Own a House or Rent? That is the Question.

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Own a House or Rent? That is the Question.

With the possibility of the dollar being worthless.  Would it be smart to pay off your house or should you hold assets in risk assets and attempt to take advantage of sky rocketing commodities?  anyone?  bueler, bueler, bueler????

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

I have the same question.  Chris has a link to patrick.net on his list of recommended sites and there is an excellent "rent vs buy" calculator to look at the real cost (versus its value to you I suppose) of buying vs renting.  It is a much more realistic calculator than many I have used: By that I mean that it factors in the return on your money if you were to invest it and covers a lot of costs associated with buying and owning a home that other calculators I have used did not include.

http://patrick.net/housing/calculator.php

Good luck in your decision!

Denise

edited

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Real estate is still an asset. If you can pay cash, I would wait. If not interest rates may decide for you-they are going up. If your renting, I would get a longterm lease to fight inflation on rent increases. My guess is you can break it with a one month penalty. Things I would consider is job security, age, if you have to move for a job, you might limit yourself. I no longer believe in the American dream so think hard before you decide.

 I spent  two years fighting foreclosure, it was not how I like to spend my time. NO on variable loans, two loans. And get a good inspector/realitor. Jon

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Nick

I take a very conservative approach.  If your home is not located in a sustainable area i would sell.  If the home affords you the opportunity for forming community, gardening, sustainability, etc you may want to keep it.  I would develop a core of inflation protection as Dr. Martenson suggests, such as precious metals, food storage,  useable tools, and maybe selected stocks.  Personally, I would otherwise then focus on paying down the mortgage.  For me, worrying about a volatile market and holding stocks and commodities is just not worth it.  If I pay down the house, and in the meantime miss out on some profits, Im ok with that.  However, I do want to avoid being demolished in a crash in the market.  Keep in mind, if you pay down your mortgage, you can still turn around and sell the house.  It may be for a much lower price, but nevertheless, your home is a store of value (esp if well maintained, effecient, on good land).

Brian

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

thanks denise, much appreciated

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

thank you brian for your thoughful reply!

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Gary Schilling said today that housing prices are going to drop another 20%. So don't be in any hurry if you don't have to and see if the deflation happens in your desired neighborhood.

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Stimulus & QE 1, 2 and (likely) beyond has been deployed to try and avoid deflation in the housing and CRE markets. The problem is that they won't win that fight against deflation - but will have heaped more debt upon debt trying. DnDold is correct and the Fed is throwing good debt after (more) bad. Despite their attempts at forcing consumers to 'spend', hang on to your money and wait.

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Your title seems to ask whether you should own or rent. The body of your post seems to ask whether you should pay off your mortgage or not. Since people have already addressed the first question, I'll add to the second:

In deciding whether to pay off your mortgage, it depends a lot on how stable your income is. If your income is uncertain, then eliminating debt as quickly as possible is a good move. On the other hand, if you feel reasonably confident that you will continue to bring in enough to cover your living expenses and mortgage, then I would keep the mortgage on the house (using a fixed rate mortgage only!) and invest the money in non-debt assets (no bonds) that are likely to increase in value at a rate faster than your interest rate. This creates a positive expected return under normal circumstances and an amazing return if inflation picks up, as expected by many of us here.

Under high inflation, the very worst investment is to loan longterm money to someone at a fixed interest rate, because that loan is going to be paid off with relatively worthless money. You are taking the opposite side of that trade when you have a fixed rate mortgage. If inflation takes off, you'll be earning way more, your assets will be worth way more, and you'll be able to pay the mortgage payment with what then could be pocket change.

Final reason: the US government subsidizes people having mortgage debt by allowing you to deduct the interest payment from your taxes. That subsidy is not insignificant and you'd be giving it up if you paid off your mortgage. 

What to invest in? I would invest in equal parts:

-33% in physical precious metal bullion (silver and gold, especially, and NO NUMISMATIC CRAP). If you can buy 500 ounces of silver or 20 ounces of gold at once, the best place is Tulving.com/goldbull.html. The website isn't impressive, but his premiums are tiny and that includes free shipping and insurance to your front door. If you can't buy that much at once, then look at APMEX and Gainesville Coins. If you don't know what to buy, start off with Gold American Eagles (you should pay about $50 over spot). Spot can be found at http://www.kitco.com/market/ . For silver, you can buy Silver American Eagles for spot + $2.50 or maybe a bit more. I would also seriously consider 1 oz rounds and 1, 10, and 100 oz bars. These should all be .999 pure silver only. Finally, you might want to invest in some "junk" silver, which is 90% pure silver pre-1964 dimes, quarters, and halves. These can be bought on Tulving for spot minus $.20/oz, delivered to your front door.

-33% in a domestic equity no-load mutual fund with low expenses (Vanguard's S&P 500 fund is astonishingly cheap and over the long run smokes almost all other funds because of the low expenses)

-33% in an overseas equity no-load mutual fund with low expenses (Vanguard has several, which I can't remember off-hand, but I'd look for one that focuses on Asia)

Good luck!

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

I also find myself in the buy/rent dilemma and would appreciate some comments/suggestions on my strategy.

I'm based in the UK, am reasonably financially secure (well paid job) and already hold some gold and silver (with bullionvault). Recent reports(eg. here and here), which I believe to be credible based on my own observations, are that we're going to see price drops of 5-10% or more. We're now selling our house to free up capital to invest in more precious metals (PMs). The money we'd then expect to spend on rent will be about half of what we'd lose if our house dropped by 10%. If PM's go up as expected then we protect ourself from house price drops and benefit from PM price increases.

We also see that inflation is higher than the Bank of England (BoE) is targeting (eg. here and here), Value Added Tax (VAT) is increasing from 17.5% to 20% from the New Year (here), interest rates are projected to rise to a more normal 5% (here) or so (no dates given though I expect 2 years) and a host of other costs. So Joe Public is going to be squeezed hard this year. Also, it's been nearly 2 years since the BoE dropped interest rates to 0.5% (here) so anyone who locked into a favorable 2-year mortgage rate, or has been sitting on the variable rate since then, will be looking at much higher mortgage (ie. normal) fees soon (here). All of this I expect to translate into more property sales and foreclosures.

In short, our strategy is to free up money now, protect it from inflation whilst growing it with commodities, cash out in perhaps 2-3 years and then look to pick up cheap(er) property to live in (mortgage free) and rent out (our new revenue stream).

Does the above make sense? Any advice?

Conversely, we could re-mortgage (capped or fixed over 3-5 years) to free up some capital to invest into PM's. Though the house drops in value, we could easily pay off our new mortgage should we experience high inflation though this taking on debt flies in the face of ChrisM's advice.. Any advice?

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

jumblies

 

I like your strategies in that they are income producing. Your first strategy of renting out primary home and buying new home with cash on the surface sounds promising. My only concern is when you cash out of precious metals, let's say Gold is 8K and Dow is 8K, you might find better returns from global blue chip stocks trading at discount prices with attractive yields. We had a housing bubble here in the US so this means we are not in a cycle where we can expect prices to return to pre-recession levels anytime soon. By time we deleverage and recapitalize, it might be another 10-20 years. The next upcoming generation of home buyers no longer sees owning home as a dream.

Second, even though you are remortgage at fixed rate which is nice in upcoming climate, Chris's counsel of staying out of debt has given us significant freedom. You cant put a price or ROI on being debt free.

Best to you

Joe

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

I would not consider renting right now as I am in the process of improving my home to increase self sufficiency on multiple fronts.  That seems to be the down-side of renting, long-term self-sufficiency efforts (fruit and nut trees, etc) or those involving significant capital (PV) are not feasible.

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

jpetr - thank you for responding

you might find better returns from global blue chip stocks trading at discount prices with attractive yields

that may be true but i really don't know the stock market and aside from getting into PM's this year I try to avoid putting my money into things i know little/nothing about. I'm sure I could get better gains from the market if I knew what I was doing.

next upcoming generation of home buyers no longer sees owning home as a dream

Perhaps I'm going a bit CT here, but this bothers me a little. I understand the sentiment and I read an article earlier today talking about how rentals in NYC work out around half the yearly cost of owning. But if only the elites own and the rest of us rent, does this not just continue the model of landowners and serfs? I think owning your home is good so long as you're not saddled with debt.

staying out of debt has given us significant freedom

Completely agree with you there.

Tall - good points

would not consider renting right now as I am in the process of improving my home to increase self sufficiency on multiple fronts

Completely understand this. We did consider renting a smallholding but I'd be loathe to put much effort into establishing something I'd be walking away from. In this case I'd rather own the smallholding as the investment is being put into the ground, the infrastructure and the life you'd build there. That has real value.

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

It is a complex question that is heavily influenced by personal circumstances.  The first question is, do I live in an area that I will happily spend the rest of my life or do I foresee that circumstances (job, etc.) that may cause me to move in 5 years or less?   Then the question of value comes into play and that again is a highly personal and somewhat subjective question.  My old rule of thumb is rent X 100 = aprox. value.  So if you have two nearly identical properties and one can be rented for $500 and the other is for sale at $100,000. then the rent situation is favored.  Now that rule of thumb can be affected by interest rates and a few other things like the property taxes and insurance that can skew that thumb number one way or the other.

I'm currently leasing a 5 acre place with a comfortable house, shop, fruit trees, grape vines and plenty of garden space.  It also has several springs, an excellent well and the landlord pays the electricity which leaves the propane as the primary additional expense (about $2,000 annually). My lease is $600 per month.  Property taxes and insurance are low here so those would total about $1,200 per year and aren't a big factor in the buy / lease decision.  Given all the factors, currently I would value this property at no more than $90,000.  The owners owe about $150,000.

So I'm waiting as the foreclosures roll in and property values continue to adjust downward.  At some point I will own when me and right piece of property at the right price meet.  I'm not trying to pick the "bottom" it just has to make sense to me as I plan to live here till they stick on the toe tag.

I have a fixed income and the conversion from renter to owner will affect my upfront cash flow to the tune of about $300 - $400 a month which I figure will end up going towards upgrades, maintenance and repairs over time. 

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

thank you for your well thought out answer.  I am doing most of what you mentioned!  the main item i am worried about is that if there is a major bump in the market and  it seems almost anything can derail the market.  I would hate to see my 401k drop in half again when i could have just bit the bullet and paid off my house ( even if there is deflation in the housing sector and even if i lose a tax deduction and even if i cash out part of my 401k to complete the pay off , i understand about the tax and penalty involved with that.)  i figure a whole house paid off is worth a half of a 401k any day. 

ps, i probably would rent for another year and then consider the idea above, my income is stable ...I would appreciate any of your thoughts on this

 

thanks again.

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

thank you for your well thought out answer.  I am doing most of what you mentioned!  the main item i am worried about is that if there is a major bump in the market and  it seems almost anything can derail the market.  I would hate to see my 401k drop in half again when i could have just bit the bullet and paid off my house ( even if there is deflation in the housing sector and even if i lose a tax deduction and even if i cash out part of my 401k to complete the pay off , i understand about the tax and penalty involved with that.)  i figure a whole house paid off is worth a half of a 401k any day. 

ps, i probably would rent for another year and then consider the idea above, my income is stable ...I would appreciate any of your thoughts on this

 

thanks again.

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

i appreciate your comments jon, thanks

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

great points,thanks brian

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

i like  your ideas of investing in commodities but diversify:  A.M.E ,  AGRICULTURE, METALS AND ENERGY all are critical for all economies, especially growing ones like China and India ( they alone represent over 2.3 BILLION PEOPLE to service.) Once they get a taste of capitalism i think they will want more!!!!   

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

@jumblies, sounds like we think alike...seems to me rent untill you feel the housing market has finished it's retracement.  Diverisify your commodity exposure, remember A.M.E... AGRICULTURE, METALS, ENERGY and you may want to invest in foreign currencies. get out of US dollar and Pounds. they will continue to devalue them.   When time is right purchase acreage (if it has water great!) , away from populated areas, practice farming, store food.  I think this is the road i will walk.

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

on the subject of investing in agriculture, metals and energy, i think i have the metals side covered with gold and silver (all with bullionvault, which i hope will be safe). but agriculture and energy i know nothing about. since i don't know/track companies in these sectors can i buy the commodity? and if so how does that work? (storage?) or do i go for something like an etf (ugh!) ? or does it need to be in something like energy companies, such as oil/gas/electricity producers, or agriculture such as sugar/coffee/grain producers/refiners?

where would be a good start for me to learn about investing in these sectors given that time is short and there's a lot to learn? (i can hear the groans from the experienced traders already, but you gotta start somewhere)

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

i would use ETF's...let's think here a little bit.  china and India alone have 2.3 BILLION people to service. Here in the US we have a poplulaiton of 300 million.   When the infrastructure is in place they will need lots of OIL, GAS and Electricity, FOOD of all kinds, gold, silver, copper (for infrastructure).  It won't be a straight line up but I don't think in the long haul this is going away.  ETF's or mutual funds will allow for broad base form of investing, for example check out Fidelity global commodity fund,  there are many ETFs and funds that will invest in broad base form like this....

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Own a House or Rent? That is the Question.

Guess I need to speak to a good international tax accountant, but here're some thoughts I had today and perhaps someone here might like to offer some advice/suggestions. These may serve as food for thought for others pondering similar circumstances.

I work, my wife doesn't. I'm on high tax rate and we'd like to make use of her non-taxable allowance. We'd also like to spread the risk of our investments across currencies and countries. This introduces cross-border currency and tax/investment complexity.

We sell our house and, since this is our primary (only) residence, in the UK we pay no capital gains tax on the proceeds. I give half the money to my missus who then invests that money in her name. I invest my half of the money in GBP-denominated investments (PM's or whatever). She invests hers in Euro and another (non-Euro) foreign currency investments. Our investments are then in our respective names spreading the tax burden, and also in different currencies giving us some currency protection. In a year or 2 or 3 we cash-in, buy residential rental properties in the UK and 1 or 2 European countries. This spreads the risk and gives us potential homes abroad should things go pear-shaped.

There is no provision in this suggestion for growing our own food (ie. doing any sort of local farming) and this bothers me somewhat. However, the plan is relatively short-focused (3 years, maybe 5 at a push) and whilst things unfold we might be flexible. If things go Mad-Max then all bets are off anyway, and I don't think it'll get to that.

So some questions for you:

1) Does this make any sense at all, or have I missed something obvious?

2) What's the best way of, for example, converting 100k GBP into Euros? Use a bank? Some FOREX trading house? Are there particular times of year when it's best to do this?

3) If I wanted to hedge against all currencies, if I bought physical bullion I could jump in my car and sell it anywhere in Europe in their respective currency. This potentially gives me a currency advantage. From a VAT and currency perspective can I really/legally go buy physical bullion in 1 country, drive to another and sell it? Or do I have to declare and pay some import duty? In the EU? Really? (Really?)

4) And, following on from 3, if I wanted to sell (or indeed even buy), would I need a bank account or even address in the country in which I buy? For example, I might buy physical in GBP in the UK and sell in EUR in France. Or buy in Germany in EUR and sell in Switzerland for CHF.

5) If I sell investments and have to pay capital gains tax in the UK (18%), is there a good way of deferring that payment to take maximum advantage of inflation such that when I do pay the tax I'm using "cheaper" money? eg. sell for 100K GBP in May and then somehow invest the taxable 18K till April the following year where, due to inflation, the money has grown (inflated) to 20k meaning my tax bill is really 16K.

6) Is it more efficient to setup a UK Limited company, put my money into that and then perform these (or similar) investments that way and then pay myself dividends (take money out) as needed/warranted?

Hopefully the above makes sense. Really appreciate any thoughts/suggestions. Just kicking around ideas here.

 

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Re: OWN A HOUSE OR RENT???? THAT IS THE QUESTION

Look at MLPs like KMP and EDP for energy. They will probably pull back nicely as they have a had a nice run up like commodities. 

A newsletter that I just start subscribing to is mlpprofits.com. 30 day trial.

 

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Have your cake and eat it too!

I think the problem many homeowners are facing is similar to mine. If you are a home owner, your wealth is largely tied up in your homes' equity.  Like a dog wining on a board nail, we know we are in an uncomfortable position, but not enough to get up and move.

We have 3 options which I will explain

1. We can stay put and change the terms of our mortgage into a fixed 25 year loan.  The debt will become cheap to pay off if we enter hyper inflation and or high interest rates.  This is a half solution because the equity value of our house will also drop, not making us any richer.

2. Sell our house and downsize.  This is a great solution, but most people don't want to downsize.  Even if we believe the dollar bubble will burst, at some level we are all in a bit of denial that thing will get much worse and think the market cycle guarantees a rebound around the corner.

3. The third option is to sell our house and rent an equivalent house.  This is a good suggestion, but again, like a dog on a nail board, most people aren't uncomfortable enough to make the effort to pack up and move.

So what do we do?  How can we have our cake and eat it too?  Can this even be done?  The answer is YES!!!

This is what I'm planning to do and I will update my post once it's mission accomplished!  I'm looking to sell my house to a real estate investor who want's a rental income.  Then I will be the one renting it back!  I will even ask to have a 5 year lease to sweeten the pie.  This shouldn't be difficult to do because I have proven to be credit worthy with the bank, faithfully paying my mortgage.  I'm also a responsible home owner.  I think a real estate investor would just love a deal like this.  I'm the perfect long term tennant and the investor won't even need a property manager while I rent.

If gold and silver prices go up just modestly more than real-estate, I will be ahead of the game.  If the dollar collapses and we enter hyper inflation and high interest rates, I will be buying back the house in 5 years for pennies on the dollar.

This is an unorthodox financial maneuver.  I think it's sound.  My friends think I'm nuts and want to dissuade me.  What do you think?

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QcPrepper wrote: If gold and
QcPrepper wrote:

If gold and silver prices go up just modestly more than real-estate, I will be ahead of the game.

The "just modestly" bit suggests that the bull market is still in effect but that the final outcome hasn't happened yet. You may be ahead of the game but only because the game hasn't changed yet.

QcPrepper wrote:

If the dollar collapses and we enter hyper inflation and high interest rates, I will be buying back the house in 5 years for pennies on the dollar.

That's the game changing and hyperinflation may/will include hungry mobs looting whatever they can to get by. Is your house in an area that may be affected by this? If things get bad then will the house still be there? How will you and your family eat if food gets crazy expensive? By selling gold/silver coins? How long till you stand out as one of the few who doesn't look hungry all the time? What if the laws are changed such that your plan is scuppered?

Are you trying to make money or to protect you and your family?

 

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Hi Jumblies My calculations

Hi Jumblies

My calculations are based on some number crunching.  Here is a good Excel sheet you can download to do your own number crunching.  http://www.khanacademy.org/downloads/buyrent.xls.  This video explains the xls spreadsheet

The Khanacademy youtube channel also has a couple of great videos that help mathematically explain when you should rent.vs buy a home.  Every situation is different.  You must look at each situation case by case. What's great with the Excell sheet is that you can play with your assumptions and see how several scenarios will play out.

I am definetly prepared to sell some gold and silver ounce by ounce as the need arises to cover my rent or other living expenses.  If SHTF, my parents have a cottage out of the city.  I stocked it with a 1 year storable food supply, hunting equipment, a seed vault, an abundant supply of energy and back up systems.  I have a bugout bag ready to go if I have to.

I'm trying to protect my family, but there is a real possiblility of making money if the price of gold and silver continues to perform as well as it has been doing.  I realy like Mike Maloneys crash course on gold and silver.  It compliments everything that Chris Martenson teaches, but he just focusses on the gold and silver cycle. 

I feel very prepared at this point, but untill I sell my house and start renting it back, I fear the dollar collapse.  I would be devestated to loose all my savings.  If nothing happens and I just break even with my metals vs. house, It will be worth it for the stress relief.  Not owing the banks anything will also give me a feeling of freedom that I havn't felt in a long time.

I've been researching the idea of rent vs. own a house and gold for a few months now.  What I'm presenting in this forum are just my ideas and some material that helped me come to a decision.  I hope this helps you!

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QcPrepper wrote: I am
QcPrepper wrote:

I am definetly prepared to sell some gold and silver ounce by ounce as the need arises to cover my rent or other living expenses.  If SHTF, my parents have a cottage out of the city.  I stocked it with a 1 year storable food supply, hunting equipment, a seed vault, an abundant supply of energy and back up systems.  I have a bugout bag ready to go if I have to.

Ah, well that suggests you're in pretty good shape and certainly more so than we are. On the one hand I subscribe to the "get out of debt" idea and to that end we sold our house last year and went into a rental. So in that respect I'm inline with your thinking. The money from the house went into PM's (bullionvault) and a little physical. On the other hand we need a place in the country to retreat to if/when "it" hits the fan.

My question about whether your area is safe or not is something I've been worried about an to that end we left NYC and moved to mainland Europe where we can afford more and there is easier access to surrounding countries (we have European passports). I also think where we're based is more culturally able to cope with any system shocks. We're just starting to look for a place in the country but, similar to you, the question is whether to do it with a mortgage (assuming I can get one here) or not. As you say, if we see high inflation my mortgage would be inflated away so the extra PM's I can keep in reserve would pay for it. But this goes against the "get our of debt" idea. Even if I lost my job I have enough savings to pay the house off outright but that's assuming the banking system is still functioning and no extra punitive cross-border movement of capital laws are introduced. I suspect we'll just buy it outright as there's something bugging me about having a mortgage that I can't quite put my finger on. We're fortunate in that we'd still have a good holding of PM's to protect our finances.

By the way, I'm just reading Adam Fergusson's book "When Money Dies". Not far in but it's very interesting and I see many parallels between then (Weimar Republic) and now. It may give you some ideas.

 

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Hi Jumblies, it sounds like

Hi Jumblies, it sounds like you are on the right track!  You made some big decisions to protect yourself as well!  My situation is that I have a lot of money tied up in the equity of my house. When I bought it, I made a 25% down payment. I invested 50K in renovations over the past 5 years and have been aggressively paying down my mortgage.  Luckily real estate is still strong here.  I enjoyed a 30% gain since I bought it.  I will be severely penalized in the event of a downturn. I think I will do much better shifting to gold and silver.

As for buying vs renting a place in the country, I think It depends on the price. Sometimes you can find great deals in the country side. If the price is good I would look at what the minimum down payment is and go for a long term fixed mortgage. I don't know what the 30 year interest rates are in Europe, but in the states it's under 4%. It's ridiculous how cheap the rates are. You really can only loose what you pay into the house. You just don't want to be in a situation where your mortgage goes under water. If you keep a good gold position, don't put much down on the house, have cheap interest rates and make minimum payments, your mortgage will look cheap if we hit hyper inflation and double digit interest rates. A cheap long term fixed mortgage can allow you to pay it off with devalued money over time. The people who invested a lot in their homes and especially those who have variable rate mortgages will get clobbered should interest rates go up. Every situation is different, so it's important to crunch the numbers case by case.

As for my neighbourhood, I live in Montreal which is a safe city and I'm in a suburb 30 minutes away from the downtown. I can walk outside at 3:00 AM. Nobody has prison bars on their windows or gates in front of their doors for security. Many of my neighbours don't even bother locking their doors (it's a Canadian thing). There's an expression "Quebec sait faire" (Quebequers know how do things). We are a resourceful bunch, but who knows how things will turn in a collapse?

I will check out the book "When Money Dies," thanks! I just read the book "Aftershock: Protect Yourself and Profit in the next Global Financial Meltdown." I think the authors are a bit naive in some regards, but their analysis is very good.

QcPrepper's picture
QcPrepper
Status: Member (Offline)
Joined: Feb 18 2012
Posts: 8
House for rent

Hi, just an update with where I'm at. I put my house for sale now with the hope to rent it back from the new owner. I am using an agent who's the wife of a good friend of mine. She never sold a residential house to an investor with the intent of renting it back to the seller. This is uncharted territory for us.

With the Euro debt crisis and other economic news getting worse by the day, I am getting a bit nervous. If I can't find an investor buyer to rent the house back, I may sell it outright and move. I will feel much better when I have converted my house equity into a few monster boxes of silver and a tube of gold bullion. Right now gold and silver prices are attractive and I hope the prices will stay sideways long enough for me to jump in and buy.

Does anyone here have suggestions how to attract investor buyers for a home? Maybe I'm not doing it right. I want the house to be listed in the MLS as a revenue property, but because it's residential, my agent put it in the residential section which isn't attracting the right buyers. I also listed the home on two classified ad sites. Maybe I'm thinking too locally. Maybe there are sites that attract international property investment buyers?

Any thoughts from this community on how to do this unusual transaction will be appreciated.

Thanks!

mryuri's picture
mryuri
Status: Bronze Member (Offline)
Joined: May 12 2011
Posts: 25
To buy or rent

 If you anticipate hyperinflation or even just high inflation, do not expect property prices to go up along with food and energy costs. House price increase will lag other assets. If high food and energy eat into household ependiture, do not expect people to be in any position to purchase not vital products or services including upgrading house or making that first house purchase. Eventually as wages increase to keep up with inflation, then house prices will go up. But they will be one of the last items to increase in value.

So, I would hold off buying, and expect a drop in house prices when inflation causes food and fuel to increase. The increase in the cost of living will force people to put their own house on the market and seek rental properties.

 

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