer deposit if invested in shares: £101,339
Gain from other costs if invested in shares: £21,179
Overall gain: £41,888
Sources: Savills, Barclays Equity Gilt study, MoneyWeek


Time to stop laughing at renters!

Good article - I am sure there must be something wrong here. Is it the "Gain from buyer deposit if invested in shares"? Seems very large to me.....

[DimPrawn]

Good article - I am sure there must be something wrong here. Is it the "Gain from buyer deposit if invested in shares"? Seems very large to me.....

Remember the shares are pre dot-com crash. They went through the roof (geddit!)

http://news.bbc.co.uk/1/hi/business/7726389.stm

[Alf W]

Time to start laughing at people duped by primary school level statistics.

It forgets that the Buyer has an asset worth £76k in that example.

Also, the Renter has turned their potential deposit (prob around £2k) into £100k in 20 years?? How so?

Utter tosh!

[Francko]

The Renter

Rental cost of average house (1980-2000): £80,630
Loss from buyer deposit if invested in shares:
Loss from other costs if invested in shares:
Overall loss:
Sources: Savills, Barclays Equity Gilt study, MoneyWeek


Time to stop laughing at renters!

[expat]

Remember the shares are pre dot-com crash. They went through the roof (geddit!)

http://news.bbc.co.uk/1/hi/business/7726389.stm

Conclusion: renting is a good idea if you can invest the deposit in a boom.

IOW if you can foretell the future, you can get rich.

[DimPrawn]

Time to start laughing at people duped by primary school level statistics.

It forgets that the Buyer has an asset worth £76k in that example.

Also, the Renter has turned their potential deposit (prob around £2k) into £100k in 20 years?? How so?

Utter tosh!

capital repaid £14,942

25 yr mortgage, 20 year (1980 - 2000) period hardly any capital is repaid, it's almost all interest paid.

You should get a job in investment banking!

[TimberWolf]

Time to stop laughing at renters!

Presumably their landlords did well during that period too? Renting is clearly a source of free money and we should base our whole economy on it.

[DimPrawn]

Presumably their landlords did well during that period too? Renting is clearly a source of free money and we should base our whole economy on it.

Hey, I'm just reporting the "facts".

The conclusion is simple.

Sometimes it better to be a renter and sometimes it is better to have a mortgage and pay interest.

But I prefer to own property outright and pay neither.

[TimberWolf]

Hey, I'm just reporting the "facts".

The conclusion is simple.

Sometimes it better to be a renter and sometimes it is better to have a mortgage and pay interest.

But I prefer to own property outright and pay neither.

It's better to be a renter if your rent is much less than a mortgage payment, in the short term. I have doubts about their figures and one day I might even write an app. to run through this numerically, taking inflation etc into account.