ISAs vs Property

[jobhunter7]

Which is a better investment financially? And that's property to live in not to let out...

You need somewhere to live, so a property to live in will always be better if the alternative is paying rent.

ISAs for sure. My investments have grown significantly more than the value of my houses over the same period.

But unless you're living somewhere for free, dogs, you need to balance in the cost of rent.

I'm a massive champion of equity investment, but put a roof on your head first!

In my case if you consider interest paid. I would have been better off if I rented and invested all my disposable income.

If you are so focused on housing then what I am saying is that I would have been able to buy a house a lot quicker had I invested everything in ISAs.

It will vary on what isa and what property and your circumstances. If you can buy somewhere you could live for say 10 years without needing to move as it will work for your needs for that long I would go with property.

If say there's a chance you'ld need to sell after 2 years as you might relocate, it won't be big enough as you might have a child there can be quite a lot of costs involved (and stress) in buying and selling so I wouldn't bother buying for that short a timescale.

Also does the area you would be buying for have prices rising over last 10 years or so or has it been volatile though the future can differ from the past and say if there's more working from home valuations between areas and houses could change with more value on gardens and near countryside than before. But you also need to thoroughly research a property looking at how it is valued compared to others and make sure you aren't overpaying.

I would go for property if you have stable circumstances.

For me property has exceeded returns in ISAs but I had property in London and also got property which was very good value, I worked out I had a cagr of 8.9% a year for 25 years and obviously no tax on that on property but most people have much less. ISA performance also can vary a lot and you need to watch the charges as well as performance.

"For me property has exceeded returns in ISAs"

By much?

Depends if you already own your house, are looking at buying bigger or if you are renting.

If your renting I'd invest in property.

Buying bigger depends in time scales and remember that you loose money on lawyers and stamp duty buying and selling.
Also bigger house has bigger maintenance costs

Am renting at the moment, but I've calculated my bills would be much the same if I bought a place...

I've got various ones and they are in pensions rather than isas but over same time period the ones linked to FTSE All-share after taking off the charge grew about 2.4% per annum so much lower. But it'll vary with what you've invested in, time period, charges etc. I put in pension rather than ISA as then you get tax back so if you are a basic rate taxpayer you get the 20% back. But then you have no access to the money until you are retirement age so if your using for a deposit not suitable.

If you don't have one already a LISA (lifetime isa) could be good for you before you buy for up to £4k a year, its for people under 40 saving for first home and government adds 25% to it up to the £4k per annum.

www.moneysavingexpert.com/savings/lifetime-isas/

It normally costs a bit more to own than to rent as you have buildings insurance and also repair work to do, - buildings insurance varies by house, maybe £200 and then its things like if you get a leak and need to call a plumber, boiler servicing.

i'm over 40

@jobhunter7

Am renting at the moment, but I've calculated my bills would be much the same if I bought a place...

In that case I'd out your money into property without a doubt.

Remember then when you hit retirement you don't have rent to pay. Or the worries of landlords not fixing stuff etc it puts you in control.

Also your mortgage payments will stay the same (varying for interest) where rent will go up.

I wouldn't do one or the other, I would do both.

ISA is liquid, you can cash it in within about a week.
Property is illiquid, it takes time to sell.