"How I saved a house deposit cycling to work"

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Aushiker
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"How I saved a house deposit cycling to work"

Postby Aushiker » Thu Nov 14, 2013 10:29 am

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An lighter look at the advantages of cycling to work ... getting into debt :)

According to official figures the country’s average house price is now just over £150,000 (£153,102 to be precise), and thanks to Help To Buy, 95% mortgages are back in fashion.

That means the average prospective buyer now has to scrape up just £8,635 by way of a deposit before they can get their feet on the housing ladder.

In the last four years alone, cycling to work has comfortably earned me that deposit, and in this article I’m going to demonstrate it with my real costs and savings.


More from Dave at http://mccraw.co.uk/saved-house-deposit-cycling-work/

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Re: "How I saved a house deposit cycling to work"

Postby AUbicycles » Thu Nov 14, 2013 12:27 pm

Although the Australian government says that each bike trip saves the economy $28 - a cyclists who saves the cost of a car, rego, insurance(s), petrol, inspections and repair will have to be unreliant on the car for quite a long time to save the deposite needed to purchase a house in Australia.

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Re: "How I saved a house deposit cycling to work"

Postby djw47 » Thu Nov 14, 2013 1:20 pm

But in the time it takes to save up that 8k, house prices will no doubt have gone up further and that 8k would be more like 12k. And good luck finding a house for GBP150k in Australia.
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Re: "How I saved a house deposit cycling to work"

Postby djw47 » Thu Nov 14, 2013 1:23 pm

Not to mention that being a bike owner, you'd quickly spend 10k of the 8k saved on upgrades and parts!
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Re: "How I saved a house deposit cycling to work"

Postby ColinOldnCranky » Thu Nov 14, 2013 1:43 pm

Cyclists tend to cut out the smokes too. Add those if relevant too.

Though djw47 makes a strong coutnerpoint. :mrgreen:
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Re: "How I saved a house deposit cycling to work"

Postby jasonc » Thu Nov 14, 2013 2:37 pm

djw47 wrote:Not to mention that being a bike owner, you'd quickly spend 10k of the 8k saved on upgrades and parts!

agreed
I'm still around -$500 for the year vs public transport.
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Re: "How I saved a house deposit cycling to work"

Postby skull » Thu Nov 14, 2013 2:39 pm

djw47 wrote:Not to mention that being a bike owner, you'd quickly spend 10k of the 8k saved on upgrades and parts!


Or you end up with 5 different bikes

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"How I saved a house deposit cycling to work"

Postby RonK » Thu Nov 14, 2013 4:29 pm

djw47 wrote:Not to mention that being a bike owner, you'd quickly spend 10k of the 8k saved on upgrades and parts!

I guess that depends whether you want a really want a house or a bike.
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Re:

Postby jasonc » Thu Nov 14, 2013 4:36 pm

RonK wrote:
djw47 wrote:Not to mention that being a bike owner, you'd quickly spend 10k of the 8k saved on upgrades and parts!

I guess that depends whether you want a really want a house or a bike.


my wife answers that for me regularly
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Re: Re:

Postby human909 » Thu Nov 14, 2013 4:44 pm

jasonc wrote:my wife answers that for me regularly


Well as long as it hasn't come to the wife or the bike! :wink: :wink:

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Re: Re:

Postby jasonc » Thu Nov 14, 2013 4:45 pm

human909 wrote:
jasonc wrote:my wife answers that for me regularly


Well as long as it hasn't come to the wife or the bike! :wink: :wink:


Mrs JasonC is an accountant. I have endorsement to buy a replacement commuter yet no funds have been allocated through the usual capex request.....
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Re: Re:

Postby RonK » Thu Nov 14, 2013 5:04 pm

jasonc wrote:
human909 wrote:
jasonc wrote:my wife answers that for me regularly


Well as long as it hasn't come to the wife or the bike! :wink: :wink:


Mrs JasonC is an accountant. I have endorsement to buy a replacement commuter yet no funds have been allocated through the usual capex request.....

No doubt an exhaustive cost/benefit and ROI analysis will be required.

BTW, my (ex) wife was also an accountant. When we bought out first house we lived on sausages or rissoles and mash and saved the 10% deposit and fees while the house was being constructed - about 20 weeks as I recall.
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Re: "How I saved a house deposit cycling to work"

Postby queequeg » Fri Nov 15, 2013 9:24 am

I wasn't cycling again until 5 years after I bought my first house. In my case I was renting on my own. I used to fly light aircraft (aerobatics) every weekend, and I gave that up, saving $200 a week. I saved every spare dollar I could and ended up with $58k in 2 years.
The housing market went crazy after 2000. The townhouse that I rented had just sold for $280k when I moved in. When I moved out 3 years later it had a market value close to $400k.
I bought a townhouse just down the road for $395k. My parents loaned me $20k interest free to pay the stamp duty & legal fees so that I could buy then rather than wait another year.
I repaid my parents in 1 year, and when I sold the townhouse in 2011 I had reduced the original $335k mortgage to $165k. I sold the townhouse for a break even price of $550k (after interest & stamp duty), and that gave me a $385k pool of funds to use on my new house.
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Re:

Postby JohnJoyner » Fri Nov 15, 2013 9:49 am

queequeg wrote:I wasn't cycling again until 5 years after I bought my first house. In my case I was renting on my own. I used to fly light aircraft (aerobatics) every weekend, and I gave that up, saving $200 a week. I saved every spare dollar I could and ended up with $58k in 2 years.
The housing market went crazy after 2000. The townhouse that I rented had just sold for $280k when I moved in. When I moved out 3 years later it had a market value close to $400k.
I bought a townhouse just down the road for $395k. My parents loaned me $20k interest free to pay the stamp duty & legal fees so that I could buy then rather than wait another year.
I repaid my parents in 1 year, and when I sold the townhouse in 2011 I had reduced the original $335k mortgage to $165k. I sold the townhouse for a break even price of $550k (after interest & stamp duty), and that gave me a $385k pool of funds to use on my new house.


That's just showing off... :lol:
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Re: "How I saved a house deposit cycling to work"

Postby queequeg » Fri Nov 15, 2013 10:24 am

JohnJoyner wrote:
queequeg wrote:I bought a townhouse just down the road for $395k. My parents loaned me $20k interest free to pay the stamp duty & legal fees so that I could buy then rather than wait another year.
I repaid my parents in 1 year, and when I sold the townhouse in 2011 I had reduced the original $335k mortgage to $165k. I sold the townhouse for a break even price of $550k (after interest & stamp duty), and that gave me a $385k pool of funds to use on my new house.


That's just showing off... :lol:


I think a lot of it is also luck. Mind you, when I paid $395k at the peak of the boom, people said I was crazy and that there would be a big price crash. That clearly didn't happen, and when I bought my current house it was during a market slump (so I sold during a slump), and the house had passed in at auction with no serious buyers and an owner who was already committed elsewhere.
Now in my street, houses are lasting 7 days on the market and selling before auction.

The main trick is to get your foot in the door with what you can afford, then move up as you build equity. Pay every dollar you can into the mortgage and get rid of it as fast as possible.
My house is my only debt, and I aim to own that outright within 10 years.
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Re: "How I saved a house deposit cycling to work"

Postby RonK » Fri Nov 15, 2013 10:28 am

JohnJoyner wrote:
queequeg wrote:I wasn't cycling again until 5 years after I bought my first house. In my case I was renting on my own. I used to fly light aircraft (aerobatics) every weekend, and I gave that up, saving $200 a week. I saved every spare dollar I could and ended up with $58k in 2 years.
The housing market went crazy after 2000. The townhouse that I rented had just sold for $280k when I moved in. When I moved out 3 years later it had a market value close to $400k.
I bought a townhouse just down the road for $395k. My parents loaned me $20k interest free to pay the stamp duty & legal fees so that I could buy then rather than wait another year.
I repaid my parents in 1 year, and when I sold the townhouse in 2011 I had reduced the original $335k mortgage to $165k. I sold the townhouse for a break even price of $550k (after interest & stamp duty), and that gave me a $385k pool of funds to use on my new house.


That's just showing off... :lol:

No - most homeowners have had a similar experience - that's showing why you should be prepared to make a commitment and sacrifices to get into the housing market, rather than moaning about housing affordability and looking for a handout.

So maybe you have to ride an old clunker for a few years.
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Re: "How I saved a house deposit cycling to work"

Postby eeksll » Fri Nov 15, 2013 10:41 am

^ well you want the majority of people to be spend-thrifts that maximises the value in those who save.

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Re: How I saved a house deposit cycling to work

Postby AUbicycles » Fri Nov 15, 2013 11:32 am

queequeg wrote:The main trick is to get your foot in the door with what you can afford, then move up as you build equity. Pay every dollar you can into the mortgage and get rid of it as fast as possible.
My house is my only debt, and I aim to own that outright within 10 years.



A house debt is a good debt to have (unless you actually don't need a loan to buy a house). Certainly does put cycling expenditure in perspective.

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Re:

Postby JohnJoyner » Fri Nov 15, 2013 11:41 am

RonK wrote:
JohnJoyner wrote:
queequeg wrote:I wasn't cycling again until 5 years after I bought my first house. In my case I was renting on my own. I used to fly light aircraft (aerobatics) every weekend, and I gave that up, saving $200 a week. I saved every spare dollar I could and ended up with $58k in 2 years.
The housing market went crazy after 2000. The townhouse that I rented had just sold for $280k when I moved in. When I moved out 3 years later it had a market value close to $400k.
I bought a townhouse just down the road for $395k. My parents loaned me $20k interest free to pay the stamp duty & legal fees so that I could buy then rather than wait another year.
I repaid my parents in 1 year, and when I sold the townhouse in 2011 I had reduced the original $335k mortgage to $165k. I sold the townhouse for a break even price of $550k (after interest & stamp duty), and that gave me a $385k pool of funds to use on my new house.


That's just showing off... :lol:

No - most homeowners have had a similar experience - that's showing why you should be prepared to make a commitment and sacrifices to get into the housing market, rather than moaning about housing affordability and looking for a handout.

So maybe you have to ride an old clunker for a few years.


FWIW I have been a home owner, had to sell it due to divorce. I have chosen not to get back into the housing market & set aside the money for my daughter, for when she becomes an adult. To giver her a kick start in life.
I didn't see any moaning or requesting of handouts in my comment.
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Re: "How I saved a house deposit cycling to work"

Postby bychosis » Fri Nov 15, 2013 11:51 am

Before I started cycling to work I rode occasionally on my bike from many moons ago. After I started riding to work I re-found the enjoyment in riding and started doing more recreationally, leading to upgraditis. I did save some money cycle commuting for a while, but I think that has been well and truly offset by the upgrades to the what is now a fleet. It still saves some money in fuel though.
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Re: "How I saved a house deposit cycling to work"

Postby queequeg » Fri Nov 15, 2013 12:57 pm

AUbicycles wrote:
queequeg wrote:The main trick is to get your foot in the door with what you can afford, then move up as you build equity. Pay every dollar you can into the mortgage and get rid of it as fast as possible.
My house is my only debt, and I aim to own that outright within 10 years.



A house debt is a good debt to have (unless you actually don't need a loan to buy a house). Certainly does put cycling expenditure in perspective.


Actually, a debt on an owner occupied is a bad debt to have because it is not tax deductible and produces no income. You only need to take one look at a compound interest graph of a typical 30 year loan to see why the bank would prefer you take the whole 30 years.
The figures don't lie.
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Re: "How I saved a house deposit cycling to work"

Postby lobstermash » Fri Nov 15, 2013 1:09 pm

It depends on what you consider a house to be. If it's an investment, then you should rent it out and rent another house off someone else to live in. However, owner occupied houses are not investments, they are consumer products. Personally, I'm still enjoying the freedom of living in my own house (bought it 5 years ago) after 10 years of renting...
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"How I saved a house deposit cycling to work"

Postby RonK » Fri Nov 15, 2013 2:02 pm

Nah, not intended for you John - except to say that it's not showing off. Queequegs story is pretty similar to what many who made the commitment have experienced. It's for those who want to have the latest gadgets, cars, holidays and entertainment etc. and then complain they can't save a deposit for a house.

These types were moaning when I bought my first house and there are plenty around now.

And it seems, a modest first home is no longer good enough, only a McMansion will do.
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Re: "How I saved a house deposit cycling to work"

Postby skull » Fri Nov 15, 2013 4:04 pm

A house debt is a good debt to have (unless you actually don't need a loan to buy a house). Certainly does put cycling expenditure in perspective.


Agree with my last place I put so much into the loan and when we sold had a nice chunk. Since then have been renting thinking I would invest the difference. I need to buy another home to start saving again.

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Re:

Postby JohnJoyner » Fri Nov 15, 2013 4:39 pm

RonK wrote:Nah, not intended for you John - except to say that it's not showing off. Queequegs story is pretty similar to what many who made the commitment have experienced. It's for those who want to have the latest gadgets, cars, holidays and entertainment etc. and then complain they can't save a deposit for a house.

These types were moaning when I bought my first house and there are plenty around now.

And it seems, a modest first home is no longer good enough, only a McMansion will do.


No worries RonK...
I do agree with your comments though. Especially the McMansion.
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