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is buying really cheaper than renting?
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Join Date:Posts: 30620
That was my point though. Your post was telling people not to get obsessed with owning a home but if you didn't own that home you wouldn't be able to afford to move to another country.
If I didn't own- I'd find renting cheaper in Portugal, than I would here- and I have skills which are easily transferable to pretty much any other country (I'm a database programmer). If I stay here- my contributory old age pension- is pretty much identical to the net pay a teacher in Portugal is entitled to- and is below the tax threshold for Portugal (I've paid tax there before).
Owning property in Ireland- is moot- indeed, family ties are pretty much the only reason to stay here as I have young children. If I was renting- I'd be in the same position.
As to my home in Dublin- despite when I purchased- its still well within negative equity- even all these years later (I had to top up the mortgage significantly when my wife had a serious cancer diagnosis and I've had significant periods off work myself with hospitalisation and repeated surgery).
Owning a property in Dublin- is a noose around my neck- however, the deciding factor for not simply leaving- is the fact that I have young children who have cousins here- who I'd like them to have contact with.
I'm playing a balancing act- however, everything else being equal (and its not)- I'd be out of here like a shot.0 -
The_Conductor wrote:If I didn't own- I'd find renting cheaper in Portugal, than I would here- and I have skills which are easily transferable to pretty much any other country (I'm a database programmer). If I stay here- my contributory old age pension- is pretty much identical to the net pay a teacher in Portugal is entitled to- and is below the tax threshold for Portugal (I've paid tax there before).
Okay makes more sense now. Where I'm coming from though I suppose is in a properly functioning country I would hope pensioners who didn't own a home because they couldn't afford one or had lost one would have social housing.
Because for me it's a huge struggle to hold on to mine and I often wonder if it's worth it.0 -
Just want to say I'm following this thread with great interest - hearing different people's personal experiences with the positives and negatives of buying vs renting brings up important questions both practical and philosophical so I appreciate the sharing you all are doing.0
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The_Conductor wrote: »You and me both.
I will be selling my PPR in Dublin- in due course- and simply signing over other property to my kids- and making damn sure I can live off the COAP- and I do speak Portuguese- which is partially where I was coming from with my earlier post.
I'm a little bit confused here - you're eschewing the merits of property ownership over rental, yet you intend to fund your portugese retirement by selling the house you own and then signing over the rest of your property to your kids so that they needn't buy their own??
How the hell do you reconcile what you're saying, with what you're actually doing?
(I've a half baked plan to do the same myself, but i've a sneaky feeling grandkids will probably scupper it come retirement age!)0 -
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sbsquarepants wrote: »I'm a little bit confused here - you're eschewing the merits of property ownership over rental, yet you intend to fund your portugese retirement by selling the house you own and then signing over the rest of your property to your kids so that they needn't buy their own??
How the hell do you reconcile what you're saying, with what you're actually doing?
(I've a half baked plan to do the same myself, but i've a sneaky feeling grandkids will probably scupper it come retirement age!)
My kids are only 6 and 7- I've drummed it into them that when they grow up- Mommy and Daddy will be living in another country- but they and their children will be welcome to visit at any time for as long as they choose.
Hopefully I have grandkids too- same as you- but one way or the other- I am getting out of here.
As for my current abode- I bought it as somewhere to live in. It currently has a negative value associated with it (and some issues- such as the 2.2k annual management charge which I paid last week)- however, in time it be an asset. I'm not relying on it, one way or another- and quite simply- will divest of it when it suits (obviously not while my kids are still in school etc).
I may have a cash lumpsum when I sell my PPR- perhaps I won't, one way or another- I didn't buy it as an investment- I bought it as somewhere to live in- and at the time never intended to bring children up in it (without a garden and limited privacy etc).
I will be leaving Ireland- come what may- grandchildren nothwithstanding- sure, I'll travel back and forth regularly- but I'm going to base myself abroad- when the opportunity arises.
Honestly- I'm tired of this country- I've been through a lot, I don't feel I owe anyone anything- least of all the Irish exchequer- I've more than paid for any pension rights I may draw down when I eventually retire.0 -
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I couldn't see myself handing over enough for 2 mortgages, never mind one to a landlord each month. It's disgusting.0
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That seems like a lot for a young child to deal with.The_Conductor wrote: »My kids are only 6 and 7- I've drummed it into them that when they grow up- Mommy and Daddy will be living in another country- but they and their children will be welcome to visit at any time for as long as they choose.0 -
The_Conductor wrote: »Honestly- I'm tired of this country- I've been through a lot, I don't feel I owe anyone anything- least of all the Irish exchequer- I've more than paid for any pension rights I may draw down when I eventually retire.
Each to their own choices but far off fields can be green (or brown in this case). I know people who've retired to Spain and seem to spend their time hankering back over what's happening at home. Then the question of patriotism arises too?0 -
The_Conductor wrote: »- but one way or the other- I am getting out of here.
I thought of this when I read that line.;)
I'm thinking along the exact same lines. I hope you make it.0 -
Being a landlord is a fools game in Ireland- its a whole lot of work and misery for very little return- the main beneficiary of renting in Ireland- is not the tenant, and is most certainly not the landlord- its the Revenue Commissioners- the galling thing is that the largest landlords in Ireland are allowed to operate without paying tax at all- the REITS in particular come to mind. The whole taxation of rental income needs to be reformed- the manner in which it is treated as 'unearned income' while simultaneously there is allowance for different classes of landlords- is inequitable- and divisive. My own personal preference is for a new model for dealing with income from residential lettings- whereby there would be a flatline deduction from gross rent due to the Revenue Commissioners- in an identical manner- from *all* landlords (set it at 25% or whatever percentage you like)- and ideally- I'd like to see this ploughed back in social housing, nursing home places and LPT deductions for everyone.
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 nonsense0 -
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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.0 -
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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 )0 -
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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.0 -
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.0
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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 position0 -
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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.0 -
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 .0 -
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 )0 -
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.0 -
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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.0 -
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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.0 -
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 here0 -
Join Date:Posts: 30620
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...........0 -
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!!!!!0 -
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 ridiculousA 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 streetDebt 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.0 -
Right2Write 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.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.0 -
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 reasons0 -
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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.0 -
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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 )0
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