FIRE v London

Right now I am extremely focused on my investment portfolio in an unusual way: I am using it to fund a house purchase.

In my last post I laid out the timetable I need to hit to complete the purchase.  In the last few days I’ve made good progress, but don’t have quite as much money in the bank account to show for it as I had wanted.

I’ve actually pressed Sell on most of what I need to at this point.  However what I’m tracking is getting the funds into a bank account that I can instantly wire it over to my lawyer from.  On this measure a lot of my funds are not in the right place yet.

Moreover, I’m selling more of my portfolio than I need to buy the house.  This is because I’m also moving some funds into different accounts, so that I can then borrow against them.  I’ve tested this with one of my two marginable accounts and it worked surprisingly easily. What I still need to verify is the amount I can take and the tolerances.

Continue reading “Housing, pt 7: racing against the clock” →

Somewhat unexpectedly, I’ve bought a Dream Home.  I’ve managed to do this without selling my Former Dream Home.  My intention has been to sell the Former Dream Home shortly after moving, but a recent comment on my blog has had me considering my options.  Is selling really the right strategy or should I rent it out instead?

Thanks for sharing your 2016 goals. I don’t think that selling a house to pay out your mortgage will be good idea (in my point of view), better to rent the house and with that to pay the mortgage.

Happy new year

Sharon – Divorcedff

Thank you, @Divorcedff, for your suggestion.

My initial position was that I don’t fancy turning the Former Dream Home into a rental property, for three reasons:

1. It would leave me too exposed to premium London property. I would have over half my net worth in London property, and that is too high for me
2. Property is a hassle. I view property as very unscaleable, expensive, illiquid, frustrating and stressful to manage. Compared for instance to owning a Vanguard ETF.
3. Rental yields are too low. I consider a 4% rental yield, pre costs, to be pretty good. For high priced London properties yields are generally lower. And this is before costs, which are significant and unpredictable. In fairness, a typical equity ETF would also have yields of perhaps 3%, but with no costs.

Continue reading “Housing, pt 6: to sell or to rent?” →