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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

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

138 replies

Telematics1234 · 10/02/2022 08:05

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?

OP posts:
sunshinesupermum · 10/02/2022 08:34

Crazy idea.

Smidgy · 10/02/2022 08:34

My aunt and uncle told my mum to do this and tried to convince her it was a great idea. We all thought it sounded mad- she was mortgage free and about to retire on a good pension. Why would she want to take a gamble on her future financial security?

Anyway, she ignored their advice (these were people with a long history of disastrous financial decisions).

Don't do it, OP.

Robinfeed · 10/02/2022 08:36

This is just nuts!

BernadetteRostankowskiWolowitz · 10/02/2022 08:37

We are in our late 50s and have paid off our mortgage

Why not redirect the old mortgage monthly amount into stocks and shares? And keep the safety net of your home?

DefaultParent · 10/02/2022 08:38

It's not easy to move as a renter, you will be up against 10 to 20 other people on every house you like. I ended up renting 15 miles from where I wanted to live, and that house took 6 months to find, with £60,000 in the bank. Not to mention renting is so bloody expensive at the minute. And don't forget to factor in moving costs, deposits on each rental ect. I'm so looking forward to owning my own home again in the next couple of months and not having the worry I could be given 2 months notice on my property.

DefaultParent · 10/02/2022 08:45

For reference, I've just had a look at rentals available in my area on rightmove. I pay £745 per month on a property I moved into last year. To rent something similar now I would need to pay £1000 per month.

PenStation · 10/02/2022 08:52

Talk to a financial advisor who can give you proper advice. Randoms on the internet won’t give you a facts based assessment of the potential risks or rewards.

dreamersdown · 10/02/2022 08:54

@TinySaltLick

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

It isn’t an investment decision like any other (stocks or bonds? Passive or active? Etc).

It’s a lifestyle decision, and one which given the challenging circumstances renters face has the potential to make OP’s lifestyle significantly more precarious.

Think of it like this, OP, when you’re managing your risks: you’re 87, you’re still in rented as the market crashed and you weren’t able to catch up with house prices, and your landlord tells you they’re selling the house so you have to start applying around again. Nightmare.

danni0509 · 10/02/2022 08:55

Oh please don’t.

I rent and honestly this post is stressing me out!!!

IamnotSethRogan · 10/02/2022 08:55

This sounds like a terrible idea in my opinion.

If you really want to invest can you not tale out a small remortgage or something?

Imyourvenus · 10/02/2022 08:55

No way

AngelinaFibres · 10/02/2022 08:55

My husband and I are retired. He inherited a lot of money from his late father. We didn't need that money to fund our life so SOME of it is in investments.He is very good at it but....he spends hours reading relevant articles in financial magazines, he listens to podcast after podcast, he tracks the market daily. He takes part in at least one webinar a week from the investment platform he uses.That , and golf, are his thing.He spends hours on it. He has spread the investments around different world markets so lessen the risk. He has been very successful but we have benefited from the bear market of the last few years. That time is ending. We are well off and own a large house outright. If every investment went pear shaped overnight it would not affect our ability to live a lovely life. You would be absolutely mad to sell your house and risk that money. Low risk investments may save your capitol but won't make you any money. Moderate risk are not doing as well as they were and high risk is exactly that. You could lose the lot just as you get to retirement age and you have no house anymore.

Everydaydayisaschoolday · 10/02/2022 08:58

It's a terrible idea unless you like risk and uncertainty. A good friend of mine had a similar notion about 25 years ago. They sold up, rented and invested the money. After 14 years in a beautiful rented property where they were very happy they were given 4 months notice to quit as the landlord was selling the house. By that time a series of bad choices and bad luck meant they had very little of their original investments left. chronic ill health meant they were living on benefits so they found it hard to rent a new place. They ended up sofa surfing in their mid fifties.

They are retired now on a very low income. They currently rent a house at below market rates from one of their children who works overseas but even that isn't 100% secure because one day that child will either return to the U.K. and want to live there themselves or will want to sell it to buy overseas.

My current house is part of my pension plan. At some point in the future I will downsize and use the sale proceeds to supplement my existing pensions. There is no way I would risk that for risky investments in the stock market.

Suretobe · 10/02/2022 09:00

Consider house swapping if you feel you have itchy feet?
I do know someone who has gone what you propose. She’s around your age and seems quite free spirit. But for me, a mortgage free house is security so I would personally never want to do it.

Original poster
Telematics1234 · 10/02/2022 09:02

A unanimous no then!

OP posts:
Waxonwaxoff0 · 10/02/2022 09:02

How will you pay rent when you retire? Do you have fantastic pension pots?

Foxglovers · 10/02/2022 09:03

I’m not even sure if this message is serious?! To be mortgage free is in their own home is most peoples dream?
You could always rent your house out and rent elsewhere if you wanted a change of scene or something?!

Original poster
Telematics1234 · 10/02/2022 09:03

@Waxonwaxoff0

How will you pay rent when you retire? Do you have fantastic pension pots?
We have got good pensions, which we are still adding to.
OP posts:
Arbeity · 10/02/2022 09:03

But what would you be wanting the money for? Surely for most people they want money to buy security in their old age. Having a mortgage free house is a huge part of that security. What would you be giving it up for? A higher number in the bank?!

If you average out house prices over the past few decades, house prices have gone up an average of 6% per year nationwide (obviously doesn'taccount for local markets). That's a very good return, even by stocks and shares standards, unless you go for high risk options or something like crypto. The problem with volatile stock is that when you need the money, you can't make sure it's at a high point, it might be at a low ebb. Then you are scuppered.

Is downsizing an option? That way you get to release some of that investment. If so, talk to a financial advisor about your goals and they may be able to give you some good options and a sensible split across high/med/low risk investment options. But remember, they are just giving advice, make you own mind up and you can always say no and disagree

godmum56 · 10/02/2022 09:04

@AnyFucker

Are you quite well ?
this
Waxonwaxoff0 · 10/02/2022 09:04

Ok, still seems mad to me. I don't know why you'd want to waste your pension on rent if you don't have to.

RitaFires · 10/02/2022 09:04

It sounds like you've never rented or at least not in recent times. I have had one good landlord, she got things fixed immediately and gave me wine as a Christmas present and the furnishings weren't the cheapest thing in the argos catalogue, she gave me a card and a bottle of prosecco when I bought my house and left.

I've had letting agencies repeatedly try to schedule inspections on the one day I told them I'd be in hospital, walk into the house without permission, ring me and berate me for rent being late when I'd actually moved out of that property 6 months earlier, make a mistake on paperwork and then claim they didn't, not repair stuff properly so one winter we had to keep the heating on for days because if you turned it off it wouldn't come back on without bleeding every rad and saying 10 Hail Mary's.

Properties are often damp and the bare minimum is done to mitigate it, that's if you can find one at all. I think you'd be mad to do it.

Original poster
Telematics1234 · 10/02/2022 09:06

@Foxglovers

I’m not even sure if this message is serious?! To be mortgage free is in their own home is most peoples dream? You could always rent your house out and rent elsewhere if you wanted a change of scene or something?!
Being a landlord myself doesn't appeal. Been there and got the T shirt. Found that our investments in stock market we currently have are more lucrative, more liquid and considerably less hassle than when we rented out a property.
OP posts:
Chloemol · 10/02/2022 09:08

You are mad

As others said things go down as well on the stock market. Learn from history, all those who had endowment mortgages and ended up losing

As to renting, round here it’s a £1k plus a month for a two bed property! Could you afford that when no longer working? Could your investing in the stock market support that?

Agar happens if you get a horrible landlord? And why would you want to give them your hard earned money when you had your own home

As I say mad idea

DPotter · 10/02/2022 09:08

haven't read the full thread - but very very bad idea.

I could understand downsizing to release cash to invest in a pension - something with low -moderate risk, but definitely not the general stock market.