Selling to beat slump is a mug's game
Q. You mentioned in last weekend's Herald a friend who is thinking of selling her house and renting, in anticipation of a decline in the house market. I have seen this idea come around the track several times but have never heard of anyone who succeeded at it.
Monday, July 4th 2005, 7:58AM
by The Landlord
If it were such a good idea, you would think there would be plenty of people who could say, "It worked. I sold my house, invested the proceeds and rented a comparable house. After two years, I cashed up and bought a comparable house for 20 per cent less than I sold the old one."After deducting rent from investment earnings and factoring in agents' commission, legal costs, house moving and an allowance for my time, I'm $80,000 better off than I would otherwise have been."
I've never heard anyone tell that story. Have you? If there are no success stories, should the idea be enshrined in the Hall of Financial Myths?
A. Probably. First, let's set the record straight. My friend is planning to sell her house and rent, and may never buy again. She's not trying to time the market.
If she were, though, I would be rather worried. I can think of four reasons most people don't, or shouldn't, try it:
* The hassle of selling, moving, buying and moving again.
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