is buying really cheaper than renting?

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.