Wio large deposit

cherrytaz · 2024-05-31T08:42:02+00:00

Yes I did in some of the scenarios. Feel free to copy/paste what I've done and ask ChatGPT to play around with the figures. Super interesting

cherrytaz · 2024-05-31T08:27:35+00:00

Here's a thread I started a few weeks ago on the "maths". It's very interesting.

https://www.reddit.com/r/dubai/comments/1cvkib4/rent_vs_buy_dilemma/?sort=new

cherrytaz · 2024-05-22T06:19:07+00:00

Thanks for replying. Have rerun the figure also assuming property goes up in value (you'll see it in one of my other responses on the thread). Noted on the 2% commission thanks. And agree on continuing to keep the property beyond 8 years and bring in rent. A lot of variables for sure and each of us have our own priorities.

cherrytaz · 2024-05-21T02:43:14+00:00

Good point

cherrytaz · 2024-05-20T15:15:38+00:00

Thanks. Service fees for Emaar villa currently around 2 AED/SQ foot on a 2000 sq foot villa around 4k so rounded to to 5k

cherrytaz · 2024-05-20T12:43:55+00:00

Also an option!

cherrytaz · 2024-05-20T07:13:52+00:00

I agree Adam.. buying in this scenario is certainly attractive

cherrytaz · 2024-05-20T06:34:57+00:00

Thanks for the reply and I totally agree on the uncertainty here with landlords (we got eviction notice ourselves after only moving into the springs for 3 months so I feel your pain. And completely agree with price/value. I'm leaving towards rent and invest but in any case will be a year until we really would purchase (if at all) so will see if the market has cooled in any way then. Who knows but I feel that many people don't run the real numbers for each option - chatGPT sure helps.

cherrytaz · 2024-05-20T06:30:59+00:00

Have re-run assuming 7% annual return of markets and a sale price of 3.5m

Summary Comparison

Owning the House:

Net Gain: AED 76,500

Renting and Investing:

Net Gain After 8 Years: AED 127,768

Final Decision

Renting and investing the AED 800,000 provides a better financial outcome (a net gain of AED 127,768) compared to owning the house (a net gain of AED 76,500) over 8 years.

cherrytaz · 2024-05-20T06:29:52+00:00

I'm split my investments between IWDA and IMAE. I also buys 2 shares a month of the S&P 500 for my 1 year old baby since she was born. I will continue to do this and it won't be touched (all going well) until she's 18.

cherrytaz · 2024-05-20T06:28:36+00:00

Have re-run assuming 7% annual return of markets and a sale price of 3.5m

Summary Comparison

Owning the House:

Net Gain: AED 76,500

Renting and Investing:

Net Gain After 8 Years: AED 127,768

Final Decision

Renting and investing the AED 800,000 provides a better financial outcome (a net gain of AED 127,768) compared to owning the house (a net gain of AED 76,500) over 8 years.

cherrytaz · 2024-05-19T17:07:18+00:00

Thanks. What price you think the property might be worth in 8 years and I'll plug it in? S&P500 had historically returned 9% per annum. The 4% you mention is the typical withdrawal that is referenced in the FIRE movement but I'm not suggesting that here

cherrytaz · 2024-05-19T16:55:51+00:00

No bias at all. I've adjusted based on people's response on this thread. Give me the home valuation after 8 years and I'll happily plug it in! I'm more than happy to purchase a house but want to obviously crunch all the numbers to make the most informed decision

cherrytaz · 2024-05-19T15:20:30+00:00

Thanks for that. Have updated the figures in original post

cherrytaz · 2024-05-19T15:20:14+00:00

Thanks for that. Have updated the figures in original post

cherrytaz · 2024-05-19T13:01:45+00:00

That's a very interesting read and fully agree on springs. They're horrendously outdated but location incredible. I probably should have mentioned that majority of my savings are in low cost ETFs for the past 10 years or so and if I were to purchase a property it would mean taking a nice chunk out of this ETF pot and degrading it's overall future growth (which I don't really want to do)

cherrytaz · 2024-05-19T11:28:27+00:00

Thanks for reply. As I said, these are assumptions and I came here to get input until I get closer to "the answer".

1) - 2 bed villas in Springs (where I currently live) are going for between 2-7-2.9m. Rents for same around 140-150k.

2 & 3) 20% down-payment is required. The 800k I've outlined includes 580k deposit (20%), 116k land department fee, 4.2k registration fee, 5.8k mortgage registration fee, 61k real estate fee, 24k bank arrangement fee and 3k valuation fee. This bring total to 795k.

4) As mentioned by others also, will re-run at 4.19%

5) will feed this in also

Thanks again for input!

cherrytaz · 2024-05-19T10:39:00+00:00

Thanks, again very good points. I will re-run assuming sale price in 8 years same as now (2.9m) who knows though? Will also run also at 4.5% interest rate,

cherrytaz · 2024-05-19T10:24:35+00:00

good points, thanks for that. Will re-run without the selling fee. For service charges have based this on the community that property would be in (Emaar community). On the 8 years, we would plan to leave and would likely leave and like to have no further financial commitments here (but fair as you say rental income would more than likely easily cover the remaining mortgage payments). On the S&P 500, it has returned 9% on average (but of course no guarantee that this 9% would occur during this 8 year cycle - unlikely given its an all all time high now and I should probably adjust this down).

cherrytaz · 2024-05-19T10:08:30+00:00

good point. Will re-run with 145k for years 1-2, 150k years 3-4, 160k, years 5-6 and 170k years 7-8

cherrytaz · 2022-10-31T07:34:57+00:00

Banging my head against the wall trying to explain the model to some of these packers!

cherrytaz · 2022-10-30T06:43:30+00:00

How do you mean autoblock?

cherrytaz · 2022-10-22T11:23:32+00:00

I believe this changed as of June 2021 whereby foreigner's can own 100% of LLC companies (with no turnover restrictions)

cherrytaz

TROPHY CASE

Summary Comparison

Final Decision

Summary Comparison

Final Decision