AIBU to ask if it would be a good idea to sell house and rent instead

[Telematics1234]

I have got this idea we could sell the house and put proceeds of house sale in the stock market.

We are in our late 50s and have paid off our mortgage. We are both still working. The idea of selling up and investing the capital in the stock market is appealing.

We are both still working, so have wages coming in to cover everyday expenses and rent.

I like the idea of the flexibility of renting. ie we could move house much more easily.

It seems to me that the stock market probably out performs the housing market for the most part.

Has anyone done this?

You'd be mad. Yes the stock market can out perform property, but it can also crash. You have somewhere to live. If you want to speculate then downsize and invest the extra, but do not put all your eggs into one basket.

Do you have any idea how much rent in your local area costs? I can guarantee it will be more than mortgage repayments. What will you both do in 15 or 20 years when neither of you are working? Will your pensions be enough to cover living expenses?

I think a more sensible idea would be to downsize if you can. So sell your current property, buy another one outright and invest what's left over

Imagine being beholden to a land lord as you're in your 60s and 70s, not appealing.
Downsize and pkay the stockmarket with your spare money if it appeals.

Just the thought of this is giving me anxiety!

Ludicrous idea. You could easily lose a lot of money. Tenancies are insecure, you can generally be evicted at a few months notice if the landlord decides they don't fancy being a landlord anymore.

Tell whoever had idea to talk to a financial adviser about it

Do you have pensions? Stock market is usually a longterm bet over at least 5 years, as you could have a major drop due to fluctuations.

I can't believe anyone would choose to give up the security of a home for the insecurity of renting. Have you ever rented, it's not an attractive option in the UK due to lack of renters rights.

I’d never do it. At least put some of it into a smaller property.

I have known of people doing this years ago, confident that property prices were going to crash. Instead they’ve done the opposite, and rents have soared, too.

What happens when you have to pay rent on a crap pension?

But any returns you made would surely be lost in rent? Why not put the equivalent rent into the stock exchange?

Renting is horrendous at the moment anyway.

That sounds really risky. Maybe fun for now but what about when you're 70 or 80? And you might get flexibility to move but do you not want to decorate your home the way you want it?

Bat.shit.crazy.

If you want to invest in something, sell the house and buy a few cheaper houses and rent them out.

Don't take mad risks.

If I was your partner I'd be worried you had a brain tumour suggesting that shit. Or were having a midlife crisis. Maybe see your gp.

Good grief, no. Professional brokers with decades of experience sometimes call it wrong. It’s generally not their money, though.

Only do it if you’re potentially prepared to lose everything.

That you are even considering this makes me think that you do not have the financial acumen to understand the stock market.
Do not risk the roof over your head. Renting is expensive and insecure. Why do you think people want to get on the housing ladder.
Downsize to release some equity if you can and want to but remember stock markets can go down as well as up.

It's not as easy as that. We're currently renting after selling our house (trying to buy in new area) and renting is far from flexible. There's very limited availability of certain types of housing (if you want a flat you'll probably be fine!), landlords are asking for minimum tenancies of 12 months without a break clause so not much flexibility there, although it will improve after a year! It's very restrictive - we can't put up pictures, or even stick blu-tack up! And it's costing far far more than our mortgage did. You have to go thru very intrusive affordability checks to check you can afford the rent, have regular house inspections and our landlord has been quite slow about getting things done. Despite all the checks we had to go thru, the letting agent didn't check the house so we arrived to find oven didn't work - took 3 weeks to get that fixed (you have no control over the timeframe or who does the work). It took several weeks to mend the broken garage door, during which time we couldn't access the garage.

Meanwhile the house we sold had almost doubled in value in 12 years.

There's also a danger if you go into rented long term of pricing yourself out of the housing market.

@GETTINGLIKEMYMOTHER

I’d never do it. At least put some of it into a smaller property.

I have known of people doing this years ago, confident that property prices were going to crash. Instead they’ve done the opposite, and rents have soared, too.

Actually I’ve known people who’ve done this too and they now feel that they are ‘stuck’ renting and won’t be able to get onto the property ladder again. It’s a massive gamble.

Are you quite well ?

Yes I agree - gone are the days where a house is a guaranteed investment. Two bedroom houses in the Midlands selling for £450k… The bubble will burst again very soon! Sell up whilst prices are high, and enjoy your investments in stocks.

In a few years when you have retired most landlords wont even consider you as you wont have a high enough income. They wont accept possible income from shares. Plus you could have to move on at any time whenever landlord gives you notice. A totally insane idea especially for retirement.

@LlamaLucy

Yes I agree - gone are the days where a house is a guaranteed investment. Two bedroom houses in the Midlands selling for £450k… The bubble will burst again very soon! Sell up whilst prices are high, and enjoy your investments in stocks.

Never become a financial adviser.

OP this is an insane idea

Madness. Moving every 6-12 months gets old very very fast. I moved 4 times in 5 years before finally getting into a house that wasn't full of hidden nasties, damp painted over for viewings, dodgy electrics etc. Then my landlady sold the house as soon as the covid boom started.

Downsize if you must and put the difference in stocks.

It isn't quite a crazy as people are suggesting here, it's an investment decision like any other.

However, you would need your investments to effectively outperform housing, plus enough profit to cover the additional rent cost, stamp duty, fees on withdrawing - to even break even, which becomes less likely. Also the stock market goes up and down - you need to consider what happens if your health deteriorates unexpectantly and you can't withdraw without major losses if the market is down - eg you can't wait 5 years for it to return to value (whilst your house would quite robustly maintain its value)

To be honest this is something which you might want to do earlier in life when you hsvr thr opportunity to rebuild your wealth if it goes wrong rather than die destitute

Investments are exciting until the market starts going down, then they are a continuous source of anxiety unless you have money to burn

as others have mentioned - stockmarkets crash as well as rise (I know housing markets fluctuate, but not to the same extent), rent out of a pension could be painful...
and have you not seen the threads on here where people have to move on at short notice because the landlord has decided to sell? that may be a bit more flexible than you'd like.

That would be madness - invest the potential rent payments instead