Keeping your home vs Instant Property portfolio.

Don't you mean "instantly"?

OK, so let's say you take a £136k loan on each of these properties. At a typical BTL interest rate 7% they would cost £961 per month to repay over 25 years, or £793 per month interest-only.

How realistic do you think it is, in the current climate, to fund those finance charges, plus insurance and maintenance, from rent? Would *you* (as tenant) think an average house worth £1000 a month?

Yes they do. Where else are you going to fund the loans from?

Things aren't always as simple as they seem.

"Andy Pandy" wrote

Haven't you learnt yet? We've been here before...

The "true" cost of owning (long-term average) is actually only around 2% per year of 'value' (mainly for maintenance, as on average capital gains very closely offset mortgage interest).

Imagine all the extra utility you'd get for that 2% !

I'd say that's very good value - certainly compared to the 5%-6% it would cost to rent the equivalent!

Many times, it's getting boring...

The point is it's a cost, not a profit. Which is why I put "financially" in brackets. There are people who buy a bigger/more expensive house because they think it'll

*make* them money, not because they think 2% (or whatever) is a small price to pay for superior accomodation.

Anyway 2% is too low, that'll probably just cover I&M, you need to account for the extra council tax, heating bills etc that are likely with a bigger/more expensive house.

Yes. But if you want to *invest*, rather than have 3 spare bedrooms that you use once a year, you'll likely be much better off getting a smaller house and using any additional funds to BTL.

"Andy Pandy" wrote

Buying food is also a cost (not a profit) - do you consider it "...stupid (financially)..." to buy any more or better quality food than is absolutely necessary to live?

"Andy Pandy" wrote

What's that got to do with my comment? It should have been clear that I am not one such person, as I suggested it would *cost* 2% !

"Andy Pandy" wrote

A house costing three times as much, won't usually have a three times higher council tax or heating bill.

"Andy Pandy" wrote

Equally: If you want to *invest*, rather than eat more than you need to live (or better quality food), you'll likely be much better off eating the bare minimum and using any additional funds to . So what?

Your financial health isn't the only thing you can invest in. What about your medical health? Buying food that's better for you may cost more, and you could think of the extra cost as being an investment in what you hope will be a longer and healthier life.

It is "stupid (financially)" to buy a 4 course meal and only eat 2 courses of it. Just as it is to buy a 4 bedroom house and only use 2 of the rooms.

I don't just post for your benefit. The OP wanted to discuss property investment strategies.

It will under the new proposed scheme (where council tax will be a percentage of the property value). As for heating etc, why not? A 5 bed detached house will likely have 3 times the heating cost of a 1 bedroom flat at a third of the price.

Won't work, because if you get fat you'll die younger and so will spend less overall.

It doesn't, in general, it costs less. A Mars bar is more expensive than an apple, a cream cake is more expensive than a bread roll, a meal in a restaurant or a takeaway are both likely to be much more calorific than the average meal at home.

"Ronald Raygun" wrote

Andy suggested that spending more than "what you need to" on things, "would be stupid".

It's not, necessarily. Everyone decides for themselves if they think it is worth the cost to make them healthier, happier, or richer. It's up to each person individually -- not for someone to come along and say that, anything but their own view, is "stupid".

"Andy Pandy" wrote

Why would you do that? I'd suggest you decide first how much you want to eat, and order that amount.

"Andy Pandy" wrote

I've never suggested otherwise. But, just because you only *need* 2 rooms, doesn't mean that you couldn't **make use** of all 4 rooms if you had them!

"Andy Pandy" wrote

Ah, I thought you were trying to validate your comment that "...it is stupid...". You should have just said that you couldn't validate it!

"Andy Pandy" wrote

I hadn't heard of that. Whose scheme is it? Will they attempt to update "property values" each year?!

Those poor old pensioners living in their (already paid-for) large houses would be hit the hardest again!

"Andy Pandy" wrote

(1) Please be consistent - if you want to suggest that the extra rooms wouldn't be used (as above), then you shouldn't expect to need to heat them!

(2) In a smaller house, the "living" area (which is utilised the most) would be a greater proportion of the whole than for a larger house. It's only the areas that are used the most that need to be heated the most!

(3) Do you think that a cheaper house would have equivalent insulation as a more expensive one?

"Andy Pandy" wrote

Are you suggesting that you'll get fat if you spend *more*, or if you spend *less*? It's not obvious which way round it would be....

You could take the rest of your meal home and feed the dog. But he'd probably be just as happy with Pedigree Chum. Just because you are using it doesn't mean it's being used sensibly.

Kin hell, you're not really that dense. I made the comment because "There are people who buy a bigger/more expensive house because they think it'll *make* them money". Er, like I wrote above. I was trying to dispell that myth, as some people (not you), perhaps the OP, believe it.

It's being reviewed. There are rumours that's we'll end up with a system like Northern Ireland.

Yup.

What, so you'll have outside door style doors between the hall and rooms so heat doesn't escape, and let the pipes freeze?

Have you heard of central heating?

The cheaper house is more likely to be attached to other properties (eg flat, terrace, semi) and so have less walls to the outside.

If you "eat more than you need" then you'll get fat.

I doubt it.

Not fair comparisons.

Calorificness is hardly a good measure of "not good for you". Also it's not a fair comparison. With a restaurant meal you're paying for the business's overhead and profits, which you aren't when preparing your own meal at home.

To compare like with like you need to compare either ready-prepared (e.g. supermarket) meals made with healthier ingredients with similar meals made with less-healthy ingredients, or you need to make the comparison between ingredients you buy for home preparation of similar meals, i.e. healthy option ingredients against not-so-healthy ones.

Lean mince is apt to be more expensive per pound than fatty mince. Decent bread is apt to be more expensive than factory-grown "foam" bread. And that's before we even get to the organic argument.

Not if there are two of you sharing and you eat two courses each.

Not if you fill the two spare rooms with lodgers and their rent reduces your net houseing costs to less than a 2 bedroom house would have cost.

What proposed new scheme? The one which has no chance of making it?

Hmm. Think of a detached house divided into 3 1-bedroom flats. That house would have three times the value and three times the heating bill as each of its thirds. But if they were knocked into a single dwelling it would have rather more than 5 bedrooms.

Are you suggesting that eating the bare minimum gets you fat?

I beg to differ.

Why? They are all snack foods that you could eat between meals, or perhaps after/before a meal.

Where I work the alternatives outside of lunchtime are basically fruit or cakes. Fruit is much cheaper.

Irrelavent. If you eat out a lot you are spending more on your evening meals. It is also likely to be less healthy (not always).

Porridge vs sugar laden cereals? Baked potatoes vs chips? Butter vs margarine?

Apples off my tree in the garden are cheaper than supermaket apples which have been sprayed with pesticides etc.

"Andy Pandy" wrote

But also - just because you didn't *need* an extra couple of rooms, doesn't mean that you *can't* use them sensibly.

"Andy Pandy" wrote

Not needed. Have you ever lived in a large house?

"Andy Pandy" wrote

Yes. Those independent controls on each radiator are very useful to concentrate the heating in the places that need it the most!

"Andy Pandy" wrote

The bigger house will have an area, at the centre, which is further from any external walls.

"Andy Pandy" wrote

So what "won't work" in that case?

But Pedigree Chum is probably worse for the dog's health than leftover restaurant food. It's also more expensive than the cereal-based diets vets recommend.

I think he meant to keep the radiators in the unused rooms turned down, not right off.

Yes. It heats the centre of the house. :-)

Central heating doesn't mean you heat the whole house to the same temperature, it just means there is only one "central" point at which the fuel is burned to heat the water which is circulated to those radiators you wish to activate.

That's your prerogative.

Not quite. A Mars bar and cream cake are snacks, right enough, but an apple, though it can be eaten as a snack, can also be something you would eat as part of a meal (or an ingredient thereof) which a Mars bar would probably not be. A bread roll is possible as a snack, but is likelier, if filled, to be a meal in its own right, or, if not filled, something you would eat with a meal (with the soup).

I don't deny it. Having nothing is also an option!

No it's most certainly not irrelevant. Comparing a restaurant meal with a meal at home is not comparing like with like. You don't go to a restaurant merely to eat, you go there for the congenial surroundings, to meet others, or to take a break from chores. Hence it is not funded by your food budget alone, but alos from your entertainment budget.

Cereal vs fry-up? :-)

Yep. Baking potatoes are more expensive than frozen chips, aren't they?

Yep, I think, though probably not much in it.

I doubt it. Your apples may seem free to you, but they all become available in a small time window, don't they, so they're of limited benefit unless you can store them. You have to take account of the hidden cost of the extra garden land you needed to buy/rent with your house, and the extra attic space you need to reserve for apples (and in the winter frost they'll all rot anyway).

The point is that you'll end up using all the space regardless. I've got a snooker table set up in my front room, the family usually used the smaller back room for watching telly etc. If we have people round and need more space I'll collapse the snooker table (it's not a full size one). Takes about 5 mins. If I had an extra room I'd just leave it up all the time, instead of making efficient use of the space.

Have you never studied physics? A detached house will almost always have a larger external wall/volume ratio than a semi, terrace or flat.

Work it out.

The restaurant food is more likely to contain sugar. Do dogs brush their teeth?

So you pay to heat them.

Personally I know nobody who has a large house who bothers turning down the radiators in usused rooms, and always makes sure the doors are firmly shut all the time.

I know people who usually have a chocolate bar as "pudding". I usually have fruit.

We regularly eat bread rolls as snacks.

Which is even cheaper.

Personally I go to restaurants for the food, above all else, not because I like the wallpaper. Mostly we go as a family so it's just a case of eating with the same people I usually eat with in a different place. I take the point about perhaps going out for a meal on a friend's birthday etc, but I wasn't thinking of that sort of meal out.

And what about a take-away?

Exactly. Porridge is healthier and cheaper than the average cereal, which in turn is healthier and cheaper than the average fry-up.

I don't think so.

Margarine is usually cheaper isn't it?

Nevertheless every one I eat is cheaper and healthier than a shop bought one.

We want trees in our garden anyway cos we like them. If we didn't have fruit trees we'd have others instead which produce nothing useful other than a view.

We don't store them, we eat them/swap with friends etc.