Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I know you love to point out the depreciation recapture as a bad thing, you’ve posted it many times every opportunity. As you often say in other threads, it depends on each individual.
Go back and look at the op’s age . The time when the the depreciation runs its course the op will be well over 90.
I know you often post against rental properties as an income source but for the op it may work out nicely. There’s always a 1031 exchange.
People start out with intentions of not selling but the reality is they do ,especially as they get older and either no longer want to be involved with tenants or they just prefer more liquid forms of investments ..
The flip side of things is you love your real estate and not everyone has that love for it ..they try it and realize it just is not for them and sell.. so the ramifications of selling need to be known .
I have never minded paying the recapture tax, given that the (often) excess depreciation the tax laws allow us to claim allows us to realize cash earlier than than would otherwise be possible.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,072 posts, read 7,508,849 times
Reputation: 9798
Everything has a price. Sometimes we know the price in advance and sometimes we don't.
I don't like big surprises and other lives/retirement is handled financially 2-5 years in advance.
Where would you buy those rentals? Same city you move to? What kind prices for the houses. If you explore an area you can get a good feel for the areas. Check schools, amenities, how well the neighborhood is kept up, etc.
If you are willing to leverage your money you might be able to get 4 rentals or more and have the depreciation wash your profit so you pay little in income taxes.
Yes, I'm now thinking of buying the rentals in the same general area we are moving to.....
I am seeing plenty of nice houses for $100k - $150k.....we will be over there several more times before we do any of this, so will get a feel for the neighborhoods by then. Plus we have friends over there, and a realtor to help too.
Thought about leveraging to but more, but I think I'm good with just 2, free and clear. Less hassle.....
Had this 250k been the result of years worth Of savings and investing what would that portfolio look like. Now he also has to decide how quickly he moves the money into the assets he decides on. All at once or over time!
Had this 250k been the result of years worth Of savings and investing what would that portfolio look like. Now he also has to decide how quickly he moves the money into the assets he decides on. All at once or over time!
I'll need to do this all at once. It will represent retirement income. And I can't F this up...
The more I think about it, the better fit rentals are (for me with my experience)
I will need to get with a financial guy to figure out the tax thang, of course.....
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,712 posts, read 58,054,000 times
Reputation: 46182
Quote:
Originally Posted by Woody01
Yes, I'm now thinking of buying the rentals in the same general area we are moving to.....
I am seeing plenty of nice houses for $100k - $150k.......Plus we have friends over there, and a realtor to help(?) too.
Thought about leveraging to but more, but I think I'm good with just 2, free and clear. Less hassle.....
Just be VERY careful if you have realtors that are friends!
34 RE transactions for me (2) miserable times using a realtor (at the insistence of other party who wanted a very troublesome, time-delays, and expensive hand-hold)
You MUST know the local turf / RE potential, AND have a exit plan or 2, before you make an offer.
It can be worth paying more for better earnings potential (higher rents and equity potential).
I only buy desirable spots for resale and nice spots for living with any property I add to my portfolio.[/b] (Rents are higher, tenants stay longer in desirable places).
Usually buy rural view props if SFR, or near parks, transit, walk-able, or available for positive growth zoning changes for commercial (I prefer commercial NNN, or Commercial spec props to SFR.)
I usually get 10 - 12% cap rates + 10% equity appreciation(WA) (5% equity growth on my TX props).
Doing 'fixers' adds more to your equity growth (I like trashed homes on really nice lots (few buyers are interested in that).
I use a very simple rule...
1% / month rents for capital price ($300k must bring $3k / month rents). If it can't bring that, or a 110% gain by selling tomorrow, I keep looking.
I plan on liquidating all SFR / family units before age 70, and either carry the paper (with 30% down) or 1031 to a NNN Commercial or passive RE investment. I will likely keep some form of RE for my 'bond / income' portion of total portfolio. maybe not if I find something easier (very possible).
I prefer to keep loans on my income props. (100% deductible)
I keep all investment RE in states that have no income tax filing requirements.(SIMPLIFY)
Not fun at all times, but it provides a pension level income and pays for my travel to desirable places where I keep rentals, + equity gain potential.
Tenant average stay is 7+ yrs and they love it). no property managers.
My biggest issue is rural props... Well, septic, grounds maint = high risk, higher input. But... It is what I am familiar with. (farm kid).
Know your market... upside and especially downside!
RE can be FOREVER to liquidate.
Don't buy something you cannot sell!
Just be VERY careful if you have realtors that are friends!
34 RE transactions for me (2) miserable times using a realtor (at the insistence of other party who wanted a very troublesome, time-delays, and expensive hand-hold)
You MUST know the local turf / RE potential, AND have a exit plan or 2, before you make an offer.
It can be worth paying more for better earnings potential (rents and equity gain)
I only buy desirable spots for resale and nice spots for living with any property I add to my portfolio. (Rents are higher, tenants stay longer in desirable places).
Usually buy rural view props if SFR, or near parks, transit, walk-able, or available for positive growth zoning changes for commercial (I prefer commercial NNN, or Commercial spec props to SFR.)
I usually get 10 - 12% cap rates + 10% equity appreciation(WA) (5% equity growth on my TX props).
Doing 'fixers' adds more to your equity growth (I like trashed homes on really nice lots (few buyers are interested in that).
I use a very simple rule...
1% / month rents for capital price ($300k must bring $3k / month rents). If it can't bring that, or a 110% gain by selling tomorrow, I keep looking.
I plan on liquidating all SFR / family units before age 70, and either carry the paper (with 30% down) or 1031 to a NNN Commercial or passive RE investment. I will likely keep some form of RE for my 'bond / income' portion of total portfolio. maybe not if I find something easier (very possible).
I prefer to keep loans on my income props. (100% deductible)
I keep all investment RE in states that have no income tax filing requirements.(SIMPLIFY)
Not fun at all times, but it provides a pension level income and pays for my travel to desirable places where I keep rentals, + equity gain potential.
Tenant average stay is 7+ yrs and they love it). no property managers.
My biggest issue is rural props... Well, septic, grounds maint = high risk, higher input. But... It is what I am familiar with. (farm kid).
Know your market... upside and especially downside!
RE can be FOREVER to liquidate.
Don't buy something you cannot sell!
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,712 posts, read 58,054,000 times
Reputation: 46182
BTW... if Active / traveling...
I keep a small cabin / RV sites at each rental so I have a place (for free) to enjoy when in the region. All are located at desirable destinations, near airport.
This too will change when I grow up and settle down. (one place (home) is one too many... I will likely rent / buy a co-op in retirement)
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
