Sell House And Invest Money ?

[rocky123]

I live and own a house (company) in Pattaya and have a property worth about 120 GBP in England that brings me in 475 GBP a month. I feel that soon the property will need a bit of money spent on it as the utilities are aged and will soon need replacing, renevating etc. Should I sell up now and invest the 100 grand + and have a monthly income from the cash. Can anyone advise on a savings plan etc that would be safe with a good return. By the way I am 52 and have lived in Pattaya for 3 years and cant see myself ever living anywhere else I also have a very good pension coming in each month, but I could do with a little cash in hand.

MANY thanks for any advise.

[CTO]

I was going to say buy some shares in Sat-Ed, but realisticly, it sounds like you need a secure boring investment, go blue chip stocks.

[Edonista]

I think the decision of selling the property in UK is a wise one, expecially considering the world wide declining real estate market. I guess you should invest the resulting money in bonds, possibly in a tax haven like a Singapore bank. There you will be able to keep the amount in GBP or decide to change it in other currencies. If you do not mind running risks, I suggest turkish lira and brazilian real bonds.

[CWMcMurray]

I say sell it as well, if you are only looking for 475 a month that means you only need a 5.7% return to maintain that income. Anything over that could be used to increase the principle.

[Morden]

In the long run, bricks and mortar in the UK is one of the safest possible investments. The rental market is growing, values go up in the long run, despite temporary setbacks from time to time, and the property is always there for you should you need to return for a while. There is some suggestion that values might fall but that's not at all certain.

My suggestion to you, bearing in mind that the value may fall for a while next year and you are faced with the possibility of repair bills, is to sell it soon. However, I also suggest that you then use the money to buy another property to rent as soon as possible, perhaps pausing for a few months to monitor market value before you do so. If values for your type of property drop, hang on for a while until they stabilise. With cash in your hand, look for an area of the country where the ratio of capital cost to rent is better. Buy something in good repair with a sitting tenant.

I think that's a better idea than stocks and shares and other such investments. That type of investment requires you constantly to monitor its value, it can disappear very quickly and you can never live in it!

[Jingthing]

I think that's a better idea than stocks and shares and other such investments. That type of investment requires you constantly to monitor its value, it can disappear very quickly and you can never live in it!

I disagree with that. Historically, (talking the US) the stock market returns 9 to 10 percent per year over the long term. Take much less out per year and it almost will never disappear, in fact, your wealth can increase. Much less work than bricks and mortar too! I have been doing this for 4 years so far and lucky to be in a bull market, but living fine and getting richer with basically zero work.

The only good reason I can think for keeping a western house is if you think there is a great chance you will want to return and live in it.

Edited October 29, 2007 by Jingthing

[siam-i-am]

I live and own a house (company) in Pattaya and have a property worth about 120 GBP in England that brings me in 475 GBP a month. I feel that soon the property will need a bit of money spent on it as the utilities are aged and will soon need replacing, renevating etc. Should I sell up now and invest the 100 grand + and have a monthly income from the cash. Can anyone advise on a savings plan etc that would be safe with a good return. By the way I am 52 and have lived in Pattaya for 3 years and cant see myself ever living anywhere else I also have a very good pension coming in each month, but I could do with a little cash in hand.

MANY thanks for any advise.

I have several properties rented out in UK and a few quid (started with thousands) in shares. Stick to property ok so you spend a few pounds in repairs, it's tax deductable. If you've told the tax man your here and don't spend more than 90 days per year in UK there is no capital gains tax to be paid after 5 years. If you can find 7% tax free for a minimum of 2 years take it, otherwise you will lose money. Trust me, been there done that.

[rocky123]

Thanks for the great advise guys, I will think it over, dont want to rush into a bad move, its my life. I have dabbled on stock market in the past and got burned so need a good and sure thing.

[RAZZELL]

Thanks for the great advise guys, I will think it over, dont want to rush into a bad move, its my life. I have dabbled on stock market in the past and got burned so need a good and sure thing.

You're only 52. I'd keep a foothold in the UK. In another 10 years that house could be worth £250k. If you need some cash, what about remortgaging?

Enjoy your retirement

RAZZ

[Jingthing]

I wasn't talking about dabbling or trading stocks or picking stocks. I was talking about long term investing in a diverse basket of thousands of stocks from all over the world. Then you almost don't have to look at it (except it is fun to do when its up).

What I find funny are people who assert that real estate investment carries no risks.

Edited October 29, 2007 by Jingthing

[Khun Jean]

When stocks go up it still is not profit. For that you need to sell. And then what? Buy stock again?

Stock markets tend to drop faster then they go up. So you can sit and watch it grow for a few years and see it disappear in a few days.

It is not for everyone.

[Gary A]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

[Prakanong]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

The UK is a different propert market than the USA though - a lot less land and high population density;-)

Yes there has been a correction before but it usually bounces back quite quickly - depending on the location of the property and how much equity he has in it I think he might be better off keeping it.

[Jingthing]

When stocks go up it still is not profit. For that you need to sell. And then what? Buy stock again?

Stock markets tend to drop faster then they go up. So you can sit and watch it grow for a few years and see it disappear in a few days.

It is not for everyone.

You sell a small percentage every year. If you start with enough, you don't need to buy anything else, except you might need to rebalance. For example if you want to have 25 percent in China stocks and the value changes so that you have 50 percent, then you would sell half and reinvest in something else.

The only time in modern history that stocks have dropped like you imply they always do was in 1929.

Edited October 30, 2007 by Jingthing

[siam-i-am]

When stocks go up it still is not profit. For that you need to sell. And then what? Buy stock again?

Stock markets tend to drop faster then they go up. So you can sit and watch it grow for a few years and see it disappear in a few days.

It is not for everyone.

You sell a small percentage every year. If you start with enough, you don't need to buy anything else, except you might need to rebalance. For example if you want to have 25 percent in China stocks and the value changes so that you have 50 percent, then you would sell half and reinvest in something else.

The only time in modern history that stocks have dropped like you imply they always do was in 1929.

I beg to differ

[Jingthing]

I beg to differ coffee1.gif

Thats cool. Disagreements make markets. I have pretty much bet my life on my strategy and its working great so far. I don't expect it to always work so well, but I have done analysis and even sought professional opinions, and they agree I am doing it right. People choose the strategies they are comfortable with I guess. Not everyone does everything right or wrong, you win if you don't go broke and can live well.

Edited October 30, 2007 by Jingthing

[Jingthing]

The UK is a different propert market than the USA though - a lot less land and high population density;-)

Yes there has been a correction before but it usually bounces back quite quickly - depending on the location of the property and how much equity he has in it I think he might be better off keeping it.

UK, US, or anywhere, stocks and real estate are totally different investments.

Real estate is not liquid.

Houses can burn down, sometimes insurance is inadequate to rebuild.

Real estate returns over time are no better than stocks, especially if you are paying interest to carry a loan, and considering all the upkeep costs.

Real estate is high maintenance.

If renting, management fees must be paid if you are an absent landlord.

Bad tenants can trash your place and not pay rent until you can evict them.

The good part, real estate, you can live in it.

That said, I wouldn't have been able to retire in Thailand if I hadn't bought the right piece of real estate at almost exactly the right TIME.

Edited October 30, 2007 by Jingthing

[PCA]

When stocks go up it still is not profit. For that you need to sell. And then what? Buy stock again?

Stock markets tend to drop faster then they go up. So you can sit and watch it grow for a few years and see it disappear in a few days.

It is not for everyone.

You sell a small percentage every year. If you start with enough, you don't need to buy anything else, except you might need to rebalance. For example if you want to have 25 percent in China stocks and the value changes so that you have 50 percent, then you would sell half and reinvest in something else.

The only time in modern history that stocks have dropped like you imply they always do was in 1929.

I beg to differ

me too

[Patriciachas]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

The UK is a different propert market than the USA though - a lot less land and high population density;-)

Yes there has been a correction before but it usually bounces back quite quickly - depending on the location of the property and how much equity he has in it I think he might be better off keeping it.

I agree a 120,000 that needs some work doing to it will not lose that much if the property market dips slightly keep the property it will make you more money in the long term.

[LaoPo]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

The UK is a different propert market than the USA though - a lot less land and high population density;-)

Yes there has been a correction before but it usually bounces back quite quickly - depending on the location of the property and how much equity he has in it I think he might be better off keeping it.

I agree a 120,000 that needs some work doing to it will not lose that much if the property market dips slightly

keep the property it will make you more money in the long term.

The long term future for real estate might not be so rosy anymore as you think.

It largely depends on what kind of property the OP is talking about and in what condition the same is.

Interesting read:

" Bennett shorted British Land Co. Plc, the U.K.'s second- largest real estate investment trust, which said on Aug. 16 that fiscal first-quarter profit fell 34 percent.

U.K. commercial real estate in September had its worst return in more than 17 years as the value of shops and offices fell, according to research firm Investment Property Databank Ltd. British Land has dropped by 40 percent this year. "

From:

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

[Prakanong]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

The UK is a different propert market than the USA though - a lot less land and high population density;-)

Yes there has been a correction before but it usually bounces back quite quickly - depending on the location of the property and how much equity he has in it I think he might be better off keeping it.

I agree a 120,000 that needs some work doing to it will not lose that much if the property market dips slightly

keep the property it will make you more money in the long term.

The long term future for real estate might not be so rosy anymore as you think.

It largely depends on what kind of property the OP is talking about and in what condition the same is.

Interesting read:

" Bennett shorted British Land Co. Plc, the U.K.'s second- largest real estate investment trust, which said on Aug. 16 that fiscal first-quarter profit fell 34 percent.

U.K. commercial real estate in September had its worst return in more than 17 years as the value of shops and offices fell, according to research firm Investment Property Databank Ltd. British Land has dropped by 40 percent this year. "

From:

http://www.bloomberg.com/apps/news?pid=206...&refer=news

LaoPo

Commercial property you are pointing to there.

The UK Government has announced massive housebuilding programs and its still reported it can not keep up with demand.

Of course it depends on where the house is but even in my part of the UK NE England there has been massive price rises - there are 400,000 GBP houses on top of the old coal mine I used to work at - when I left that town you could get a 2 bed flat for 5000 and we are not talking that long ago - 22 years

The UK is very small with a very dense population plus a growing population at that - 50+ million now to reach 70+ million in 20 years time

[deckx]

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

I got money in 5 different funds, YTD best one is -1.2% worst one was -34.7 % , did ok last couple of years though.

You could get at least 6% on a sterling acc at the moment which i would be more than happy to make right now.

[Jingthing]

I am playing the contrarian a bit here, but my main point is that retirement funds need to be radically diversified. If this house in the UK represents a huge percentage of this person's wealth, that may be too many of his eggs in one basket for optimum safety.

Edited October 31, 2007 by Jingthing

[Firefan]

Sorry to hear but holy cow! US market (Wilshire 5000) up 11% YTD, Non-US developed (MSCI EAFA) up 18% and emerging markets (MSCI EM) up 51%.

Takes one heck of a fund manager to lose money in those markets! (Note; these returns are calculated in USD wherefore part is currency gains).

Presume you are then in something else than direct equities - maybe bond funds or hedgefunds? US TIPs are up about 8% YTD..... and my emerging bond fund up about 10%....

Think you should look over those funds again.

Cheers!

The real estate bubble will burst. It's just a question of when and not IF ! I'd sell and buy some nice safe mutual funds. There are tons of them available.

I got money in 5 different funds, YTD best one is -1.2% worst one was -34.7 % , did ok last couple of years though.

You could get at least 6% on a sterling acc at the moment which i would be more than happy to make right now.

[Firefan]

Jingthing; very good argument. I agree. The counter argument is that the OP already have a good pension, so taking on some risk (be it concentrated real estate or stocks) might be ok in this case.

That said; the OP does not feel comfortable with investing in stocks, but there are other options out there for obtaining 6% (corresponding to the OP rental income) fairly safely. Offshore (big banks/investment houses) CDs in British pounds could probably do it?

Cheers!

I am playing the contrarian a bit here, but my main point is that retirement funds need to be radically diversified. If this house in the UK represents a huge percentage of this person's wealth, that may be too many of his eggs in one basket for optimum safety.