The "requirement" to buy property

[Neuromancer]

@Taiwan_for_Life

This thread has come a long way and been skewed towards the financial minutiae about the pros and cons of owning a house and how to do it.

True, very true

[bluejasn]

@Neuromancer

Sounds like we’re talking in circles or focusing on different aspects of paying down a mortgage

But just to make things simple, the traditional 30yr fixed mortgage in the US refers to how long they will guarantee the interest rate. You can shave a couple percent off that if you’re willing to live with a shorter guarantee, like 5 years. And if you move every 4 years, then, there’s really not point in paying extra for that additional 26 year guaranteed interest rate lock

In Asia, what I’ve found is that they typically set the amortization life time of the loan (20, 30, 40 years, whatever) based on how old you are relative to official retirement age. So an older dude like me might only be able to get 15-20 years to spread out the payment while a younger person might be able to get as much as 40 years to spread everything out

Yea its fine this is not what the OP wanted

[Neuromancer]

Ok, so back on track to the original OP

I interpret this in a few different ways:

1. If you’re male, then no woman will consider you as potential mate unless you own property

2. Older Taiwanese have this absurd obsession with property just like the game of Monopoly. I think they’re stupid. There are much better ways to make money

3. Younger Taiwanese just listen to their parents and can’t think critically and realize that this is wrong

EDIT: Ok, so I actually do believe that there is some “emotional” value in owning property. It means that nobody can push you around. I’ve actually left Taiwan but I bought a relatively inexpensive place out in Keelung cause it’s place that I can call “home” for when I come back (my wife is Taiwanese and we will have to go back) and leave my stuff… this is something entirely independent of proper financial planning

[Incubus]

@Neuromancer

I’ve actually left Taiwan but I bought a relatively inexpensive place out in Keelung . . . for when I come back . . . and leave my stuff…

You bought property in the wettest place on the island to leave your stuff at?

[Marco]

@Neuromancer

@Marco

Yea well… 20-30 years is the most affordable option on monthly payments.

30yr fixed refers to the time that the interest rate is locked in. A 5yr ARM would be a lower rate but only guarantees the rate for 5yrs but the term is still 30yrs

I’d just be happy to get one. Picking and choosing seems to be off the menu for us here in Taiwan.

[Neuromancer]

@Incubus

You bought property in the wettest place on the island to leave your stuff at?

LOL, hopefully it will be ok when I get back next summer. Wife has friends in Keelung to look after things though

Would be even nicer if this whole quarantine/virus thing would be over by then as well, but I suspect that is wishful thinking

EDIT: My US home is the Seattle area (PNW) so I really don’t mind rain that much. Keelung is great in the summer. Tons of outdoorsy stuff to do and MUCH cooler than Taipei (which is a basin collecting tons of heat). Summer in Taipei is worse than HK, SG for what its worth IMO

[Takasan]

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[OysterOmelet]

@RBE

A “good” cap rate is generally considered to be a 8-12%, although there are a number of factors and it could reasonably go a bit lower.

But a 2-3% cap rate? That’s a joke.

What???

[OysterOmelet]

@Neuromancer

@bluejasn

I believe a fixed 30/yr mortgage does not exist anywhere outside the US.

I had a 30yr fixed for my first property purchase because that was what everyone said you should do (and I didn’t know any better at the time)

…but how many people actually live in the same house for 50 yrs? I suppose it’s not a small number (and probably higher in Taiwan than US?). But my record is 4 yrs.

Maybe tt might make sense now with US mortgage rates so low

Just rent it out when you move away.

[Taiwan_Luthiers]

thing is a lot of Taiwanese thinks you can buy a house and in about 10 years it will have doubled in value. But I don’t know what would cause this kind of growth. So that meant you’d sell in 10 years.

[OysterOmelet]

It’s expensive to rent.

It’s more expensive to buy.

Salaries are low.

Something’s gotta give.

Zoning laws?

[volv1992]

@Neuromancer

interpret this in a few different ways:

1. If you’re male, then no woman will consider you as potential mate unless you own property
2. Older Taiwanese have this absurd obsession with property just like the game of Monopoly. I think they’re stupid. There are much better ways to make money
3. Younger Taiwanese just listen to their parents and can’t think critically and realize that this is wrong

I agree, but I have no interest in the opinions of anyone who follows those three mindsets. It’s materialism and i’m not that type of person. I’m in the UK and would buy UK but the sentiment is the same.

Have decided just to stick with renting, i’ve moved once a year for the last six years for various reasons. Mostly cos I hated the place one way or another. I feel that i have greater opportunities and flexibility when I can take a chance, throw all my worldy possessions away, and walk away wielding both middle fingers at short notice.

Many aren’t like that and that’s fine but I don’t value ‘stability’ very much

Thanks for your considered response

[OysterOmelet]

@Neuromancer

2. Older Taiwanese have this absurd obsession with property just like the game of Monopoly. I think they’re stupid. There are much better ways to make money

3. Younger Taiwanese just listen to their parents and can’t think critically and realize that this is wrong

What financial adviser in the U.S. tells you real estate isn’t the best financial investment?

Also, housing drives all the wealth inequality in developed countries.

Rognlie subtracts depreciation in seven large developed economies (the United States, Japan, Germany, France, the UK, Italy, and Canada) to get net capital income, and finds that the only long-term rise in capital’s share of income is in housing.
https://www.brookings.edu/bpea-articles/deciphering-the-fall-and-rise-in-the-net-capital-share/

[Taiwan_for_Life]

Curious as to how old the OP is.

[volv1992]

@Taiwan_for_Life

Curious as to how old the OP is.

It changes every year and I can’t keep up. Early 30s

@Taiwan_for_Life

The original post seemed to be more about whether or not to conform to societal pressure, which makes owning a house the desired norm, and the psychologist benefits or drawbacks of owning or not owning a house etc.

Yup, but then suddenly China was apparently invading…

I’ve decided to keep renting anyway, I can’t see any situation where I’d feel better with all my money in some crappily-made place that I never want to be anyway (dislike being inside other than for sleeping)

[nz]

@bluejasn

I believe a fixed 30/yr mortgage does not exist anywhere outside the US.

The only people I’ve ever heard said that are “The Minimalists” in their “all debt is bad debt and you should never take on any debt because debt bad” rants. I know people here in TW with everything from 20 to 50 year mortgages. Most of them are paying the same or more monthly as I do (a renter), after mommy and daddy put 30% down for them. You can negotiate to any length you want in order to get an “ideal” monthly payment, but you might be dead before your mortgage is paid off.

[RBE]

@nz

You can negotiate to any length you want in order to get an “ideal” monthly payment, but you might be dead before your mortgage is paid off.

A bit like cars in the US then. Truth is that few people in the US actually buy a car; most buy a monthly payment. This is by design. The salespeople focus the conversation on financing and monthly payments, not the actual cost of the car.

Want that fancy new truck? How much will it cost? $xxx/month for y years, not $65,000. Easy sell!

The Seven-Year Auto Loan: America’s Middle Class Can’t Afford Its Cars

[TroubleWithTribbles]

I see the point. But if you plan to stay in the same home for a long run, buying can make sense in a lot of scenarios even if you don’t pay it off quickly. We bought about about 19 years ago. As a result, our monthly payments have gone up minimally. Even though we have another 10+ years because we moved “up” once, refinanced twice, and took out 150+ in equity to pay off student loans, in terms of equity we are a few hundred thousand ahead of where we would have been with renting all this time. Until Trump limited property tax and mortgage interest deductions for federal taxes, it was an even better deal…

Note we lost a bit the first time we bought because we were only there 2 years, the market stayed pretty flat then, and the sales commission cost us 6%.

[dan2006]

Anecdotally I’ve heard mortgages are easier to get for foreigners as supposed to unsecured loans which are pretty much impossible.

Although 2 years ago Taichung bank gave me a hard no, not even a guarantor option. A few others said it should be possible.

[dan2006]

They’re not wrong historically.
Although past performance does not guarantee future performance