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Old 02-22-2018, 11:06 AM
 
5,607 posts, read 4,162,357 times
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Quote:
Originally Posted by Quietude View Post
Well... I just came from a small town in CT, where property taxes are completely local - each town sets a budget and a mill rate by referendum every year or two, and the two are yoked together. Schools were 75% of the budget. Most of what you say is true - it was a town of middling to upscale homes, one apartment complex, virtually no multifamily (in-law quarters not permitted)... and one of the reasons we moved there was for the schools. However, the property tax rate was very high, about $2500/100k annually. Plus cars and business property were assessed and taxed under that rate.

Agreed. Affluent-ish suburbs/towns, despite lower birthrates, typically have higher than average taxes due to demand for superior schools and other services. The example you give has been my experience as well.
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Old 02-22-2018, 11:38 AM
 
6,824 posts, read 4,415,191 times
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Quote:
Originally Posted by City Guy997S View Post
Also consider the hidden costs of owning a mansion.....maintenance, staff, utilities, insurance and taxes. Evander Holyfield's Georgia estate was 100 acres, 54,000 sq ft and he said the place cost him a million dollars a year to run yet it sold at foreclosure auction for less than 6mm. So after 5-6 years of owning it the new owner will have spent double the purchase price maintaining it!
The same happens, with proportionately smaller numbers, for mainstream houses in low-COL area. If a $1M house and a $100K house are each on 5 acres, then each has (obviously) 5 acres. One needs a lawn-tractor to mow that... figure $1500 every 10 years. The roof refurbishment will cost maybe $15K for the $1M house, and $10K for the $100K house. And so forth. Maintenance costs are NOT proportional to the market-price of the house. For the cheaper house, it's entirely possible to spend more on maintenance than on the mortgage, especially if the house is older, and the owner isn't handy.

Quote:
Originally Posted by Chemistry_Guy View Post
... In Ohio the major reason for property taxes are schools, and this particular use of land results in very low property tax rates for residents as well as quiet streets and very little pass-through pedestrian traffic. ...
I’m also in SW Ohio, in a township, where most properties are 5-10 acres, with some considerably larger, and the occasional 50-100 acre farm. Our property tax rates are lower than in the city, or in the suburbs-proper, but only slightly so. The reason is that the surrounding townships need to carry the school-expenses of the “city” at the center of county-administration. The city is very poor, while the township is perhaps properly termed “middle class”. There is the occasional McMansion (some of the older and more tasteful ones may dispense with the pejorative prefix, “Mc”)… but most houses are modest. Growth is limited, first because there’s little demand, and second because township ordinance stipulates minimum lot size. But property taxes keep rising, because the “city” keeps getting poorer.

Quote:
Originally Posted by GeoffD View Post
...Affluent suburban towns where the professionals live tend to have zoning that forbids multifamily housing and has minimum frontage and lot size requirements that make it impossible to build starter homes. Affluent people have a much lower birth rate than poor people. That keeps property tax rates low since the typical home has less than one kid in the public school system. ...
This isn’t quite true in very low-cost parts of the country. The main expense of building a house is the construction-labor. The land is inexpensive. Developers don’t necessary get that much benefit from cramming lots of houses onto small lots. Also, because of the generally conservative nature of such areas, it’s quite common for even the more affluent locals to have large families. My coworkers (mostly aerospace engineers) typically had 3-4 kids each. So even if the house-per-acre density is low, the kid-per-household density is high. And because the houses are low-price, the percentage-tax has to be high.
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Old 02-22-2018, 11:43 AM
 
2,564 posts, read 3,586,921 times
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Quote:
Originally Posted by City Guy997S View Post
Also consider the hidden costs of owning a mansion.....maintenance, staff, utilities, insurance and taxes. Evander Holyfield's Georgia estate was 100 acres, 54,000 sq ft and he said the place cost him a million dollars a year to run yet it sold at foreclosure auction for less than 6mm. So after 5-6 years of owning it the new owner will have spent double the purchase price maintaining it! Add in the fact a boxer, now a rapper owns it and it is surrounded by 200K houses in a not so wealthy town the chance of selling it for a profit is slim to none. Ironically Mike Tyson's old Conn. mansion is having similar issues (bought cheap by a rapper, expensive to own, built in a not so ritzy town, resale is tough).

https://www.zillow.com/homedetails/5...40575838_zpid/
Note the 5mm asking price is down from the original 14.5 asking price 10 years ago

Guess owning a house the size of Costco isn't that good of an idea!
I was thinking something similar while riding through the residential part of Buckhead yesterday. Owning these houses is equivalent to owning a yacht. During the day, that area is overrun with landscaping crews and other "support" staff. As the owner of a modest investment property and cognizant of all the management costs that go along with it, I can easily see how these places can quickly become more than even the rich and famous can handle.
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Old 02-22-2018, 11:48 AM
 
Location: Aurora Denveralis
3,031 posts, read 1,028,996 times
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Quote:
Originally Posted by DTL3000 View Post
I was thinking something similar while riding through the residential part of Buckhead yesterday. Owning these houses is equivalent to owning a yacht. During the day, that area is overrun with landscaping crews and other "support" staff. As the owner of a modest investment property and cognizant of all the management costs that go along with it, I can easily see how these places can quickly become more than even the rich and famous can handle.
You do know the original quote, from Rockefeller to a passerby admiring his yacht, was "Anyone who has to ask about annual upkeep can't afford one."

("...how much it costs..." is a later distortion.)
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Old 02-22-2018, 12:26 PM
 
Location: Somewhere in America
12,305 posts, read 10,055,580 times
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Who wants to pay to heat or cool a 10,000 sq ft house? Who wants to deal with staffing it? Yeah at that size, you need housekeeping and probably landscaping workers. You're not building 10,000 sq ft on a half acre lot. Typically, they're built with major acreage. Then there's the property taxes. Those will give folks a heart attack.
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Old 02-22-2018, 12:57 PM
 
Location: Aurora Denveralis
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Quote:
Originally Posted by ss20ts View Post
Who wants to pay to heat or cool a 10,000 sq ft house?
I'm not sure, but when I left Northern California [NOT the Bay Area] around 2010, I had watched mini-mansions roll over every hill around for ten years. 5000sf on lots not often twice that size. Giant condos with attached garages, really. But few remained unsold until the crash.

And most have probably disintegrated by now.
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Old 02-22-2018, 03:36 PM
 
Location: Raleigh
6,988 posts, read 5,196,162 times
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I think that there is also a point where you're spending a lot of money for someone else's tastes. Even an extremely elegant, tasteful house, is one person's taste and not another to a certain extent.

When you get to a certain price, you are bound to look at what your $$ can do if you build/buy a new McMansion. Even if its 4000 sf instead of 6000 sf, or a smaller lot.
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Old 02-22-2018, 03:51 PM
 
Location: U.S.A., Earth
4,343 posts, read 2,612,590 times
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Quote:
Originally Posted by City Guy997S View Post
Also consider the hidden costs of owning a mansion.....maintenance, staff, utilities, insurance and taxes. Evander Holyfield's Georgia estate was 100 acres, 54,000 sq ft and he said the place cost him a million dollars a year to run yet it sold at foreclosure auction for less than 6mm. So after 5-6 years of owning it the new owner will have spent double the purchase price maintaining it! Add in the fact a boxer, now a rapper owns it and it is surrounded by 200K houses in a not so wealthy town the chance of selling it for a profit is slim to none. Ironically Mike Tyson's old Conn. mansion is having similar issues (bought cheap by a rapper, expensive to own, built in a not so ritzy town, resale is tough).

https://www.zillow.com/homedetails/5...40575838_zpid/
Note the 5mm asking price is down from the original 14.5 asking price 10 years ago

Guess owning a house the size of Costco isn't that good of an idea!
General rule of thumb is to budget 1% per year in the usual maintenance of a house. Includes property taxes, utility bills, etc. However, this does NOT include emergency repairs.
.
Then again some of the property/real estate taxes have been off given this "formula"... a $666K house in NJ can have a $10K tax. A $1 million house can have a $54K tax!
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Old 02-22-2018, 04:37 PM
 
6,824 posts, read 4,415,191 times
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Quote:
Originally Posted by ackmondual View Post
General rule of thumb is to budget 1% per year in the usual maintenance of a house. Includes property taxes, utility bills, etc. However, this does NOT include emergency repairs.
.
Then again some of the property/real estate taxes have been off given this "formula"... a $666K house in NJ can have a $10K tax. A $1 million house can have a $54K tax!
Or, a $150K house could have a $3500 annual property tax. It could need a $10K roof every 25 years, a $2K repaving of the driveway every 10 years, a $4K renewal of appliances every 15 years, a $10K furnace every 20 years, and so forth. If it's on a half-acre lawn, it might need $1K of lawnmowing every year (unless the owner really enjoys intimate interaction with grass). In a cold climate, a poorly insulated house of this type might cost $500/month in heating-bills, 4-5 months of the year. And so forth.

This is why I keep saying that maintenance/taxes/insurance can easily exceed the cost of a mortgage. Phrased alternatively, suppose that a young-person inherits such a house from his/her parents, fully paid off. Well, it might still be cheaper for said person to stay in his/her apartment in town, paying rent every month, than in living in this "free" house.
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Old 02-22-2018, 05:07 PM
 
Location: Aurora Denveralis
3,031 posts, read 1,028,996 times
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Quote:
Originally Posted by ohio_peasant View Post
Or, a $150K house could have a $3500 annual property tax. It could need a $10K roof every 25 years, a $2K repaving of the driveway every 10 years, a $4K renewal of appliances every 15 years, a $10K furnace every 20 years, and so forth. If it's on a half-acre lawn, it might need $1K of lawnmowing every year (unless the owner really enjoys intimate interaction with grass). In a cold climate, a poorly insulated house of this type might cost $500/month in heating-bills, 4-5 months of the year. And so forth.

This is why I keep saying that maintenance/taxes/insurance can easily exceed the cost of a mortgage. Phrased alternatively, suppose that a young-person inherits such a house from his/her parents, fully paid off. Well, it might still be cheaper for said person to stay in his/her apartment in town, paying rent every month, than in living in this "free" house.
Yes, yes, houses have costs. I am absolutely bewildered how people can make this into an issue, when literally hundreds of millions of house-owners take it in their stride.

Do the math on renting and it's pretty much the same costs... just equalized over time. Property owners don't resurface the parking lot or the roof, or replace appliances a lot more often than 15 years, for free.
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