Home Ownership

[dwayne]

I think real estate is a one way bet in the long term, as long as you have enough liquidity to ride out any short term troughs that come along. So your mate will be OK - as long as he downsizes at the right time, and on his own terms.

The other option on the £500k scenario is to sell up, buy 2 properties at £250k, which means you can live in one, and the other will provide rental income for you.

It beats working for a living.

PS - what is your work in NYC ??

I thought you were Smart, Mart?

Firstly what the f*** is real estate, we are in England mate.

Secondly Ive presented so much evidence here to suggest that "Real Estate" is a poor long term investment vs a balanced portfolio or even government bonds for fucks sake, why don't you stand up and take notice, the numbers don't lie!! experts like Barton Biggs and Warren Buffett are not wrong.

Prove to me that in Europe or the states that property is delivers the best returns or even the most consistant or safe returns, I bet you can't.

...and don't get me wrong I own a property and am looking abroad as well, but I also have money in hedge fund of funds and I know which will give me a better return in the short term and I also know that my bonds will give me a better return long term.

 

[Mellor 3 Ward 4]

Very interesting debate.

House prices are crazy in the South - but what is the answer?

Build more houses? Fine - if they're the sort that Young people will be able to afford - in the 70s/80s and 90s all the developers wanted to build was 4/5 bed houses - that's where the big profits are - but no person starting out can possibly afford those.

Recently I believe that 30% of a new development over a certain number of dwellings has to be 'affordable'
- this is a step in the right direction. Also more houses should be on Brown fiels sites - again this IS hat has started to happen.

However just dumping thousands of houses over the South East is NOT the answer - we don't have the infastructure, water, schools, hospitals etc to cope.

There are after aa 800, 000 EMPTY houses in the UK. Yes 800,000 and that number is growing.

Problem is they're in areas where nobody wants to live. IMO the govt should be encouraging Big Businesses to relocate - move the jobs and the people will follow. Those who try to travel on our SE roads know that the Transport links area are crap - go up North and in the main the Motorways are empty.

The govt should take the lead and move a bunch of their own depts - the South East is gonna fall into the Channel soon.

As far as our kids are concerned - I'm sure that in whatever number of years we'll end up 'downsizing' in order to give our Children some cash to get on the ladder. Can't see how they'll manage it otherwise.

 

[chip]

I thought you were Smart, Mart?

Firstly what the f*** is real estate, we are in England mate.

Secondly Ive presented so much evidence here to suggest that "Real Estate" is a poor long term investment vs a balanced portfolio or even government bonds for fucks sake, why don't you stand up and take notice, the numbers don't lie!! experts like Barton Biggs and Warren Buffett are not wrong.

Prove to me that in Europe or the states that property is delivers the best returns or even the most consistant or safe returns, I bet you can't.

...and don't get me wrong I own a property and am looking abroad as well, but I also have money in hedge fund of funds and I know which will give me a better return in the short term and I also know that my bonds will give me a better return long term.

I'd agree with most of that except the part about the bonds giving the better long term growth. Bonds have done slightly better than property since 1910, but considerably wirse than balanced funds, for example. They are, generally, more reliable though - is that what you mean?

 

[dwayne]

I'd agree with most of that except the part about the bonds giving the better long term growth. Bonds have done slightly better than property since 1910, but considerably wirse than balanced funds, for example. They are, generally, more reliable though - is that what you mean?

I mean they have performed better historically and they are the dullest of the dull investment vehicles and YES the key factor is that they are very very safe, US Treasury bonds, for instance have backing from the US Government and thus no default risk.

 

[Hunting 784561]

I thought you were Smart, Mart?

Firstly what the f*** is real estate, we are in England mate.

Secondly Ive presented so much evidence here to suggest that "Real Estate" is a poor long term investment vs a balanced portfolio or even government bonds for fucks sake, why don't you stand up and take notice, the numbers don't lie!! experts like Barton Biggs and Warren Buffett are not wrong.

Prove to me that in Europe or the states that property is delivers the best returns or even the most consistant or safe returns, I bet you can't.

...and don't get me wrong I own a property and am looking abroad as well, but I also have money in hedge fund of funds and I know which will give me a better return in the short term and I also know that my bonds will give me a better return long term.

Well Dwayne - firstly just to establish my credentials...I actually sell commercial property, globally, to financial corporations. Investment banks are my speciality, including your current employers funnily enough. When you work in property, internationally, like I do, they all tend to call it real estate.

But hey, 'mate' that doesnt really matter, does it

If you read my post again, but carefully this time, I didn't say property was a better investment than bonds or equities, I said it was a good long term investrment, if you are able to factor out short term cyclical corrections.

and frankly - only a financially illiterate fool would care to argue otherwise.

 

[dwayne]

Well Dwayne - firstly just to establish my credentials...I actually sell commercial property, globally, to financial corporations. Investment banks are my speciality, including your current employers funnily enough. When you work in property, internationally, like I do, they all tend to call it real estate.

But hey, 'mate' that doesnt really matter, does it

If you read my post again, but carefully this time, I didn't say property was a better investment than bonds or equities, I said it was a good long term investrment, if you are able to factor out short term cyclical corrections.

and frankly - only a financially illiterate fool would care to argue otherwise.

oh ok you're a glorified estate agent then, explains a lot.

As for financial illeterate fools, I suppose Warren Buffett and Barton Biggs fall into that category do they? - both these two are non-believers in property as an investment vehicle for your average joe investor and have both stayed well away from it.

..but like I said before property still interests me

1) I need somewhere to live
2) I quite fancy a holiday home.

 

[acrossthepond]

To pick up on the other half of the conversation in this thread, and give an example of the limits, or not, of how the free market for accomodation can work:

Rent control (the mechanism whereby rents were fixed to make housing affordable for people) was fairly recently abolished in Bedford-Stuyvesant (a bit of New York) rents jumped from $400 pcm to in excess of $2000 pcm more or less overnight.

This is, in very simple terms, what happened, over a longer period of time, in the Uk. The British government needs to take a view on whether, and if so how much, it wants to support the ability of key workers to live in high-priced areas. I'm not sure anyone really has the answer to how to address the root of the problem, rather than the symptoms though. If they have, they need to be shouting a bit more loudly.

The crazy thing is that in most cases, it's still cheaper to rent than to buy in NYC, even with the tax offset.

 

[Hunting 784561]

oh ok you're a glorified estate agent then, explains a lot.

As for financial illeterate fools, I suppose Warren Buffett and Barton Biggs fall into that category do they? - both these two are non-believers in property as an investment vehicle for your average joe investor and have both stayed well away from it.

..but like I said before property still interests me

1) I need somewhere to live
2) I quite fancy a holiday home.

Nothing remotely like an estate agent I'm afraid, I'm a Director of a specialised property outsourcing group.

 

[Bluejuice]

I honestly can't see any hope of owning a home in my lifetime right now.

I currently rent a house that I have to share with 4 other people, and that's expensive enough as it is.

I appreciate that I could get more for less if I moved away from Brighton, but I really don't want to. And at any rate I'd still only be looking at rental options as taking out a mortgage on my own wouldn't even get me a bedsit in Rotherham

 

[Uncle C]

The only way this would work is by downsizing, ie, buying a cheaper house or moving to a cheaper area.

OK lets have a look at what happens when you get to retirement age. You are comfortable in your nice detached house, you have got to know your neighbours and are set for a happy retirement.

BUT

In order to make it work you have to move into a smaller house or flat - no room for your children to visit, no garden, no garage, noise from adjoining property, kids running wild outside and a complete upheaval from places and friends you love.
Not much to look forward to is it?

 

[Gully]

That is why there are retirement complexes, so old people can downsize with peace of mind in the knowledge that where they go to there won't be kids tearing the place up or some bloke fixing broken down motors on the drive next door.

 

[acrossthepond]

Well Dwayne, I don't know finance in the same way that you do, working in derivates for a bank, but I think it's really interesting the way you present your arguments.

Have you read carefully the article in your post (and it's too long to quote again (P6)) commencing

"This article is US-centric but very interesting" ?

Because SmartMoney, the authors, are marketing at you like hell, and are highly selective about the information they present and the way they present it. It's a well written piece, but it's intended to drive business, not provide a balanced view on relative investment behaviours.

In my opinion, clearly.

 

[Uncle C]

That is why there are retirement complexes, so old people can downsize with peace of mind in the knowledge that where they go to there won't be kids tearing the place up or some bloke fixing broken down motors on the drive next door.

Thats fine for "old people" but we are all living long and fitter.
60-65 is not old. Would you volunteer to go into an old peoples complex at this early age? It would drive me up the wall.

Why do you think so many old people stay in the family home till they die?

 

[Curious Orange]

... And how come the old folk get way cheaper places to live? Flicking through the paper you get half-excited because you see somewhere advertised as £110,000 and 2 bedrooms, only to see the immortal words "Warden Assisted".

 

[Curious Orange]

The only places around here that are near what I could afford are erroneously labelled "Studio Flats", but there is no f***ing way I am living in a bedsit.

 

[Gully]

Uncle C, no I wouldn't, and at this stage perhaps I should add that I am in favour of voluntary euthanasia. I will not be reduced to living in an old folks home, stinking of a mixture of pee and stale cabbage. I do however quite fancy the idea of an American style retirment village, with pond and golf course etc, but only for as long as I am fit enough to enjoy it.

 

[Uncle C]

I am in favour of voluntary euthanasia.

Now theres a novel way to sort the pension crisis

 

[Lord Bracknell]

Recently I believe that 30% of a new development over a certain number of dwellings has to be 'affordable'
- this is a step in the right direction.

And - where the threshold for the requirement to include affordable housing kicks in where the development exceeds 25 or more new dwellings, how common is it for developers to parcel up their proposals into packages of 24 new houses?

 

[dwayne]

Well Dwayne, I don't know finance in the same way that you do, working in derivates for a bank, but I think it's really interesting the way you present your arguments.

Have you read carefully the article in your post (and it's too long to quote again (P6)) commencing

"This article is US-centric but very interesting" ?

Because SmartMoney, the authors, are marketing at you like hell, and are highly selective about the information they present and the way they present it. It's a well written piece, but it's intended to drive business, not provide a balanced view on relative investment behaviours.

In my opinion, clearly.

I had noted it, I was desperately trying to entice someone to argue the contrary but so far no one has stepped up to the plate!

Even by insulting a "Director of a specialised property outsourcing group" - I still couldn't get him to present a case to me why I should put my money in property as opposed to other things.

Oh well.

 

[Chicken Run]

... And how come the old folk get way cheaper places to live? Flicking through the paper you get half-excited because you see somewhere advertised as £110,000 and 2 bedrooms, only to see the immortal words "Warden Assisted".

thats becasue tere are fewer buyers of such properties, most "old" people are happy and living longer in there own homes now so demand is less