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You forget many areas have seen taxes escalate so much than even with a paid off house people have to move and can't live there.
Long island and westchester typically have taxes on even a small home in the 12-18k arange.
Many of these homes cost only 39k back in the 1970's. Today two years taxes cost more.
The point is having no mortgage is not a guarantee of affordability later on.
My comments were to be taken in general. I don't doubt that unforseen events/tax rate hikes etc. can come up - that's true with anything.
If the home's value goes up to the point that you can't cover the taxes, take the huge profit and get a cheaper one.
And I stand by my opinion that in THIS MARKET, with UNUSUALLY LOW MORTGAGE RATES, it's a good bet that you'll come out ahead at the end of day if you buy the right house for the right reasons rather than rent.
And aside from the raw numbers, it's still better to have tried and failed at home ownership than been too scared to make a deal to begin with.
You want guarantees? Stuff your money under a mattress or bury it in coffee cans.
it is never better to try owning a home unless that is what you want. no one needs a house if they don't want one
many folks with the means have no interest in owning a home. myself included. i do all my investing elsewhere and those investments have done far better than having my money tied up in a home.
a home is a lifestyle choice .
i did very well investing in real estate and as an investor i couldn't have invested in anything better than the properties and things we did. but i also like renting.
i have no desire to spend time with maintaince,chores and up keep nor all the unexpected bills . we live in a nice high rise with pool ,tennis courts and a moderate rent all 18 minutes from manhattan.. we could buy a place like ours but it wouldn't pay.
there are folks who know nothing about investing and get deals on homes and so for them a home is something to consider.
others just have no need or want to buy and they still win the game investing elsewhere.
Last edited by mathjak107; 02-09-2014 at 04:59 PM..
My comments were to be taken in general. I don't doubt that unforseen events/tax rate hikes etc. can come up - that's true with anything.
If the home's value goes up to the point that you can't cover the taxes, take the huge profit and get a cheaper one.
And I stand by my opinion that in THIS MARKET, with UNUSUALLY LOW MORTGAGE RATES, it's a good bet that you'll come out ahead at the end of day if you buy the right house for the right reasons rather than rent.
And aside from the raw numbers, it's still better to have tried and failed at home ownership than been too scared to make a deal to begin with.
You want guarantees? Stuff your money under a mattress or bury it in coffee cans.
you use the term come out ahead. ahead of what?
for those who have an option to buy or rent and invest elsewhere they usually get a higher income from investing in other assets to offset a lifetime of higher rent.
the homeowner has the money tied up in the house so they get cheaper housing costs and less income from investments.
i fail to see the a head by buying a home part.
even into retirement many seniors who are homeowners still have a mortgage to pay. most of america moves many times and they are usually starting back at year one in their mortgages. many owe equity loans.
you would think once a mortgage was paid off a homeowner could take that extra money and start to invest it to catch up but these mortgages never seem to go away. throw in the decades of compounding that is lost starting late and a homeowner can easily end up with poor cash flow.
sure renters could have runs of bad markets , not have the discipline to invest or any other host of problems too so it isn't a slam dunk either.
but the words a homeowner would be ahead is very far from the truth once you weed out renters who have no options and no money to buy,
one of the best decisions in my own life was to sell our home ,rent and buy into a real estate partnership .
our story is repeated over and over by many folks .
success comes from many different avenues and home buying is not the only way to win.
Last edited by mathjak107; 02-10-2014 at 04:00 AM..
for those who have an option to buy or rent and invest elsewhere they usually get a higher income from investing in other assets to offset a lifetime of higher rent.
the homeowner has the money tied up in the house so they get cheaper housing costs and less income from investments.
i fail to see the a head by buying a home part.
even into retirement many seniors who are homeowners still have a mortgage to pay. most of america moves many times and they are usually starting back at year one in their mortgages. many owe equity loans.
you would think once a mortgage was paid off a homeowner could take that extra money and start to invest it to catch up but these mortgages never seem to go away. throw in the decades of compounding that is lost starting late and a homeowner can easily end up with poor cash flow.
sure renters could have runs of bad markets , not have the discipline to invest or any other host of problems too so it isn't a slam dunk either.
but the words a homeowner would be ahead is very far from the truth once you weed out renters who have no options and no money to buy,
one of the best decisions in my own life was to sell our home ,rent and buy into a real estate partnership .
our story is repeated over and over by many folks .
success comes from many different avenues and home buying is not the only way to win.
I have 2 single family residences I rent out. One has a morgage of $520 per month including escrow. It currently rents for $995 per month. The second has a mortgage of $465 per month including escrow. It rents forr $899 per month.
I WILL GLADLY rent either of these to YOU, so you can have more money to invest in the stock market, provided you can pay the rent every month and won't tear the place up.
I am not a fan of residential real estate as investments, i don't like dealing with tenants .. we did own and still do own some co-ops in manhattan but much prefer commercial property and owning master leases.
we sold off our master leases on a property 2 weeks ago in manhattan. it was a mind blowing deal and sold for a staggering amount of money. the real estate world is still talking about it.
I can send you a link if you want to read about the deal.
98% of the resi stuff we own are special situation like prestigious co-ops on central park south with rent stabilized tenants.
we try to buy out their leases and sell the apartments.
that is the kind of stuff I like. i am not into just collecting rent.
as most here already know our partner in most of our real estate investments is bernard spitzer one of the most well know real estate moguls in nyc. he is our former governor elliot spitzers dad.
we were partners in the 200 central park south building , an archetectural landmark in nyc next to lincoln center .
one of the things held on to when the building was taken co-op in the 1980's was the lease rights to the commercial properties for 50 years.
with 20 years to go before the lease expires bernie sold the lease rights and all the rights to collect the rent a few weeks ago.
we only hold a small percentage in the partnership but our share was pretty decent .
our end is a family held llc which is my wife and i , our son and 2 other family members ..
the deal closed at 18 million dollars of which 16 million was in cash and we are holding 2 million in notes for 4 years at 2% although i haven't seen that detail released in any of the news articles.. not a bad sale considering the asking price was 18,600.00 so holding back the 2 million was a deal sweetener for the buyer.
overall it was a fabulous deal for us although we will miss the income from it ,especially since i am semi retiring in july.
as most here already know our partner in our real estate investments is bernard spitizer one of the most well know real estate moguls in nyc. he is our former governor elliot spitzers dad.
we were partners in the 200 central park south building , an archetectural landmark in nyc next to lincoln center .
one of the things held on to when the building was taken co-op in the 1980's was the lease rights to the commercial properties for 50 years.
with 20 years to go before the lease expires bernie sold the lease rights and all the rent rights a few weeks ago.
we only hold a small percentage in the partnership but our share was pretty decent .
our end is a family held llc which is my wife and i , our son and 2 other family members ..
the deal closed at 18 million dollars of which 16 million was in cash and we are holding 2 million in notes for 4 years at 2% although i haven't seen that detail in any of the news articles..
overall it was a fabulous deal although we will miss the income from it ,especially since i am semi retiring in july.
I'm curious, since I don't know anything about real estate investment, of the 18 million dollars from the sale, how much of that was profit for you guys, and how much did you have to pay in taxes?
our LLC holdS a 10% stake in the lease rights but we own our share of the co-ops 100%. we had 9 when we first bought into the partnership. 7 took lease buy outs and we sold the apartments. two are still left and so far they are not going anywhere so we are stuck with those tenants .
being they are origonal stabilized tenants the rent is way below market and close to break even. but those are the risks of doing what we do.
as far as taxes ,i am ball parking about 1/3 .. although we do get low capital gains rates on it ,when combined with our other income it will get hit with the amt tax. We have ny state and ny city taxes to pay too.
Last edited by mathjak107; 02-10-2014 at 06:03 PM..
I have done very well building and selling homes. Made a lot of money. I lost 20k on one home and that was because it was Wichita, arm pit of the nation and it was 2009 worst economy to sell in. I moved to Fla and bought a condo in Sarasota and rent it and a home in Port Charlotte and my values have increased by 40 percent. I have made 10k on the condo so far and the value of it is up 50k. Not as much with my home it up about 20k. Yes its a good way to make money, only one thing though, you will have a much harder time doing it if you have to loan the funds. If you pay interest its harder to make money. My one rule is never ever pay interest. I deposit money and they pay me interest but never do I pay it.
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