Invest in a more expensive house

SBarrett said:
Pat Kenny is a prime example of this. He said in 2013 that he couldn't afford to retire despite earning €950,000 a year at one stage.
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This was a completely absurd claim and I don't know who on earth would believe it.

Pat Kenny is 71, and having seen him up close, looks about ten years younger. He basically loves his job and doesn't want to retire.

The 'I can't afford to retire' line is just a ruse to deflect attention from the fact that he just really likes his job.
 
Never be surprised by the spending habits of the professional classes. There are people who spend €300k a year net and you’d struggle to see where it goes.

Someone like that often “cannot afford to retire”.
 

Thanks for that input. i expect moving from a 300k house to a 500k house will cost me an extra 2k a year in outgoings (incl property tax). so i am down 1% a year automatically.

ill keep an eye on the budget and see if there are any tax avoidance measures apart from pensions for investing.
 

In theory equities are far better than Principle private residence for investing. i agree, they are better for the common good. sharing your money with companies that need it to provide goods/services. However there is the issue of dividends tax and CGT which dont apply to principle private residence.
 
Except one’s PPR doesn’t produce any income ordinarily, and there’s no CGT on an asset (such as a US domiciled MSCI World ETF) on death.
 

This post alone should be a sticky to warn anyone against buying an old expensive house!
15k per year for the garden?! This post will be deleted if not edited immediately wept.
 
My brother got caught with that scaffolding problem too health and safety etc
 
Investadvice said:
Pay Kenny made terrible investment decisions which were pretty public. Property, bank shares etc
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but pat kenny is a smart man, an engineer by training but he still made bad investment decisions like lots of other people at the time. Smart professional people like yourself can still make bad investment decisions. The bad investment decision wasn't the bank shares per se but it was putting all his eggs in the one basket, just like you want to do now by ploughing all your money into an expensive house. It was only in hindsight that the bank shares became a bad investment, it wasnt obvious in the early 2000s.
 
Thanks again. So to sum up to invest in a more expensive principle private residence::

Reasons for

1. Arguably there is less tax (PPR tax exemption)
2. Historical data- there is some evidence that historically property has beaten equities. Land is limited and is likely to match inflation

Reason against

1. Lacks the diversification that can be achieved with equities - eggs in one basket. thanks Joe sod.
2. Potentially high maintenance costs and property tax - Thanks Emm Dee for your post above
3. Delay in liquidising the asset.
 
clueless2019 said:
2. Potentially high maintenance costs and property tax - Thanks Emm Dee for your post above
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Well - HIGHER costs. All property requires on-going maintenance (second law of thermodynamics and all that). You just need to factor it in. An older house does have a lot more character and you need to choose whether you get enough enjoyment from it (you forgot to add "utility" to your "reasons for").

It's not a completely rationale decision - if we all made purely rational decisions we would all be driving Micra's (or whatever)
 
The proposition could probably be separated into upsizing into a more expensive home, and upsizing into an older room likely to need work. The running cost numbers are likely to be vastly difference between a £2M modern home, and a £2M old property with an overgrown garden and roof which has seen its best days pass.

Large older homes can easily become money pits with some unsurprising numbers quoted already, and I am not sure their price typically reflects the risk, compared to the modern alternative in the same location. I suspect there are few cases where the older option represents a solid investment unless an extremely detailed inspection is done to unearth all possible problems? Personally, while I might aspire to a larger residence, I wouldn't touch such an older home if there was any risk of it becoming "an ongoing project" and the associated uncertainty.

Has anyone been through this thought process in terms of upsizing as an investment into a "low maintenance" property?
 
presidenttttt said:
Has anyone been through this thought process in terms of upsizing as an investment into a "low maintenance" property?
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I've moved from a modest house to a much larger (new build) home - with rooms that are not utilised, so to speak. Although the prime reason was for my young kids "social life", better comfort within the home, less work commute and more of a community around - I was thinking that it would be an ideal investment in (many) years down the road when I would downsize. Mortgage is planned to be paid on this new place in a relatively short number of years, so hoping that once the kids move out (I KNOW - might never happen ) and this current place becomes too big for the two of us, a sale & purchase of something smaller, should help bolster the finances.
 
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