for those in the UK still questioning investing in real estate(bad news)

[franky1]

ok so i done some math

i done some mortgage calculators of a £100k property from 2003 to 2023(20year mortgage 6%) and also checked the average house price increase over 20 years to calculate how much a sell value for a 2003 £100k house would be today

well a £100k house mortgage ends up needing £168k of money handed over($68k interest), over 20years
the £100k in 2003 house would resell for £195k this year

leaving a £27k profit which after paying in £168k means only 16%profit over 20 years or 0.8% a year

now for inflation
2003 £168k = 840k walmart baked beans (20p each)
2023 £195k = 696k walmart baked beans (28p each)

if someone bought baked beans instead of a house in 2003 they would have bought more beans than they would if they bought a house, sold a house in 2023 and then bought beans

so yes real estate is a bad investment over the last 20 years it didnt hedge inflation

[1715062787]

1715062787

[1715062787]

1715062787

[1715062787]

1715062787

[Fortify]

ok so i done some math

i done some mortgage calculators of a £100k property from 2003 to 2023(20year mortgage 6%) and also checked the average house price increase over 20 years to calculate how much a sell value for a 2003 £100k house would be today

well a £100k house mortgage ends up needing £168k of money handed over($68k interest), over 20years
the £100k in 2003 house would resell for £195k this year

leaving a £27k profit which after paying in £168k means only 16%profit over 20 years or 0.8% a year

now for inflation
2003 £168k = 840k walmart baked beans (20p each)
2023 £195k = 696k walmart baked beans (28p each)

if someone bought baked beans instead of a house in 2003 they would have bought more beans than they would if they bought a house, sold a house in 2023 and then bought beans

so yes real estate is a bad investment over the last 20 years it didnt hedge inflation

You're missing big parts of the picture. Firstly a couple years ago, and going back to around 2010, interest rates were rock bottom - around 2% for a long time. Which means your 6% mortgage figure is entirely worthless. Secondly, a house is not just an asset like gold that you buy and sit on hoping to flip for a profit. It is a home, it is a place of safety and rest, protection from the elements and a necessity of everyone. If you're not paying off your own mortgage to LIVE somewhere which is an essential fact of life, then you are renting and indirectly paying off someone elses mortgage. If you rented a property instead you have nothing to show at the end of it all. Property has gone up 10%+ some of those years, but the market fluctuates, there are some bigger winners than others but property absolutely is a solid investment - it doesn't need to be a gold mine.

[franky1]

many things have been missed out
like the situation people get houses when relatives pass away and its inherited down for free
like getting house on the most perfect year where houses are the lowest interest of 100 of data (your 2% narrowcase)
like someone avoids mortgage entirely and pays full cash
like you rent it out to others for a bit to cash in some income
like a famous person buys it at 'F-u money' amounts above comps

i can mention a myriad of many narrow use cases of best performance

but do you know whats also missed out
stamp duty
legel fees
surveyors costs
mortgage required buildings insurance
ongoing repairs
when interest rates were higher then 6%
where people pay interest only for a bit then have to catch up
squatters trash the house

i can mention a myriad of many narrow use cases of worse performance

the thing is compared to other investments that have done better in days sometimes to years real estate done.. people really need to get a calculator out and not just full utopian best case stories out of their head

[panganib999]

A good reconstruction of the housing market but what you fail to include in this is the interference of banks and their fucking interest rates. Few years ago as what some people have pointed out already, interest rates were at the floor and so buying houses are so much more appealing, affordable, and feasible. Years forward we see the market crashing, inflation playing its part, and several other shenanigans that made it even harder to buy a house, which makes buying real estate/selling real estate a practically-viable passive income setting.

If you still can’t believe this and are willing to really die on the hill of “real estate not profitable”, then perhaps I could introduce you to the world of renting out your property.