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The Journal- house buying propaganda

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Comments

  • Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,901 Admin ✭✭✭✭✭Toots


    Spleerbun wrote: »
    I have indeed noticed that those articles are heavily geared towards promoting house ownership, but it could be more a case where it's only the people that way inclined in the first place would be bothered doing a "money diary" and sending it in to them in the first place.

    I'd say it's that. Also the volatile nature of the rental market probably has a lot of people trying to save for a mortgage, who might previously have been happy to continue renting.


  • Administrators Posts: 53,126 Admin ✭✭✭✭✭awec


    It's a sad read to see someone so obsessed about money and buying a house at such a young age. Life is for living
    Not really sure this means much.

    The earlier you start paying a mortgage the earlier you finish paying it. People taking out mortgages in their mid-20s will be mortgage free in their mid-50s. People who wait until their mid-30s will probably be paying a mortgage right up to state retirement age.

    Unfortunately this is going to be reality for a large number of the current generation. Those who don't buy at all will fare even worse, as they're going to hit retirement with only pension income and have to somehow pay rent out of it.


  • Closed Accounts Posts: 3,482 ✭✭✭Gimme A Pound


    Candie wrote: »
    I think it's more a case that the alternative to paying rent is a mortgage that gives you ownership of an appreciating asset, and paying for other services isn't comparable since there isn't really an alternative.

    If you pay an electrician or a gas fitter, it's because there's no alternative to their expertise but there is an alternative to rent if you can get a mortgage.
    Fo' sho', but people trot the line out as if that alternative is just there, indicating a lack of understanding of the difficulty involved in securing a mortgage, and then securing a property. Until the person or people's purchase has gone through, rent is not dead money.


  • Posts: 26,052 ✭✭✭✭[Deleted User]


    Fo' sho', but people trot the line out as if that alternative is just there, indicating a lack of understanding of the difficulty involved in securing a mortgage, and then securing a property. Until the person or people's purchase has gone through, rent is not dead money.

    Oh of course. I guess it's the life long renting strategy that people feel most like that about. It's hard to see the advantage in paying rent that would cover a mortage over decades, but a roof over one's head is never dead money and a lot of people have no alternatives.


  • Closed Accounts Posts: 3,482 ✭✭✭Gimme A Pound


    Candie wrote: »
    Oh of course. I guess it's the life long renting strategy that people feel most like that about. It's hard to see the advantage in paying rent that would cover a mortage over decades
    Absolutely - I don't view renting permanently as desirable if it can be avoided. And I'm glad I was lucky enough to secure a mortgage.


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  • Posts: 26,052 ✭✭✭✭[Deleted User]


    I would genuinely hate being in rented accommodation in my later years. The insecurity would drive me mad.


  • Registered Users Posts: 7,500 ✭✭✭BrokenArrows


    Candie wrote: »
    I would genuinely hate being in rented accommodation in my later years. The insecurity would drive me mad.

    Ya it would be a disaster.

    Being told at 85 that your landlord wants to sell and then having to move. Disaster.


  • Registered Users Posts: 3,205 ✭✭✭cruizer101


    NIMAN wrote: »
    Rent isn't dead money.

    You are paying money for a service, you are getting a service.

    That's like saying gym membership is dead money, or car insurance is dead money.

    A lot of people would say gym membership is in some ways dead money in that the money spent on membership would cover the cost of equipment. There is more to it than that obviously (available space, classes for motivation, etc)
    On Car insurance there is no alternative (technically you can self insure if you have a large enough reserve but its unrealistic for 99% of people).

    I do kind of agree with you that its not as "dead money" as many make it out to be. But I still think (especially in todays rental climate) if you can buy you are far better off. The security of having your own house when you retire is worth a lot.
    It is partially down to the Irish attitude to renting and so the legislation around it but that is not likely to change anytime soon.


  • Registered Users Posts: 7,500 ✭✭✭BrokenArrows


    Of course gym is dead money.

    The concept of "dead money" is that once you paid for it use the service there is no further returns.

    Its used in the house market so indicate that once you have paid for the house you continue to get returns without further investment.
    Returns being "a place to live".


  • Registered Users Posts: 8,344 ✭✭✭Ray Palmer


    Candie wrote: »
    If rent is dead money does that mean payment for any service is dead money?

    I think it's more a case that the alternative to paying rent is a mortgage that gives you ownership of an appreciating asset, and paying for other services isn't comparable since there isn't really an alternative.

    If you pay an electrician or a gas fitter, it's because there's no alternative to their expertise but there is an alternative to rent if you can get a mortgage.

    I know what you're saying though, a roof over your head shouldn't be considered dead money since it's a vital requirement.
    Except the reality is people can't afford to buy the property they are renting ever. If they buy they have to buy a property a lot cheaper than they are renting. People buy more space than they rent for their future too.
    You are paying for a service you can't afford to buy. When you buy your decision is based on a lot more factors than renting. They aren't simply comparable due to these reasons.


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  • Registered Users Posts: 3,635 ✭✭✭dotsman


    If rent is dead money does that mean payment for any service is dead money?

    Rent is currently too expensive for sure but I've never understood the dead money thing. It's a service - you've got to pay for it until you can afford an alternative.
    NIMAN wrote: »
    Rent isn't dead money.

    You are paying money for a service, you are getting a service.

    That's like saying gym membership is dead money, or car insurance is dead money.

    Gym membership and car insurance are not good examples. Unless your gym offered you guaranteed life membership that cost the equivalent of 12-15 annual fees that can be subsequently sold on to anyone at a later date, likely at a higher price than what you paid.

    To really compare renting/buying property, you need to look at the next closest thing - a car. Do you rent your car?

    If you need a car for a few weeks/months (say, you are on holidays, or temporarily relocated though work etc), you rent it. If you need it longer term, you buy it.

    Its the same with property. If you only intend on living in a particular city for a few months/years, then, yes rent. It is simply not worth the hassle, cost and risk of buying a property just to try and sell it on a year or two later. But if you are likely to live in that city for 5+ years, then you are far, far better off buying (on average - obviously some exceptions!). And every monthly rent payment you make is simply being wasted (i.e dead money).

    Another way to look at it is to simply see your monthly rent as a hugely expensive fee for having the flexibility of easily relocating (but also accepting the risk of being forced to move on).

    Another way to look at it is like this. There are 2 options:
    1. If you are going to rent for the rest of your life, you are going to pay several multiples of what you would pay for a mortgage, the most expensive of these payments being when you are retired, with a huge amount of risk of being kicked out/made homeless, and nothing to show for it when you die.
    2. If the above is not desirable (would be crazy to choose that option), then you are going to likely rent for a number of years, pay a mortgage for a number of years, and then live rent/mortgage free for the remaining years. You are also left with a huge asset that can be sold to help pay for nursing home (or before-you-die-bucket-list-adventure:D) etc or passed on to children.
    Obviously, option 2 is the obvious best choice. So, next, you look at the figures. Say you live for 60 years after you move out of your parents place. Imagine a timeline of those 60 years (from left to right). One example would be to rent for 10 years, pay a mortgage for 30 years and then enjoy free living for the remaining 20 years. However, if you rent for 20 years, then pay mortgage for 30 years, you only get 10 years of free living. If you do the opposite and go straight in to a mortgage for 30 years, you get 30 years of free living! Basically, every monthly rent payment to the left of starting that mortgage is a waste (financially).

    The only reason the average young person doesn't go straight in to a mortgage is:
    1. they are likely to move around in the first few years as they establish their careers
    2. they cannot afford to take on a mortgage (deposit and salary) on day 1 of leaving home.
    But the sooner they can get past those two points and buy a home, the huge amount of money they will save over their lives. The difference between buying in your late 20's compared to your late 30's could easily cost you hundreds of thousands of euro over the course of your life.




  • of course it is propaganda. Does anyone remember the glossy property supplements to the Sunday papers back during the Great Delusion?

    The Sunday Times, Independent etc were probably handed a blank cheque by the estate agents so they could print what they wanted.


  • Closed Accounts Posts: 3,502 ✭✭✭ Kelsey Mango Leakage


    of course it is propaganda. Does anyone remember the glossy property supplements to the Sunday papers back during the Great Delusion?

    The Sunday Times, Independent etc were probably handed a blank cheque by the estate agents so they could print what they wanted.

    Yes because estate agents don't sell any properties in a downturn. :pac:


  • Registered Users Posts: 24,462 ✭✭✭✭Cookie_Monster


    Zenify wrote: »
    Be conscious of this when you are next reading them and let me know what you think?

    lol


  • Registered Users Posts: 18,357 ✭✭✭✭kippy


    Property transactions are good for many areas of the economy so there are so many vested interests out there putting their own spin on things however I am not sure about this particular conspiracy theory. Daft make money out of ads for sales as well as rentals. Doesn't really matter to them whether people are selling or renting, they make money on adds for both services.

    The reality is, in most circumstances buying is a better option than renting. Buying however is a difficult thing to do.


  • Registered Users Posts: 18,357 ✭✭✭✭kippy


    Yes because estate agents don't sell any properties in a downturn. :pac:
    Tbf, estate agents went bust left right and centre during the downturn and property sales plummeted meaning there were far less advertorials and advertisements in media etc.


  • Closed Accounts Posts: 3,482 ✭✭✭Gimme A Pound


    dotsman wrote: »
    Gym membership and car insurance are not good examples. Unless your gym offered you guaranteed life membership that cost the equivalent of 12-15 annual fees that can be subsequently sold on to anyone at a later date, likely at a higher price than what you paid.

    To really compare renting/buying property, you need to look at the next closest thing - a car. Do you rent your car?

    If you need a car for a few weeks/months (say, you are on holidays, or temporarily relocated though work etc), you rent it. If you need it longer term, you buy it.

    Its the same with property. If you only intend on living in a particular city for a few months/years, then, yes rent. It is simply not worth the hassle, cost and risk of buying a property just to try and sell it on a year or two later. But if you are likely to live in that city for 5+ years, then you are far, far better off buying (on average - obviously some exceptions!). And every monthly rent payment you make is simply being wasted (i.e dead money).

    Another way to look at it is to simply see your monthly rent as a hugely expensive fee for having the flexibility of easily relocating (but also accepting the risk of being forced to move on).

    Another way to look at it is like this. There are 2 options:
    1. If you are going to rent for the rest of your life, you are going to pay several multiples of what you would pay for a mortgage, the most expensive of these payments being when you are retired, with a huge amount of risk of being kicked out/made homeless, and nothing to show for it when you die.
    2. If the above is not desirable (would be crazy to choose that option), then you are going to likely rent for a number of years, pay a mortgage for a number of years, and then live rent/mortgage free for the remaining years. You are also left with a huge asset that can be sold to help pay for nursing home (or before-you-die-bucket-list-adventure:D) etc or passed on to children.
    Obviously, option 2 is the obvious best choice. So, next, you look at the figures. Say you live for 60 years after you move out of your parents place. Imagine a timeline of those 60 years (from left to right). One example would be to rent for 10 years, pay a mortgage for 30 years and then enjoy free living for the remaining 20 years. However, if you rent for 20 years, then pay mortgage for 30 years, you only get 10 years of free living. If you do the opposite and go straight in to a mortgage for 30 years, you get 30 years of free living! Basically, every monthly rent payment to the left of starting that mortgage is a waste (financially).

    The only reason the average young person doesn't go straight in to a mortgage is:
    1. they are likely to move around in the first few years as they establish their careers
    2. they cannot afford to take on a mortgage (deposit and salary) on day 1 of leaving home.
    But the sooner they can get past those two points and buy a home, the huge amount of money they will save over their lives. The difference between buying in your late 20's compared to your late 30's could easily cost you hundreds of thousands of euro over the course of your life.
    I don't think anyone is disputing the above though. I think most people's ambition in this country is to buy a place of their own. I'd say those in their 30s/early 40s here who are a-ok with renting still, are extremely few and far between.

    But the point is, now, more than ever, securing a mortgage is pretty difficult. Impossible for some. And that's before the lottery they face when they go property-hunting. In that sense, until they get the paperwork confirming that the property is theirs, renting is essential - they have no other option but renting (apart from moving into their folks' place but that's not always an option - or a desire). When it's an essential, it's definitely not dead money.

    The only scenario where I'd view rent as dead money is if the person has the resources to secure a mortgage but doesn't bother. However that's an unlikely situation.


  • Moderators, Arts Moderators Posts: 2,283 Mod ✭✭✭✭Chorcai


    The problem is every Mick n Mary are a ****ing landlord, who provide ZERO services and rely on "redecorating" to get the current tenants out to get new one in only to up the rent for the same sad **** hole of a place. Irish landlords are the worst.


  • Registered Users Posts: 6,001 ✭✭✭handlemaster


    Chorcai wrote: »
    The problem is every Mick n Mary are a ****ing landlord, who provide ZERO services and rely on "redecorating" to get the current tenants out to get new one in only to up the rent for the same sad **** hole of a place. Irish landlords are the worst.


    So housing isnt a service ? What is it then ?


  • Registered Users Posts: 15,630 ✭✭✭✭whisky_galore


    Chorcai wrote: »
    The problem is every Mick n Mary are a ****ing landlord, who provide ZERO services and rely on "redecorating" to get the current tenants out to get new one in only to up the rent for the same sad **** hole of a place. Irish landlords are the worst.

    The whole set up is geared towards temporary, not long term or lifetime accommodation. Like students or the cast of Friends you can rent for a while and then you're expected to 'grow up' and buy a house.


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  • Registered Users Posts: 2,382 ✭✭✭1874


    Chorcai wrote: »
    The problem is every Mick n Mary are a ****ing landlord, who provide ZERO services and rely on "redecorating" to get the current tenants out to get new one in only to up the rent for the same sad **** hole of a place. Irish landlords are the worst.


    Have you any experience of landlords elsewhere? Im sure there are bad/slum landlords (literally) everywhere.
    The regulations/legistlation thats exists here is not conducive to good landlords in the main, it actually favours bad landlords.

    If a private person invests their money in a property and a private person rents that property, then state has to have no involvement in funding it BUT they get a return of practically 50% of the rent, essentially funded by the renter in the main.
    If the state is paying for the tenant, then the State is funding it piecemeal and they get a 50% deduction in the cost as the landlord returns this through taxation (while this costs them less in the shorterm they will ultimately pay more for the rent in the longterm than if they built the house and outright rented it even at an exceptionally low cost), the State/Councils have not been very good at this, either renting/managing/even collecting small amounts of rent, and they sold off a lot of what they had, so they not only dont have to fund maintenance, they arent even funding the building of property.


    As it appears to cost less to use these means to provide housing, and this seems to be the means which exists today, I think Im correct in this.

    If they were to fund such projects, where would they get the money from? and how would that affect people and their taxes overall? I dont think they could source the finances on the scale required, in the past it was possible, but Im not convinced now, certainly the willingness to entertain it doesnt seem to exist.
    I think there should be private and public housing, the State should never have sold off their stock via the councils, instead they could have raised funds by selling some at or nearer market value and had clawbacks for profits where they exceed a certain value or percent, enough to ensure they dont lose out, but small enough to encourage people that can afford to move up the ladder on their own OR they could have had preferential clauses to buy back property when it was sold. Even if they had taken on private companies to manage the rents/maintenance for them they might have had a more efficient cost effective service, with them setting the rents relative to the means of the tenants.


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