is buying really cheaper than renting?

The_Conductor

BoatMad wrote: »

Comparing this to corporate structures is nonsense

The issue arises because the largest landlords are not only using- they are abusing corporate structures- such as registering as charities- to avoid paying tax on their rental income.

My argument is that rental income should be treated as a business both by the landlords and by the Revenue Commissioners- if this means having landlords hive off property portfolios (or even their sole property) into some sort of a holding structure- do it- however, there has to be a cognisance on the part of Revenue Commissioners that rental income comes from running a business as opposed to labelling it as 'unearned income'- which also means a landlord cannot enumerate any personal time or expense he/she puts into their 'business'- unlike any other business operator.......... It is an inequity- and has been accepted as such by the Revenue Commissioners- however, they've done nothing whatsoever about it.

My suggestion was a manner of levying a fair tax on all residential rental income- such that a reasonable tax on the sector was bourne in a reasonable manner by those generating cashflow in the sector- which is not the case at present.

The_Conductor

Colking wrote: »

I thought of this when I read that line.;)

I'm thinking along the exact same lines. I hope you make it.

Likewise.

Life is short- you only appreciate just how short- when you have to encounter events that you really wish you never have to.

I hope you escape too.

BoatMad

The_Conductor wrote: »

The issue arises because the largest landlords are not only using- they are abusing corporate structures- such as registering as charities- to avoid paying tax on their rental income.

My argument is that rental income should be treated as a business both by the landlords and by the Revenue Commissioners- if this means having landlords hive off property portfolios (or even their sole property) into some sort of a holding structure- do it- however, there has to be a cognisance on the part of Revenue Commissioners that rental income comes from running a business as opposed to labelling it as 'unearned income'- which also means a landlord cannot enumerate any personal time or expense he/she puts into their 'business'- unlike any other business operator.......... It is an inequity- and has been accepted as such by the Revenue Commissioners- however, they've done nothing whatsoever about it.

My suggestion was a manner of levying a fair tax on all residential rental income- such that a reasonable tax on the sector was bourne in a reasonable manner by those generating cashflow in the sector- which is not the case at present.

Leaving aside the issue of corporate structures abusing situations.

1. you can be self employed , your income from that activity is set off against legitimate business expenses and the reminder is taxed at personal income tax

2. You wrap it up in a corporate structure, and you pay tax at corporate levels, HOWEVER any personal income paid to you
is taxed at full PAYE levels , generally for a small business person , a corporate structure is LESS efficient ( as you pay both personal and corporate tax , and you have increased reporting costs etc )

thats all that needs to be done. treating rental income another way is a distortion , especially your claims to be given a preferential rate

Note that by and large , Option 1, is the way Revenue treat " amateur " landlords not wrapped up in a corporate structure , Are you suggesting that rental income should be at lower tax rates then say PAYE ? ( or other self employed incomes )

The_Conductor

BoatMad wrote: »

especially your claims to be given a preferential rate

I suggested a flatrate 25% of all gross rental income- and absolutely no allowances whatsoever- most people wouldn't consider that 'preferential'- as all costs would have to come out of the remaining 75%....... Even at the moment- I'd be quite surprised if the average landlord is paying at this rate. It would make doing your tax return a doddle- and it would be very easily verifiable via the RTB rent declarations.

The system at the moment- encourages widespread avoidance measures- some legitimate- others not- by both individuals, companies, REITs etc etc. I attended a seminar in Revenue on it not so long ago.

I suggested a flatrate deduction on the gross rental income- to counter the myriad of schemes out there for sheltering income.

I don't think a landlord should be better off than any other taxpayer- but I don't think any landlord should be- and at the moment- we have large and growing segments of the industry who are opting out from paying tax- obviously taking some sort of a leaf out of Apple's book.

I also don't think holding up a PAYE employee and saying a landlord can't be treated in a different manner- is a fair or reasonable comparator- PAYE employees don't tie up hundreds of thousands or even millions of Euro- in an asset.

As it stands- the best thing a landlord could do is sell-up- and buy prize bonds- its safer, and even with the recent lower prize ceilings- their return would be better (and tax free). Or buy some forestry unit funds (also tax free). Or just go out and buy shares in Volkswagen (pick a share of your choice which has received a battering recently).

A landlord is deploying an asset for the purpose of generating a return. However- they also have to invest time, effort, skill and knowledge- into the equation. They get zero cognisance of anything- other than the asset itself- and even then- they do get taxed as a PAYE worker does- but just a tad more harshly (paying USC on the gross rather than the net, PRSI etc).

It is in the interests of all taxpayers in Ireland- that avoidance and evasion be closed down- and the REITs etc- properly brought into the tax bracket- and I'd argue all income generated from this- ploughed back into social housing etc.

keane2097

I think the argument that falls out of this part of the discussion is that Revenue ought to clamp down on the slimy practices of the large landlords.

BoatMad

The_Conductor wrote: »

I suggested a flatrate 25% of all gross rental income- and absolutely no allowances whatsoever- most people wouldn't consider that 'preferential'- as all costs would have to come out of the remaining 75%....... Even at the moment- I'd be quite surprised if the average landlord is paying at this rate. It would make doing your tax return a doddle- and it would be very easily verifiable via the RTB rent declarations.

The system at the moment- encourages widespread avoidance measures- some legitimate- others not- by both individuals, companies, REITs etc etc. I attended a seminar in Revenue on it not so long ago.

I see no merit in your "flat tax " approach , and its manifestly unfair to other self employed workers

the current regulations for, in effect," self employed landlords " are consistent with self employed income and should be rigorously enforced by Revenue

The problem with certain corporate structures should be investigated and closed , BUT , the existence of such issues, is NOT a reason to give you any better tax position

The_Conductor

BoatMad wrote: »

I see no merit in your "flat tax " approach , and its manifestly unfair to other self employed workers

the current regulations for, in effect," self employed landlords " are consistent with self employed income and should be rigorously enforced by Revenue

The problem with certain corporate structures should be investigated and closed , BUT , the existence of such issues, is NOT a reason to give you any better tax position

I honestly don't think I'm describing giving a better tax position to anyone- particularly as the massive distortion- the tax treatment of debt- would be done away with in one foul swoop (yep- I wouldn't allow mortgage interest deduction- or any deductions whatsoever).

You'd have most landlords up in arms- if you told them you were proposing to nuke their favourite manner of sheltering income.

It would also mean there would be no benefit to loading up debt on property- and indeed, if people were prudently paying down any debt associated with property- they would receive the benefit of their prudence.

At the moment- the whole load as much debt as possible on rental property- to shelter your income from tax, lark- is appalling- and the bad loans associated with it in the banking sector- have never been cleansed.

My flatrate tax on gross rental income- is on the total rental income- absolutely no deductions- so no interest deductions, no mortgage deductions- no deductions period.

BoatMad

The_Conductor wrote: »

I honestly don't think I'm describing giving a better tax position to anyone- particularly as the massive distortion- the tax treatment of debt- would be done away with in one foul swoop (yep- I wouldn't allow mortgage interest deduction- or any deductions whatsoever).

You'd have most landlords up in arms- if you told them you were proposing to nuke their favourite manner of sheltering income.

It would also mean there would be no benefit to loading up debt on property- and indeed, if people were prudently paying down any debt associated with property- they would receive the benefit of their prudence.

At the moment- the whole load as much debt as possible on rental property- to shelter your income from tax, lark- is appalling- and the bad loans associated with it in the banking sector- have never been cleansed.

My flatrate tax on gross rental income- is on the total rental income- absolutely no deductions- so no interest deductions, no mortgage deductions- no deductions period.

I see no reason why rental a property should be treated any differently to any other self employed business ,

I dont see how you can " shelter " income , the interest is clearly a legitimate cost of doing business , just as in corporates can write off all interest against tax , I see no reason why landlords cant do the same , normally capital gains tax should be applied to disposals where a gain then occurs ( and it is )

the rules for rental income are essentially the same as for other self employed ( with a few anti avoidance measures ) , thats right and proper

finally why should a landlord ( a self employed person ) , get a different tax deal to all other forms of self-employed.

your proposal has no benefit for landlords and could severely disadvantage some .

BoatMad

It would also mean there would be no benefit to loading up debt on property- and indeed, if people were prudently paying down any debt associated with property- they would receive the benefit of their prudence.

that argument is irrelevant, debt is a method of financing a business, it has nothing to so with the issues you raise nor , applicable to the idea of a flat tax. In many cases its never prudent to pay down debt its merely a cost of doing business ( see for example invoice discounting )

Samuel T. Cogley

BoatMad wrote: »

Nonsense . rent should be treated liked any other form of self employed income, you should be allowed to deduct direct operating expenses and direct costs , including interest if any. The resultant net income, is then taxed at your conventional personal income tax levels .

Comparing this to corporate structures is nonsense

I'll start taking that line the very second central government and the vocal minority start treating it as 'any other form of self employed income' and stop insisting it's a vital service I should be delighted to provide, for some odd reason.

AKAIK and I'm happy to be corrected the self employed can avail of relief on business debt?

I'm also not sure the last time sparkies were told they could only charge 4% more than they did last year as prices for recessed lighting was getting out of control.

BoatMad

Samuel T. Cogley wrote: »

I'll start taking that line the very second central government and the vocal minority start treating it as 'any other form of self employed income' and stop insisting it's a vital service I should be delighted to provide, for some odd reason.

AKAIK and I'm happy to be corrected the self employed can avail of relief on business debt?

I'm also not sure the last time sparkies were told they could only charge 4% more than they did last year as prices for recessed lighting was getting out of control.

Im not sure of your point here. The provision of private rented accommodation is purely a business, nothing else

self employed can offset interest occurred in the provision of the business ( in general there are restrictions )

rent control is a function of a perceived national emergency , I personally think its a bad idea and ineffectual to boot, but many many areas of self employment ( and business ) exist in price controlled or regulated market.

The_Conductor

BoatMad wrote: »

that argument is irrelevant, debt is a method of financing a business, it has nothing to so with the issues you raise nor , applicable to the idea of a flat tax

It is all interlinked.
We've hived off large sections of our national assets- to companies who financed the whole hog with debt- so as to minimise their tax exposure.

So- for example- we sold the National Lottery to the Ontario Teacher's Pension fund- who bought it into a holding company- which they lent the money to @ 12% interest- so the Irish holding company would never make a taxable profit in Ireland........ The REITs are structured in a similar manner.

This whole debt as a tax deductible- is a massive anomaly- that economists have been discussing with increased intensity over the last 2-3 years. The Economist Magazine regularly has articles on it-

Ending the debt addiction: A senseless subsidy
Buttonwood: What if Interest expenses were no longer tax deductible
Taxfree debt: The great distortion
Taxjustice: Why its time to stop making debt tax deductible

I can also show you a myriad of links from the LSE, Harvard and other journals- all drumming the same song...........

As for treating property in a different manner to any other business- to be brutally honest- I would abolish debt as a tax deductible across the board- for absolutely everyone- I wouldn't discriminate in favour of any sector.

BoatMad

The_Conductor wrote: »

It is all interlinked.
We've hived off large sections of our national assets- to companies who financed the whole hog with debt- so as to minimise their tax exposure.

So- for example- we sold the National Lottery to the Ontario Teacher's Pension fund- who bought it into a holding company- which they lent the money to @ 12% interest- so the Irish holding company would never make a taxable profit in Ireland........ The REITs are structured in a similar manner.

This whole debt as a tax deductible- is a massive anomaly- that economists have been discussing with increased intensity over the last 2-3 years. The Economist Magazine regularly has articles on it-

Ending the debt addiction: A senseless subsidy
Buttonwood: What if Interest expenses were no longer tax deductible
Taxfree debt: The great distortion
Taxjustice: Why its time to stop making debt tax deductible

I can also show you a myriad of links from the LSE, Harvard and other journals- all drumming the same song...........

in a fiat currency , there is little overall systemic value in debt reduction, the monetary system requires debt , because in essence the " creation " of money is free( for all intents money availability is unlimited ) and its the " selling" of interest that allows the financial business to exist.


The issues you mention are a global one,and have very little relevant to the Irish landlord ( or his or her tenants ),Irelands corporate tax position and its merits or otherwise are a whole bigger and different conversation then the one here

The_Conductor

BoatMad wrote: »

The issues you mention are a global one,and have very little relevant to the Irish landlord ( or his or her tenants ),Irelands corporate tax position and its merits or otherwise are a whole bigger and different conversation then the one here

They most certainly do- because they encourage landlords (and other business owners) to load up on debt- because the taxpayer covers the cost of the debt. That's the whole concept- why pay down your debts- when you'll end up having to pay more tax as punishment for doing so. This is why we have so many tenants getting evicted by lending institutions- because their landlords, criminally or otherwise- loaded up on debt and then gave up on paying their debts.

A private person doesn't get an incentive to take on debt- so why should a company/business/corporate? The whole talk of a 'fiat currency' means zilch- when Paddy and Joe walking down the street- are the people on whom the currency rests- its not backed by gold or any other commodity- its an exercise in faith, if I take 1 currency unit from Billy- in exchange for 2 pints of milk- I can exchange my 1 currency with Martha for a bag of carrots.

Debt has a cost- and that cost is bourne by the average person walking down the street who pays higher taxes to offset the tax avoided by individuals/companies/businesses- who load up on debt- because, sure it'll cut down their tax bill...........

KenjiOdo

johnnyskeleton wrote: »

I see that BOI's rates are 4.5% on the variable >80%, which is quite high. They lure people in with their 2% cash back scheme.

In any event, if you wanna know what the amounts of principle and interest you will pay on a 25 year variable rate of 4.5% on €162,000, which has a monthly repayment of €900.45, and assuming no overpayments/missed payments/changes in variable rate, it would be:

YEAR INTEREST PRINCIPLE END OF YEAR BALANCE
2017 €7,216.58 €3,588.80 €158,411.20
2018 €7,051.71 €3,753.67 €154,657.53
2019 €6,879.27 €3,926.11 €150,731.41
2020 €6,698.90 €4,106.48 €146,624.93
2021 €6,510.25 €4,295.13 €142,329.80
2022 €6,312.94 €4,492.45 €137,837.36

That is to say, at the end of 5 years if you just pay the mortgage as normal, you will have paid off €20,000 in principle.

As other posters have said, there are higher expenses with home ownership - life insurance, mortgage protection, management fees, property tax, buildings insurance, mainteance and repairs, furniture etc. I would allow €2,000 per year on these. Another factor, although not an expense, is the loss of interest/return on your deposit of €18,000.

There are also stamp duty, legal fees, surveys etc which I would say will cost €4-5,000

So after 5 years the €20,000 less approx €14-5k additional expenses, is the net benefit of buying over renting in your scenario i.e. €5-6k better off. If you sold after 5 years you would have further legal expenses and estate agent expenses, so say €3-4k.

However, the big factor here is whether the property will go up, down or stay the same in value. If it goes down by more than €3-4k, you will have made a loss by buying over renting. If it goes down by €3-4k then you will have more or less broke even. If it goes down by less than €3-4k or stays the same or goes up, you will have made a gain on the purchase over renting.

So the above are just rough calculations, obviously it would be best if you do your own homework on it and make reasonable assumptions re: different values. The repaying early will obviously reduce interest payments per year and will probably be better than what you will get on deposit interest.

I would suggest you work it all out and make an educated guess, but the largest variable is what the market will do in your specific area.

Even if they lost €5K after selling 5 yrs later it equates to €1K pa to have a roof over your head, just over a months rent in their current situation PER YEAR!!!!!

BoatMad

The_Conductor wrote: »

They most certainly do- because they encourage landlords (and other business owners) to load up on debt- because the taxpayer covers the cost of the debt. That's the whole concept- why pay down your debts- when you'll end up having to pay more tax as punishment for doing so. This is why we have so many tenants getting evicted by lending institutions- because their landlords, criminally or otherwise- loaded up on debt and then gave up on paying their debts.

A private person doesn't get an incentive to take on debt- so why should a company/business/corporate? The whole talk of a 'fiat currency' means zilch- when Paddy and Joe walking down the street- are the people on whom the currency rests- its not backed by gold or any other commodity- its an exercise in faith, if I take 1 currency unit from Billy- in exchange for 2 pints of milk- I can exchange my 1 currency with Martha for a bag of carrots.

Debt has a cost- and that cost is bourne by the average person walking down the street who pays higher taxes to offset the tax avoided by individuals/companies/businesses- who load up on debt- because, sure it'll cut down their tax bill...........

your view is entirely one-sided. Businesses in general take on debt , so as to be in business in the first place, this could be the lease on the premises , leasing equipment, etc etc etc.

This is done for two reasons, (a) because no other source of capital may exist and ( b) the point of a business is not to " own " assets , its to make a return on capital employed , i.e. to turn a euro invested into 1.20 etc .

Hence debt is just a means to an end .

The argument about tax deductible debt, in itself is just nonsense, because you have to consider all aspects of business and personal taxation , just focusing on this is ridiculous

A private person doesn't get an incentive to take on debt- so why should a company/business/corporate?

Leaving aside that until around 1979 , they could reclaim interest , private people are NOT in business, they do not invest capital to then make a return on that capital, they simply sell their labour , they take on debt typically in the pursuit of personal happiness ( i.e. shelter , white goods etc )

The whole talk of a 'fiat currency' means zilch- when Paddy and Joe walking down the street- are the people on whom the currency rests- its not backed by gold or any other commodity- its an exercise in faith, if I take 1 currency unit from Billy- in exchange for 2 pints of milk- I can exchange my 1 currency with Martha for a bag of carrots.

The currency rests on a whole host of factors , only one of which is Paddy and Joe, but largely it rests at a much " higher " level then the man in the street

Debt has a cost- and that cost is bourne by the average person walking down the street who pays higher taxes to offset the tax avoided by individuals/companies/businesses- who load up on debt- because, sure it'll cut down their tax bill

Debt is clearly a cost of doing business, in most jurisdictions business may offset some or all of the costs of doing business , before computing tax. Why pick on debt , why not remove the cost of goods purchased from corporate tax computation , the whole thing is arbitrarily anyway.

professore

Right2Write wrote: »

regi3457 wrote: »

We live in a house and were just having a look around at potentially buying a house in Ireland. We were more window shopping than anything and looking at numbers to see just how much cheaper buying is supposed to be.

I must add that in our case we would have the means to save up the full 180k in 5 years so we could cancel our mortgage early hypothetically speaking but in the interim from now until 2022, would it be wiser to keep renting or to buy a house? It seems to me that we would have the full 180k sooner if we carried on renting but maybe I am missing something. Anyone care to tell me what I am missing? I suppose property goes up over time but not always so surely speculating about this is not the way to go.

My instinct is that you're right to be cautious, particularly if you're well paid enough and can save at a healthy rate as well as paying the current rent. There's always people pumping up the pressure to buy in Ireland (often for some unspoken self interest) but it makes sense I think to buy when a) you find the place you will happy living in and b) you can pay as much as possible from savings. People talk about buying a house as an asset but first and foremost it should be a home. I'm a bit out of touch with current mortgage arrangements but it certainly used to be the case that there are penalties for people who want to pay off their mortgages more quickly. Which is why it makes sense to put as much savings as possible towards the purchase in the first place. It may also depend on where you live and pressure on prices there - is the demand small or large. This affects the rate at which prices may change and influence your decision.

Skerries wrote: »

you are left with a valuable asset
so a person in their 60's would be rent free (apart from usual home expenses) and have a nest egg in case they need to use something like fair deal

That's another question isn't it? You save for this asset and then later in your years, having saved for it the state then leverage a proportion of it's value. Whereas people who don't provide for themselves this way just get the same service but the taxpayer stumps up!!

Exactly. The fair deal scheme is a good reason NOT to get a mortgage. Blow everything after retirement while you are still healthy and then live a subsistence existence in old age - as that's all you are able for anyway.

BoatMad

KenjiOdo wrote: »

Even if they lost €5K after selling 5 yrs later it equates to €1K pa to have a roof over your head, just over a months rent in their current situation PER YEAR!!!!!

huh, over 5 years they have paid 40K in interest , averaged out , thats 8K a year,

If they sell for that they paid ( i.e. the capital applications covers all the buying , selling and maintenance expenses) , then that is equivalent to a rent of 660 a month

( Im not sure what sort of property you'd get for 162K these days, and what the rent would be )

If they have any reduction in capital , this in effect causes the equivalent months rent to increase , quite dramatically ( for example , a 5 K decrease in net capital , would add 440 to the " annual rent ")

lets face it most people buy , for the aspects of security of tenure , not because of the financial reasons

The_Conductor

BoatMad wrote: »

lets face it most people buy , for the aspects of security of tenure , not because of the financial reasons

I agree with you on this point- however, in an Irish context- there is a mania- a presumption that owning a property is some sort of a sacred cow that can be milked at will for all its worth......... A lot of this mania has drowned by the bust- however, and unfortunately- its making a resurgence in a new generation who seem to be hell bent on playing it for everything its worth........

With respect of your earlier point- its easier to say we're not on the same page and aren't going to agree, and leave it at that.

BoatMad

I agree with you on this point- however, in an Irish context- there is a mania- a presumption that owning a property is some sort of a sacred cow that can be milked at will for all its worth......... A lot of this mania has drowned by the bust- however, and unfortunately- its making a resurgence in a new generation who seem to be hell bent on playing it for everything its worth........

Given for example , That Dublins homeownership is well below European medians ( 70%) and even below German ones, I fail to see how you can classify the desire to own a home as a " mania"

Nor was any " mania " drowned in the Bust. Very few people actually lost money ( i.e. only those that were in-effect forcibly removed, and that was very small . IN fact most people that found themselves in negative equity often had extracted equity and bought other assets , so the underlying house was in fact in positive equity ( I leave out buy to let as that is a business and thats different )

Since the previous house price collapse, was primarily not due to a fall in houses prices per se, or any falling off in demand, but rather due to a credit crunch of extraordinary proportions, I see no reason to be worried about " new generations " and the demand for houses. A worldwide banking collapse as what happened will not happen again in the mode that occurred ( it could of course happen for other reasons ), but the fiat currency system proved remarkably resilient and the system was corrected very quickly ( even if the ECB had to be bet to the table )

KenjiOdo

BoatMad wrote: »

huh, over 5 years they have paid 40K in interest , averaged out , thats 8K a year,

If they sell for that they paid ( i.e. the capital applications covers all the buying , selling and maintenance expenses) , then that is equivalent to a rent of 660 a month

( Im not sure what sort of property you'd get for 162K these days, and what the rent would be )

If they have any reduction in capital , this in effect causes the equivalent months rent to increase , quite dramatically ( for example , a 5 K decrease in net capital , would add 440 to the " annual rent ")

"lets face it most people buy , for the aspects of security of tenure , not because of the financial reasons

"However, the big factor here is whether the property will go up, down or stay the same in value. If it goes down by more than €3-4k, you will have made a loss by buying over renting. If it goes down by €3-4k then you will have more or less broke even. If it goes down by less than €3-4k or stays the same or goes up, you will have made a gain on the purchase over renting."

I misread that completely. After 5 yrs 53200 rent paid vs w/e repayment etc were. So if resold after 5yrs @€;177K
It'd have cost them five years rent, i.e. 53200 in repayments according to the workings of other poster

Spanish Eyes

Bottom line for me is to enjoy my retirement + pension mortgage free and no rent to pay into my dotage.

Surely that is going to be a big issue going forward if many people rent and do not own at retirement?

Will these people be housed at taxpayer's expense on retirement if they are only getting 12k a year State Pension for example. No way they could afford renting on that income.

Another timebomb maybe.

jamesthepeach

Spanish Eyes wrote: »

Bottom line for me is to enjoy my retirement + pension mortgage free and no rent to pay into my dotage.

Surely that is going to be a big issue going forward if many people rent and do not own at retirement?

Will these people be housed at taxpayer's expense on retirement if they are only getting 12k a year State Pension for example. No way they could afford renting on that income.

Another timebomb maybe.

Where rent is going to come from in old age is definitely something that plays on my mind.

I think the way it's going now is that the tax payer is expected to house anyone who wants to live in their desired area.
So you can add the hall on to the state pension to get an idea of what pensions will cost for those who don't own their houses.
The more I think about it the more I think owning is a mugs game.

regi3457

The_Conductor wrote: »

And you have the REITs stuctured to pay little/no tax whatsoever- versus an Irish landlord who is taxed on rental income as 'unearned income' and crucified over it.

Buying can be cheaper than renting- but a lot of people look at this with the most incredible of rose tinted lenses. You have entire generations condemned to living in inappropriate accommodation- because they had to buy a 'starter home' at any cost to 'get on the property ladder'. Many of these were encouraged to do so by politicians- and indeed, some of the 'experts' who were habitually held up as people who could be trusted to save people money had not the most altruistic of intentions (with a few exceptions- I've a small article on Tom O'Higgins from 2000 framed on my wall- which I look at whenever I feel I need a boot in the gonads).

People just don't understand the undercurrent in the Irish psyche- to own property at any cost- regardless of suitability- and that term 'rent is dead money' seems to be hammered into people at a very young age.

Rent is *not* dead money- its paying for a service- and even today- in our ridiculous rental market- it will cost you significantly less to rent a comparable property than to buy it- in most but not all cases (you have to factor improbably low interest rates into the equation to make buying stack up- and thats certainly not going to last).

Guys- life is short- and is for living. Tying yourself in knots- just to own property- for 35-40 years- is nutty. I know where I probably will be in 40 years time- under 6 feet of stony cold clay- but in 20 years time- I'd like to be enjoying a mug of coffee, watching the sun rise over the Atlantic- before I started my morning walk on the silver sands of a Portuguese village beach- somewhere north of Lisbon, and I don't intend to own any property whatsoever. Next time there is a downturn of any significance- I'll sign over all my worldly goods to my kids- with a lifetime right of residence for myself- to minimise inheritance tax, cgt etc etc.

this is funny, you say life is short yet you are prepared to wait until your retirement to hit the portuguese beach. Why wait that long? If life is short.

The_Conductor

regi3457 wrote: »

this is funny, you say life is short yet you are prepared to wait until your retirement to hit the portuguese beach. Why wait that long? If life is short.

Young kids who I want the best for- if they were younger, I'd probably have gone already- however, severe ill health forced a stay on things.

regi3457

The_Conductor wrote: »

Young kids who I want the best for- if they were younger, I'd probably have gone already- however, severe ill health forced a stay on things.

I understand. You obviously have your reasons but a lot of people do wait until retirement or at least feel that they have to wait until retirement to start enjoying life. This is some kind of weird social convention that i never understood. Maybe it is the fear of integrating into another society without enough money.

jester77

The_Conductor wrote: »

Young kids who I want the best for- if they were younger, I'd probably have gone already- however, severe ill health forced a stay on things.

I would be the same. I only fixed my mortgage for 20 years, as by that time I will be close to retirement, the kids will be moving out and I will most likely sell up and rent somewhere else. Probably somewhere like Tuscany or near the Mediterranean.

pilly

regi3457 wrote:

I understand. You obviously have your reasons but a lot of people do wait until retirement or at least feel that they have to wait until retirement to start enjoying life. This is some kind of weird social convention that i never understood. Maybe it is the fear of integrating into another society without enough money.

For me it's my inability to learn languages that would hold me back. That part of my brain just doesn't work!

pilly

The_Conductor wrote:

Young kids who I want the best for- if they were younger, I'd probably have gone already- however, severe ill health forced a stay on things.

So Ireland does have something to offer then?

jamesthepeach

Last night I started to try to convince my wife that we both should sell everything and just retire abroad.
We are in our late 40s and have been both contributing to pensions since the age of 18.
If we sell everything we should have a nice little nest egg.
She just said "let's do it for the year next year and see how we like it". I was in shock.
Now I'm dreaming of a year in a nice warm country sipping wine with no alarm clock.
RENTING of course.
Yippee.

regi3457

pilly wrote: »

For me it's my inability to learn languages that would hold me back. That part of my brain just doesn't work!

yes it is important but in one year you would be ok if you make an effort, I did that in Argentina when I moved there in 2007, loved it. Anyway those are great experiences that should be embraced not feared and should not stand as barriers if you want to live elsewhere

regi3457

jamesthepeach wrote: »

Last night I started to try to convince my wife that we both should sell everything and just retire abroad.
We are in our late 40s and have been both contributing to pensions since the age of 18.
If we sell everything we should have a nice little nest egg.
She just said "let's do it for the year next year and see how we like it". I was in shock.
Now I'm dreaming of a year in a nice warm country sipping wine with no alarm clock.
RENTING of course.
Yippee.

would you have to rent? property cheap in spain/portugal?

I say do it!

jamesthepeach

regi3457 wrote: »

would you have to rent? property cheap in spain/portugal?

I say do it!

Definitely going to give it a go.
I'm sick of either commuting or having to rent somewhere close to work and the tax man taking so much of it.
Time to liquidate and enjoy ourselves.
Now to convince her I was just dreaming

Rent is very cheap in Spain and Portugal outside July and august. I think renting for a year to start anyway is the way to go.
Probably if we did it permanently we would still rent.
Target in my head now is within a month after Christmas

The_Conductor

jamesthepeach wrote: »

Definitely going to give it a go.
I'm sick of either commuting or having to rent somewhere close to work and the tax man taking so much of it.
Time to liquidate and enjoy ourselves.
Now to convince her I was just dreaming

Rent is very cheap in Spain and Portugal outside July and august. I think renting for a year to start anyway is the way to go.
Probably if we did it permanently we would still rent.
Target in my head now is within a month after Christmas

Start a blog- or even your own thread here- and let us all follow your journey.
I'm signed up to estate agents around Ferel, Serra-del-rey, Obidos, Peniche, Caldais de Rainha- at the moment- and get a steady trickle of properties to have a look at online. I've flights booked for a family trip over at Halloween- and will look at one or two more promising prospects then.

jamesthepeach

The_Conductor wrote: »

Start a blog- or even your own thread here- and let us all follow your journey.
I'm signed up to estate agents around Ferel, Serra-del-rey, Obidos, Peniche, Caldais de Rainha- at the moment- and get a steady trickle of properties to have a look at online. I've flights booked for a family trip over at Halloween- and will look at one or two more promising prospects then.

We usually go to Lagos or Luz a couple of times a year. Didn't get out this year though because of work. We love the place so it wouldn't be too hard to convince the mrs do it for a year.

At least for a few months anyway. She definitely on board with selling everything and retiring

Samuel T. Cogley

The wife is applying for a job in Tokyo. I've absolutely bugger all idea if the one or two places I've looked to rent are Japanese equivalent of Sheriff Street or not but 58sqm for €1300 is not as bad as I thought.

Hmmm... that would be as that wasn't Tokyo. That's more like €2200 a month

jamesthepeach

Samuel T. Cogley wrote: »

The wife is applying for a job in Tokyo. I've absolutely bugger all idea if the one or two places I've looked to rent are Japanese equivalent of Sheriff Street or not but 58sqm for €1300 is not as bad as I thought.

Hmmm... that would be as that wasn't Tokyo. That's more like €2200 a month

I lived in Tokyo for a year.
Company rented my apparent for me.
You'll find nice places but they are SMALL and expensive.
Best to get the company to find you a place too. Some are right holes. And travelling on the train in rush hour will break a westerner. Avoid if at all possible.

Oh, and have fun with the addresses and street signs . You'll see what I mean when you get there.