Vinen
God is dead
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This is why I sold my prior house. 665 -> 850 USD in 4 years of ownership. Was really not worth renting and having to deal with upkeep, etc.
Home buying thread
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This is why I sold my prior house. 665 -> 850 USD in 4 years of ownership. Was really not worth renting and having to deal with upkeep, etc.
rad
Lord of Guk
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I can understand some people are turned off having to manage their property, but this isn't a concern of mine. We can afford to purchase the new without the old. Makes zero sense to sell an asset that is covering itself and netting you a profit that can be used to aggressively pay down the principal. Of course everyone has a different school of thought on this but ideally we'll have 5-6 properties by the time we retire that should be nearly (if not completely) paid off. At that time we can decide to cash out or live off the income.
Khane
Got something right about marriage
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What was the price of that home in 2007 vs when you bought it in 2010 for 235k? Why has it more than doubled in value in 7 years? How easy is a property like this to rent out in your area and what is turnover like? What are maintenance and upkeep costs? What are tax and insurance costs?
I'm not saying renting is a bad plan or idea but why on earth would you ever say that it makes zero sense to sell a property that is worth more than twice what you paid for it a mere 7 years later? That is a huge, currently unrealized gain. And how else could you reinvest that money for a better return?
I'm not saying renting is a bad plan or idea but why on earth would you ever say that it makes zero sense to sell a property that is worth more than twice what you paid for it a mere 7 years later? That is a huge, currently unrealized gain. And how else could you reinvest that money for a better return?
moonarchia
The Scientific Shitlord
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Well, the deal is done. I have made my peace with it, and set up getting movers, xcel, and comcast to move next month on closing day.
I bought my place in Oct 2014 for 135k. I am selling it today for 230k. Buying a new place in an age restricted community with almost as much space for 190k. Will have most of my debts paid off, with the rest done by next year, and cut over $100 off my mortgage/hoa/insurance/property tax every month. In fact, I will be paying less than what I was paying for rent 3.5 years ago, so there is a decent silver lining in all this.
I bought my place in Oct 2014 for 135k. I am selling it today for 230k. Buying a new place in an age restricted community with almost as much space for 190k. Will have most of my debts paid off, with the rest done by next year, and cut over $100 off my mortgage/hoa/insurance/property tax every month. In fact, I will be paying less than what I was paying for rent 3.5 years ago, so there is a decent silver lining in all this.
Vinen
God is dead
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I assume he purchased after the crash? 2007 doesn't match up with that but it seems like it. Certain areas of California got hit really hard and then skyrocketed.
Khane
Got something right about marriage
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That's what I'm saying. Look at the prices in 2007, before the '08 crash, and compare them to today. Why has the value shot up so much since the purchase? Does it seem like a similar scenario? It definitely sounds like it which would make it pretty prudent to sell the property then use those gains to re-purchase properties after the next correction. That's all speculative but it's a sound strategy if the market looks similar.
The sort of gain he could make by selling is basically a once in a lifetime kinda thing. Though it seems like we haven't learned our lessons with lending practices in the US and maybe it's a once every ~10 years kinda thing heh.
The sort of gain he could make by selling is basically a once in a lifetime kinda thing. Though it seems like we haven't learned our lessons with lending practices in the US and maybe it's a once every ~10 years kinda thing heh.
rad
Lord of Guk
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I can appreciate the feedback and I was strong in saying ZERO but in our current situation it doesn't make much sense to sell. My timeline is slightly off, I believe we bought mid/end of 2009. The house was built in 2006 and is currently back at it's original asking price before the crash. There's multiple reasons for the increase besides the obvious but they completed much of shopping/entertainment area they had in the works and the community itself is no longer building new units, so the demand is high. Probably should state we purchased this house specifically because we felt it would be a good rental property. All exterior maintenance is covered by the HOA including roof/paint/gutters not just landscaping, really couldn't ask for a better situation as far as upkeep is concerned. Only item I still need to take care of is water softener, unfortunately the area is extremely hard and guaranteed it's going to cause issues with the plumbing long-term.
Don't get me wrong, I see where you're coming from but I'm banking on the market staying on a positive track for the next couple years. By then we'll be in a good spot to repeat the process and still be on solid footing assuming the market takes a shit.
Keystone
Lord Nagafen Raider
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Disclaimer, I'm not a tax accountant.
Tax wise also, if you are selling your primary residence on moving out I'm pretty sure you pay zero tax on the gains (up to a fairly large amount I think?) whereas if you decide to rent it for a while and sell later I'm not sure If that's still the case. It is definitely something that should be considered. Maybe even if you're going to keep it you could essentially set up a LLC to "sell" it to, realize that personal non-taxable gain in that way, then have the new higher basis for when you eventually sell the property down the road in the LLC.
Tax wise also, if you are selling your primary residence on moving out I'm pretty sure you pay zero tax on the gains (up to a fairly large amount I think?) whereas if you decide to rent it for a while and sell later I'm not sure If that's still the case. It is definitely something that should be considered. Maybe even if you're going to keep it you could essentially set up a LLC to "sell" it to, realize that personal non-taxable gain in that way, then have the new higher basis for when you eventually sell the property down the road in the LLC.
The rule is that it must be your primary residence for 2 out of the last 5 years. The gain is only tax free up to $500,000 for married filing joint. So in four years he'll lose the exemption. He'll have a mix of ordinary income and capital gains if he sells the rental after that. Once you start depreciating or taking a loss you'd also have to recapture that bit as ordinary income even if you are still within the 5 year rule.
You can't step-up tax basis when selling to a related party.
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moonarchia
The Scientific Shitlord
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You have to own/mortgage for 3 years and you get up to +250k in value removed from capital gains. So 0 fed income on up to that amount.
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AladainAF
Best Rabbit
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lol, Travis county appraisals came out today, and as usual, they went through the fucking roof. These people are fucking criminals. No wonder only investors can afford homes at this point. The values go up so much resulting in much higher taxes making people unable to pay. Thank god I live in a place where my tax rate is really low because my city charges the lowest taxes than just about anywhere else in Texas.
Too bad on the rentals, just passing that shit along to the tenants.
Too bad on the rentals, just passing that shit along to the tenants.
Vinen
God is dead
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Keystone
Lord Nagafen Raider
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It's just 2 years isn't it? (thinking about moving next year after I've had mine for 2 years, guess I should do some more research to make sure)
AladainAF
Best Rabbit
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2017 to 2018? Nah. I'll just YET AGAIN use some local service to contest it, get it drastically reduced, which is routine and the same shit I do every year. And every single year I get a substantial reduction in value, and pay the service a fee - but a fee that is much cheaper than paying the tax if I didnt contest it. They simply count on people not contesting it. Because they are criminals.
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moonarchia
The Scientific Shitlord
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Well, packing up and throwing out a whole fuckton of shit that I should have replaced years ago anyways. Large men with a moving truck will be here in a couple hours to haul most of it away for the night. Then bring it to new place tomorrow while I am at closings. Parents are coming up for a few days, so we will go shopping and replace all the old stuff. Buyer wants to do final walkthrough tomorrow an hour before we close. Seems a little odd to me, but whatever. If he bails at the very last second we all lose, but I can refi easy enough, and be back to paying down my mortgage as my only remaining debt
Lanx
<Prior Amod>
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moonarchia
The Scientific Shitlord
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Lanx
<Prior Amod>
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i did mine 2 hours before closing, home owner was out of state and was being represented by the agent. Anything we found funny, we'd just amend it to the contract.
of course i didn't know what to look for, my agent just walked around, and lucky enough nothing was funky and getting a new ac unit paid by them was more than more.
moonarchia
The Scientific Shitlord
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Well, yesterday was busy and tiresome, but I am in my new place. Most of the furniture is in place, and I get to start unboxxing everything. Comcast part went smooth as silk. Cutting the video cord today. Roku box + hulu + amazon + netflix + crunchyroll + spectrum app (employee package through work). I will have everything under the sun, and it will still be cheaper than basic cable.
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Screamfeeder
The Dirtbag
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I've been doing some light research lately and wanted to know if anyone here as any opinions of Cash vs Mortgage. Meeting with some realtors in the next month or so. Planning on getting far fucking away from Santa Monica rent.