Nice House vs nice Car? Which takes priority?
Discussion
johnwilliams77 said:
Just to add some balance to the house only camp
I am in my late 20s, no house, but 4 cars. 3 of which are worth around 50k and quite confident they have low /slow depreciation. I have savings to afford a deposit on a place but I am happy with my place i rent (not living with parents either). May live to regret this decision but cars are where I get enjoyment
That's a very brave thing to say, specially on here I am in my late 20s, no house, but 4 cars. 3 of which are worth around 50k and quite confident they have low /slow depreciation. I have savings to afford a deposit on a place but I am happy with my place i rent (not living with parents either). May live to regret this decision but cars are where I get enjoyment
Honestly though, i think you will regret it. I've been renting for 12 months now and been in 2 different flats and i've already realised how much of a colossal waste of money it is.
Pretty much my main and only passion is cars, which is a nightmare as it's an expensive hobby, but the house is the main focus for me going forward. I'm 25 and already feel like i've had most of my fun now.
At least you've got it all set and ready to go when the time comes.
culpz said:
That's a very brave thing to say, specially on here
Honestly though, i think you will regret it. I've been renting for 12 months now and been in 2 different flats and i've already realised how much of a colossal waste of money it is.
It's ironic really when people complain of depreciation on new cars but still buy them and often rent housing to be able to do so, making it a double whammy when it comes to wasting money.Honestly though, i think you will regret it. I've been renting for 12 months now and been in 2 different flats and i've already realised how much of a colossal waste of money it is.
We bought our current house when I was 24, it is a detached house that is about 1600 square feet, when we decided to have kids. At the time we started the purchase it was a stretch but I changed jobs for a large increase right in the middle of the purchase and we could/should have backed out and bought something bigger that would now be a much bigger jump financially. I'll be 42 this year and we are getting close to paying off the mortgage thanks to a small over payment.
I've had expensive (compared to our income) cars over the years, nice holidays, hobbies, etc. all at the expense of not moving to somewhere just a bit bigger. We never saw the point of moving unless it was to somewhere much larger as our current place was more than big enough for the 4 of us. Yes I'd have liked a garage large enough to store several cars and be usable as a workshop, yes I'd have liked a couple of acres of grounds for more privacy, but no I wouldn't have liked the impact to our ready cash, savings and the date we are free from a mortgage.
As the kids will be moving out in a couple of years we will be getting back two extra rooms and a bathroom, which will be like moving to somewhere that is just a bit bigger but at no extra cost. Having no mortgage will also be incredibly liberating, the next step is to purchase outright my forever cars, once that is done our fixed outgoings shrink to next to nothing, less than £900 a month including food and petrol. Part time here I come!
I've had expensive (compared to our income) cars over the years, nice holidays, hobbies, etc. all at the expense of not moving to somewhere just a bit bigger. We never saw the point of moving unless it was to somewhere much larger as our current place was more than big enough for the 4 of us. Yes I'd have liked a garage large enough to store several cars and be usable as a workshop, yes I'd have liked a couple of acres of grounds for more privacy, but no I wouldn't have liked the impact to our ready cash, savings and the date we are free from a mortgage.
As the kids will be moving out in a couple of years we will be getting back two extra rooms and a bathroom, which will be like moving to somewhere that is just a bit bigger but at no extra cost. Having no mortgage will also be incredibly liberating, the next step is to purchase outright my forever cars, once that is done our fixed outgoings shrink to next to nothing, less than £900 a month including food and petrol. Part time here I come!
Since leaving my life behind to run into the arms of a foreign village girl I lost my home. I made the choice to start again from scratch.
But I kept the cars.
So for me cars are priority.
In hindsight I've had no mortgage for a few years now. I live in a cheap country my bank balance is on the up so I'm looking at building something.
The cars come first though so it shall be designed around the garage.
But I kept the cars.
So for me cars are priority.
In hindsight I've had no mortgage for a few years now. I live in a cheap country my bank balance is on the up so I'm looking at building something.
The cars come first though so it shall be designed around the garage.
Monkeylegend said:
It's ironic really when people complain of depreciation on new cars but still buy them and often rent housing to be able to do so, making it a double whammy when it comes to wasting money.
Too right. I only lease my current car on a cheap deal, luckily enough, so renting a car at a good price is fine. Property on the other hand, not so much.culpz said:
Too right. I only lease my current car on a cheap deal, luckily enough, so renting a car at a good price is fine. Property on the other hand, not so much.
In a falling property market renting is great BUT I'd wager nearly all UK residences are unable to judge when that might happen and if they get it wrong they get caught out badlytankplanker said:
We bought our current house when I was 24, it is a detached house that is about 1600 square feet, when we decided to have kids. At the time we started the purchase it was a stretch but I changed jobs for a large increase right in the middle of the purchase and we could/should have backed out and bought something bigger that would now be a much bigger jump financially. I'll be 42 this year and we are getting close to paying off the mortgage thanks to a small over payment.
Interesting, you've been in your house 18 years, almost half your life! I couldn't manage that, I seem to get the itch to move in less than 18 months, longest I've ever stayed in one property was 3 years. Life changes direction and I need to follow it, or my personal wants change, and I need to move to fulfil them. I just cannot imagine ever staying put for that long. okgo said:
Look at how much of a new mortgage monthly payment is capital for the first few years, renting does bring something to the table.
Not just that but look at the frictional costs with moving home, SDLT, legals etc. would take out a good 1-2 years of rental cost alone in London Z1-4. A no brainer in a flat market if you plan to move regularly, be it to be nearer friends/experience different areas or move with work.Some interesting reading and opinions.
For me there needs to be a balance but I wouldn't sacrifice my house for my cars. Funny thing is that on here someone commented on my property compared to the car I had parked on the driveway! The car being a 10 year old CLS63 and the house being a 4 bed converted bungalow as if the car was more fancy/costly in comparison to the house. Value for value it really isn't that case at all.
I guess I view it in the same way that renting a property and having a more expensive car due to that isn't my thing. I can appreciate the thought behind it but owning your own space and making your own is a bigger part of life where as cars are ultimately a hobby for me (and mode of transport obviously.
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For me there needs to be a balance but I wouldn't sacrifice my house for my cars. Funny thing is that on here someone commented on my property compared to the car I had parked on the driveway! The car being a 10 year old CLS63 and the house being a 4 bed converted bungalow as if the car was more fancy/costly in comparison to the house. Value for value it really isn't that case at all.
I guess I view it in the same way that renting a property and having a more expensive car due to that isn't my thing. I can appreciate the thought behind it but owning your own space and making your own is a bigger part of life where as cars are ultimately a hobby for me (and mode of transport obviously.
)DonkeyApple said:
If you need size. Otherwise, you take a more modest property and due to the smaller debt commitment you have additional money to over pay.
Of course, but many don't think like that and will spend right to their max budget whether they have to or not. An amazing amount of people I have spoken to, who are either home owners, or are going through the motions have little idea about how the interest is loaded.okgo said:
DonkeyApple said:
If you need size. Otherwise, you take a more modest property and due to the smaller debt commitment you have additional money to over pay.
Of course, but many don't think like that and will spend right to their max budget whether they have to or not. An amazing amount of people I have spoken to, who are either home owners, or are going through the motions have little idea about how the interest is loaded.Very few people actually comprehend the true cost of borrowing from their future income.
okgo said:
Of course, but many don't think like that and will spend right to their max budget whether they have to or not. An amazing amount of people I have spoken to, who are either home owners, or are going through the motions have little idea about how the interest is loaded.
Thankfully when interest is calculated daily and it is of a 1-2.5% cost it really isn't that bad at all. okgo said:
Look at how much of a new mortgage monthly payment is capital for the first few years, renting does bring something to the table.
My view exactly. Now with the new SDLT with a 3% premium on multiple properties its even less attractive.Add to that the fact that, in general, an expensive house yields poorly rent wise, and a convenient, yet cheap, city property gives a decent yield as against purchase cost. Then account for the maintenance costs of a modest flat as against a rambling old house.
Example I was discussing yesterday
http://www.rightmove.co.uk/property-to-rent/proper...
At a guess, this place, very central Ilkley, decent plot and a big old house. At a guess, I would say its £2.5m worth. So, say you tied up £500k capital in a deposit, mortgaged £2m at 4% that is £6666 PCM purely on interest. Or £3250 PCM to rent - with maintenance taken care of by another party.
That is before you factor in the whopping SDLT it would attract.
Or - buy multiple £80k studio apartments in central Leeds that yield £550 PCM and have sweet FA maintenance other than a lick of paint every few years. No SDLT. Yes, management charges to be factored in and the new tax rules cause a headache in being unable to offset mortgage interest. However, 6 - 7 of those units cover the rent on a £2.5m property and have cost you circa £500k - or your deposit on the Ilkely home...
There are other factors to consider, such as geographical diversification for example (which could be favourable or unfavourable depending on your view), void periods etc (which could be covered by insurances or simply an allowance in terms of portfolio numbers etc.
The added advantage is your main residence carries the benefits of renting insofar as you can downsize/upsize depending on your circumstances whenever it might suit your bank balance. You want to relocate, you can do so without massive SDLT and sale costs. Don't like your neighbours? Again, easy to change etc.
Only downside I really see is the feeling of it being a true "home" and/or furnishings being purchased that are house specific and the fact you can't modify the property to your exacting requirements without landlord consent - and you'd probably have little desire to sink money into someone else's property.
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