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?

If you are mortgage free, you now have spare cash each month, so possible options;

1 - downsize & move to a new area
2 - go on lots of holidays
3 - rent out your existing property & buy or rent a camper van, canal boat or an interesting property or go travelling
4 - put all spare cash into pensions
5 - Purchase a but to let property
6 - Put spare cash into peer to peer lending
7 - Put a small amount into stocks & shares & manage it yourself for a year (money you don't mind loosing )

Do research first & contact a financial advisor

Historically the property market has outperformed stocks and shares. You'd also need to be very well informed or advised to manage your portfolio well and think about your tolerance to risk, a diverse portfolio, and decisions about investing long term for growth or also generating income. I've worked with investment advisors professionally for many years and I'd not risk it myself.

@AdmiralCain

I'm often cited as being a tin foil hat loon on here but for the love of god don't the Stock market is maxed, interest rates will increase the house market will crash (No not some return to zero thing where houses cost £5k! as people think I mean) there's going to be a massive correction this year or next. If you must, sell rent and the day the markets crash THEN invest.

If I had a tenner for everyone who's said 'there's going to be a massive correction this year or next' over the past xx number of years, I'd be so rich I'd have no need to invest on the stock market.

I suppose one day, some of will be right if it ever happens, just because so many are saying it all the time LOL. Doesn't seem likely any time soon though, in the current market, where so little seems to be available.

You'd be absolutely bonkers. Moving into rented accommodation would take away so much security. Especially as you near retirement age. What happens if a landlord decides you have to relocate? Do you really fancy having to move at 60/70/80, finding new properties to rent, dealing with packing and unpacking.
There are some fab suggestions on this thread, so I won't offer more but honestly I think selling up and renting would be a huge mistake.

Swapping out the security of a home for investing in the stock market is an astonishingly bad idea.

No, not a good idea.

You could get a referral for a decent financial planner and have a chat. They'd be aware and up to date on types of investments, with the pros and cons. Open universities usually has money management/investment courses online.

This morning, I watched a podcast from the Economist saying that cost of renting and buying are similar when taken over a long period.

This might be true for the 30/40 years or so you are likely to have a mortgage. I got my first one when I was 22 and eventually DH and I were mortgage free by 55. A lot of that time mortgage rates were high (10 to 15%) so we probably did pay as much in mortgage costs as we would have done in rent and we also paid a lot of money in maintaining and improving our homes plus legal fees etc. However we have now been mortgage free for 5 years at a time when renting a similar property (4 bed, detached in commuter belt South London) would cost in excess of £24,000 a year. So that's £125,000 we haven't had to pay out over the last 5 years. Assume we live another 25 years to 85 and we will have 'saved' over 1m in rent. And we now have a capital asset worth about 1m. Not bad when my first flat was bought with a £1000 deposit. We will eventually downsize to a flat and have at least £500k in hand.

But the numbers aren't as important as the security of knowing our home is bought and paid for. That's priceless.

Are you insane???

That is actually mental.

Never bet the farm!

@MrsPelligrinoPetrichor

Just the thought of this is giving me anxiety!

^^ Total madness.

The wisest thing to do is diversify your portfolio. This protects you from crashes in the housing market or the stock market. Interest rates are still very low so in your case I would take some equity out of the house (maybe get a 10year fix) and invest the equity. This way you can hopefully benefit from savings growth but not risk your whole house.

Why not rent out your house and rent somewhere else if you want a bit of flexibility.