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Old 06-04-2018, 07:55 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,111 posts, read 3,402,459 times
Reputation: 5633

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Quote:
Originally Posted by wheelsup View Post
Your post referenced income only.

I didn't say my payment was $300/month.
You said you only have a 300 a month interest payment. That's the part that's tax deductible, not the entire payment. As time passes more of your total payment will go to principal and less to interest .
The op will be taking on a new mortgage so most of their payment will go towards interest. I seriously doubt they will have a small payment of just a little over 300 a month hence a larger possibility of a tax deduction.
Having a higher income as the op does normally can benefit from tax deductions .
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Old 06-05-2018, 09:42 AM
 
Location: Lower East Side, NYC
1,837 posts, read 1,088,246 times
Reputation: 1290
Don't forget the standard deduction for married couples is now $24k. Oregon taxes @ $200k is $17,556 (based on 2017 taxes from smartasset) + $3,600 ($300/mo *12) < $24k. If you somehow can make up the roughly $3000 somewhere else, you should itemize, but really you're losing regardless. You should never pay more to get back more as your netting less. If you're deducting in other ways (say, 401k, 529, etc.) you need more than that $3k number to beat the standard deduction. They really are discouraging home ownership with the new tax setup.

If you like Portland, stay. Just know that you're going to be paying for it. Having Washington right there is nice, that alone will save you $17,556 a year. That's basically a 401k contribution. Figure out if your decision is purely financial or not, that's probably the first step. If it is, get over to Washington asap.
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Old 06-05-2018, 11:36 AM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
20,785 posts, read 37,451,783 times
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Quote:
Originally Posted by Javawood View Post
Don't forget the standard deduction for married couples is now $24k. Oregon taxes @ $200k is $17,556 ...
If you like Portland, stay. Just know that you're going to be paying for it. Having Washington right there is nice, that alone will save you $17,556 a year. That's basically a 401k contribution. Figure out if your decision is purely financial or not, that's probably the first step. If it is, get over to Washington asap.

Sounds like current job ONLY exists in OR, but....

If you like Portland area... look for work and housing in Vancouver, WA. There are quite a few options, and many (ex) Oregonians now telecommute and physically stay (and work) in WA.

(The National Park Service just announced they are moving West Coast headquarters from SF to Vancouver, WA! (Saves $2m in rents alone...)
VANCOUVER, Wash. — The National Park Service is planning to relocate a Western regional office to Vancouver in a move that could save almost $4 million a year.
https://www.seattletimes.com/seattle...ancouver-wash/

Income tax free WA (while enjoying left coast higher wages) was a big plus to my ability to retire 18 yrs early.

To the MAIN discussion... I would put my RE $ elsewhere than a primary residence in an inflated RE market. But... I could be wrong (as usual).

I would WORK / earn wages in the HIGHEST paid region, which was tolerable for living. (If EXPENSIVE place to live... I would get VERY creative! (Easier to do if single).

If Quality of life / recreation / events is critical to your happiness... add that to your equation and go somewhere you will be happy and engaged. Work / career and family take a VERY big chunk out of your life span. Make it count.
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Old 06-06-2018, 09:11 AM
 
11,315 posts, read 5,839,816 times
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My take:


With some rare exceptions, you do far better investing in the stock market than you do in appreciation on a single family home. The high cost of living places have been the exception to this because people are buying homes with stock market windfall combined with a severe shortage of housing in towns with quality public school systems. In my opinion, this was a once-in-a-lifetime event unlikely to repeat in most locations. A shack in Sunnyvale isn't going to cost $1.25 million forever. When the tech employee stock windfall dries up, it will collapse.


With that said, there's no telling with the Portland, OR market. There's enough California flight that the local real estate market may continue to do really well.


For anywhere that's not one of those rare markets, the way you create the most wealth is to live in a tiny apartment in a sketchy neighborhood and invest everything else in the market. Over a work career, that has always proven to be the winning strategy. You buy a home for quality of life, not as an investment. Only you can decide how much of your income is declared 'discretionary' and dumped into a house. Most people making $200K wouldn't flinch at a 20% down $550K home to improve their quality of life. It's only a $400-ish thousand mortgage. Interest rates are still historically low.


The caveat to this is public school systems. In the United States, schools are socioeconomically segregated. You are investing in your children by buying in a gold plated suburb with the gold plated school system. Those towns tend to fight high density housing to the death since it brings in the riff-raff that trashes their school system. If you want the best educational opportunity for your children, you have to buy your way in. $550K for a single family home is cheap money compared to 12 years of private school for a couple of children. My local real estate market is metro Boston. $550k buys a shack in a sketchy town with an iffy public school system. The hurdle to buy into a town with the gold plated school system is more like $1 million. In that market, the best strategy is to buy the smallest-cheapest house in town and remodel it to your taste over time. You want the lowest property taxes in town. It's the equivalent when you have children to renting the small, cheap apartment.
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Old 06-06-2018, 11:11 AM
 
Location: Gilbert, AZ
3,003 posts, read 1,695,130 times
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Quote:
Originally Posted by MDCB View Post
We live in the PNW (Portland) and median home prices = ~ 550K
We love living in the PNW and Portland in particular

We make ~ 200K/year
Current savings = ~ 50K
No education loans.
Car loan 20K @ 2.9% ($400/month)

Can get a loan with 5% down (physician loan)

Current Rent = $2900


What do you think would be the intelligent thing to do:
- Continue renting? and potential wait for a bit of a downturn in the housing market?
- Buy a house?
- Move to the midwest/cheaper area and buy a house for a median cost much lower?
If you love Portland I see no reason to move. Your income is certainly sufficient to buy a house there.

Waiting for a downturn may or may not work. I was lucky and bought my first house toward the end of the RTC days, in the early '90s. Prices went up about 1%/month for a few years... it was like minting money. I got it in my head that I would wait until the next downturn and then get a bigger and nicer house. Well, I could write a long story here, but suffice to say I/we ended up moving twice in the next few years. Still no downturn. Finally in 2012 we bought our current house and again got a bit lucky in buying just at the upswing in local prices from the Great Recession. So that was about 20 years between downturns. A lot of life happens in 20 years and one can't always wait for the optimal time to buy.
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Old 06-06-2018, 11:14 AM
 
Location: Gilbert, AZ
3,003 posts, read 1,695,130 times
Reputation: 2945
Quote:
Originally Posted by GeoffD View Post
With some rare exceptions, you do far better investing in the stock market than you do in appreciation on a single family home. The high cost of living places have been the exception to this because people are buying homes with stock market windfall combined with a severe shortage of housing in towns with quality public school systems. In my opinion, this was a once-in-a-lifetime event unlikely to repeat in most locations.
+1

Yup, I agree with this. Owning a house is mostly a lifestyle issue. I like owning my own house, for a few different reasons. I don't want to live in an apartment again, and renting a house has issues. The big one is that the landlord can decide to sell any time a lease ends, forcing the tenants to move. But financially speaking I'd be ahead today if I'd never owned a house.
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