Investing money

[Cyclone]

I agree TJC1. I bought my first house just after my nineteenth birthday, my friends thought I was mad. I had been saving up my deposit for a year, still going out but spending little on booze. A few years down the line my friends were struggling much more than me as they were used to a frivolous lifestyle and found it hard to save. I moved to a three bed semi just after my twenty first birthday then a four bed detached when I was twenty six. I paid off my mortgage by the age of thirty three. I only re mortgaged to buy my third property. If you buy the right property its less risky than any other investment and you can always downsize if you need to release money for retirement.

 

Not practical for anyone going to uni of course, they won't be graduating and starting work until they're 21 or 22.

And house prices tripled in the space of 7 years, making it much more difficult to pay them off quickly.

 

It's not an investment though, don't ever confuse a home with an investment.

[Chez2]

Not practical for anyone going to uni of course, they won't be graduating and starting work until they're 21 or 22.

And house prices tripled in the space of 7 years, making it much more difficult to pay them off quickly.

 

It's not an investment though, don't ever confuse a home with an investment.

 

I started work during my second year of further education. After that I have done nine years part time further education. I don't want to take this thread off track but it might be useful to young people to consider getting a job where employers fund your study while you work. It isn't always best to do degree full time. My way I had experience, qualifications, a job/career and a property without any debt.

 

House prices weren't cheap when I started out compared to salaries. We also had very high interest rates too. The minimum deposit was 10% of the mortgage. People aren't as bad off as they think, they just expect more than young people did back a generation or two ago. The cheapest house we could find in livable condition was seven times our salary. It has the smallest kitchen (only a couple of cupboards on one side and a small lounge where the stairs came down into.

 

 

Your comment here is a fatal error ....It's not an investment though, don't ever confuse a home with an investment.

 

 

It is a home but is most definitely is an investment. You must always take re sale and the area into consideration when buying a house. This is what has allowed us to move up the property ladder even though we have never been particularly well paid.

 

We have moved house rather than extend a home we knew we would never be able to recover the cost of the extension in the re sale value.

Edited September 24, 2015 by Chez2
house prices + fatal error

[Cyclone]

I bought in 2001, houses were much, much, cheaper compared to average income.

 

Graduate starting salary was between 15 - 20 k and houses in Sheffield were 50k.

Now graduate starting salary is 25 - 30, and houses are 120k.

 

---------- Post added 24-09-2015 at 13:56 ----------

 

The cheapest house we could find in livable condition was seven times our salary. It has the smallest kitchen (only a couple of cupboards on one side and a small lounge where the stairs came down into.

 

You simply wouldn't be allowed to buy that today then. Unless you put down 3 years salary as a deposit!

[TJC1]

I bought in 2001, houses were much, much, cheaper compared to average income.

 

Graduate starting salary was between 15 - 20 k and houses in Sheffield were 50k.

Now graduate starting salary is 25 - 30, and houses are 120k.

 

---------- Post added 24-09-2015 at 13:56 ----------

 

 

You simply wouldn't be allowed to buy that today then. Unless you put down 3 years salary as a deposit!

 

Theres new schemes. Help to buy, top up ISA.

 

It went through a stage of silliness. 30% or 40% deposits.

Prohibitive to a lot of people on average salaries.

[Chez2]

I would also like to add.....there are always cycles of boom and bust. I have seen at least three cycles while I have became a home owner in 1985. Prices did rise in the early 2000s but they fell again and are only slowly recovering now. I sold two houses in a housing slump and did well with the amount of viewings and had a quick sale at a good price. This is because I treated it as a home and an investment.

[Spacebadger]

Does anyone have any experience or views on residential property funds? I've been looking at Hearthstone recently as an alternative to buying (outright) a small flat to rent out for a regular income.

[Chez2]

If there are two of you it doesn't take long to save up 18 months salary each unless you have made the mistake of moving out into rented property first.

 

We had to buy insurance policies back in my day to safeguard against a shortfall in deposit.

 

I have been through the income and outgoing of many younger friends who say they 'can't afford' to buy a house. It is achievable for a lot of people with the right attitude to money. We all make our own choices on how we live our lives and spend our money.

 

---------- Post added 24-09-2015 at 14:12 ----------

 

Cyclone - my salary was £3,000 and my house was built at £22,000 but because of the miners strike there were a lot of repossessed houses available for 20-21K. Add to that high interst rates and you will see its not as bad as people think at the moment.

[Cyclone]

I would also like to add.....there are always cycles of boom and bust. I have seen at least three cycles while I have became a home owner in 1985. Prices did rise in the early 2000s but they fell again and are only slowly recovering now. I sold two houses in a housing slump and did well with the amount of viewings and had a quick sale at a good price. This is because I treated it as a home and an investment.

 

They didn't actually fall at all. They went pretty flat in 2007, but have since risen and the average house price stands at 5 times the average income. Up until 2000 it had never gone above 4 times the average income.

 

It's not an investment unless you plan to move out someday and live in a tent.

[Chez2]

If you look at the register of house sales outside London you will see you are mistaken.

 

You can take advantage of the investment if your house moves up in value at a greater speed than others in the same Town or City. This gives you more freedom for your next purchase or as in our case, release equity to buy another property, we didn't want a foreign mortgage we didn't understand.

 

You don't have to be homeless to use the money from your house, many people downsize. We have two houses and an apartment so we wouldn't need to live in a tent. We will downsize our house in the future to something smaller. I'm not sure if you are trying to be argumentative or if you just don't understand what I've written. I worked out my plan of action as a teenager so its not hard to understand.

[Cyclone]

London is pretty unusual. If you look at the rest of the country, and Sheffield in particular, you'll see that I'm correct.

 

Downsizing is of course a less extreme option than living in a tent, but I still maintain that to look at your home as an investment is a mistake.

 

If you have 3 properties, and only 1 home, then 2 of those properties ARE investments. That's entirely different to saying that your home is an investment.

 

I'm not saying "don't think of your home as an investment" to be argumentative, I'm saying it because the way you look at and think about an investment is very, very, different (or should be) to how you think about your home. The two are not beneficial, an investment is about maximising your return and minimising risk. A home is about standard of life and liking where you live.

You might choose to do work on a home that makes absolutely no sense to do on an investment property, because you won't get the money back in a sale or in rental income.

Edited September 24, 2015 by Cyclone