Dod101 wrote:Gerry557 wrote:I would look less at the finance than the issues with renting. Can you find a rented place that will be available for your timescale and with all the problems that renting instill.
Not being able to decorate as you wish, not being able to change the garden, some might not even allow pictures on the wall etc
Then you get issued notice, the hassle of planing another house move whilst trying to find another property that is available and to your liking. You might not have even unpacked from the last move!
This may be a bigger or smaller issue depending on location, age and what friends you have available. Maybe you know a man with a van or a removals firm. Maybe you are a fit and healthy person who doesn't mind humping all your belongings about.
If you plan to move frequently anyway renting might make sense but even so I might be tempted to buy something and rent that out myself so if the worst happens I have a fall back plan.
If you known about a health condition that might limit your life expectancy then I might consider it.
Yes but the OP was asking about the financial aspects and I was trying to bring the discussion back to that.
Dod
Whilst I didn't quote figures in my observations, they do have financial implications but the lack of information precludes detailed costs. Additionally how important the various observations, will play a bearing on the costs. The more important something is to you the more you are willing to pay extra!
If your landlord gives you notice, you will have to spend time planning another move, pay costs etc. We dont know the area or the rental market or if he owns a van or needs a full removal service. Removals can cost thousands! how mush is his time worth?
Does it need to be a limited area or willing to travel. What are the extra costs in this? Another car for the family? What are the costs associated with his priorities. Maybe he likes a really nice garden but the rented house needs money spending on it to get it up to his standard. The landlord is unlikely to pay so will it require him to do the outlay? Of course this could be any important element.
What happens if the landlord give notice after just six months again. Will furniture fit or will that be time for a new sofa etc
So whilst there is no defined costs involved it is quite open. He might get a long term rental or not be bothered about anything in particular which could reduce overall costs.
I suspect that the longer the term the more it swing in favour of buying. Again not an issue if your a chain smoking, 8 pints a night, do no exercise type sickie type person with other health implications. There are costs to owning a property too and these can be substantial. New kitchen?
There are also tax benefits in having a main residence. Basically is a question of will investments do better than property and a what if statement.
What if one doesn't perform as well as the other. A house and less money or no house and less money. Albeit the less money in the second scenario will be bigger than the first, or you hope it would. I suppose you could buy a cheaper house if the investments were poor compared to the investments over time if you decide to jump before its all gone.
Property tends to be more stable than investments and often has an element of gearing. Although not in this case as no mortgage being proposed. He could look at diversity. Buying with a mortgage (if he can still get one) and paying the currently low interest with the investments. (Best of both worlds?) inflation will also effectively reduce the mortgage over time and aid some investments income. What about x3 BTL properties?
Its such an open ended question that hinges so much on the OP and what is important to him. Looking after shares plus buying and selling is much easier than doing the same with houses. You cant part sell a house either if you need some cash!
One final point, Covid has just shown what can happen in the investment world, share prices dropped substantially and dividends were cut or stopped completely. All this in a very short space of time. Yes things are improving now but how would the OP cope through that type of event next time. Is there some other fall back income?