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Old 01-26-2018, 07:39 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
29,938 posts, read 54,667,582 times
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Quote:
Originally Posted by LiaLia View Post
This is interesting. Just curious, what's your reasoning on buying the next house rather than renting a place? I would think in a situation like yours where house appreciation is not paramount, renting would be simpler (no maintenance!) and more financially reasonable (no taxes for one thing) and you'd still have a $600,000 cushion. What am I overlooking? Thanks.
First, as someone else mentioned, rent goes up, often every year, and renters cannot do anything to the home. I enjoy doing maintenance, renovations, gardening, and plan to have a smaller, modest house with some acreage, a tractor, some woods, and outbuildings.
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Old 01-26-2018, 07:49 AM
 
Location: Washington State
18,744 posts, read 9,667,258 times
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Quote:
Originally Posted by Harpaint View Post
Except that for most Americans, their home IS their largest investment! Great if is isn't though.
Any statistics to back that up? I would think most people have more in their investments than their house asset value.
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Old 01-26-2018, 08:25 AM
 
8,237 posts, read 11,948,218 times
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Quote:
Originally Posted by Submariner View Post
For most Americans their home is their largest asset.

But is it really an 'investment'?

For our first four homes interest rates were high. Let me give you an example. On a $100k Single-Family-Residence, if I made the mortgage payments for 30-years I would have paid a total sum of $300k. That $100k house would have cost me $300k.
Except that very few people keep their mortgages for 30 years. In fact, other than my parents, I don't know anyone who has. This has been my home-owning history (not all properties had mortgages):

1985 - 1989
1989 - 1998
1998 - 2009
2010 - 2013
2012 - present
2017 - present


Quote:
Originally Posted by Submariner View Post
And if I had sold it for $120k, the IRS would have taxed me on the 'increase between $100k and $120k, ie $20k. While it would have still cost me $300k to buy.
The IRS does not tax gains of $20k on primary residences.


Quote:
Originally Posted by Submariner View Post
If that honestly an 'investment'?
I've come out many hundreds of thousands of dollars ahead on the buying and selling of houses and condos, so yes, I do consider owning property to be an investment. YMMV


Quote:
Originally Posted by Submariner View Post
To me, an investment is something that I put money into where I plan to make money.
See above.
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Old 01-26-2018, 08:47 AM
 
Location: Forests of Maine
30,732 posts, read 49,546,472 times
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Quote:
Originally Posted by MadManofBethesda View Post
The IRS does not tax gains of $20k on primary residences.
My understanding was that, you get to roll-over your gains from one property to the next. But you need to declare it as taxable, with a one-time exclusion of X amount.
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Old 01-26-2018, 08:57 AM
 
66 posts, read 20,908 times
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Quote:
Originally Posted by fluffythewondercat View Post
We’ve been shopping for a second, “retirement” home in Scottsdale, Arizona. The area was chosen for livability and for similarity in terms of services offered to where we currently live in Silicon Valley.

There are currently 3500 homes listed for sale here. Worse, Scottsdale is not completely built out with SFHs the way our area is. If you look at historical prices paid on a variety of properties, it seems that few will make any money when they sell. Some take a loss.

I’m not sure how I feel about this. I’ve never bought a property without a reasonable expectation of gain in the long run. I don’t expect the crazy price increases we get at home, where there’s a shortage of houses. But we both like the area and the house styles.

What would you do? Would you just decide you won’t care if the new house never appreciates in value?
If there's that big of a glut of homes then why not just rent when you want to go there ?
Is there a reason you need to buy a home vs rent for a few months ?
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Old 01-26-2018, 09:28 AM
 
Location: Location: Happy Place
3,703 posts, read 1,885,943 times
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Quote:
Originally Posted by fluffythewondercat View Post
We’ve been shopping for a second, “retirement” home in Scottsdale, Arizona. The area was chosen for livability and for similarity in terms of services offered to where we currently live in Silicon Valley.

There are currently 3500 homes listed for sale here. Worse, Scottsdale is not completely built out with SFHs the way our area is. If you look at historical prices paid on a variety of properties, it seems that few will make any money when they sell. Some take a loss.

I’m not sure how I feel about this. I’ve never bought a property without a reasonable expectation of gain in the long run. I don’t expect the crazy price increases we get at home, where there’s a shortage of houses. But we both like the area and the house styles.

What would you do? Would you just decide you won’t care if the new house never appreciates in value?
When I took a job transfer back to my home town three years ago in anticipation of our retirement, we purchased a SFH in a mixed age, diverse neighborhood, really not considering appreciating in value. The 153k home is now valued at almost 200k, and I wouldn't sell it for less than 240k. Not going to sell unless I outlive husband and I know I would hate staying in a large home by myself. I will move downtown where all the lights are bright......
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Old 01-26-2018, 09:54 AM
 
102 posts, read 45,438 times
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Personally if I were in your situation I would have considered renting for a few months during the year as opposed to buying. I would start with a realistic expense analysis for the two above scenarios to determine which of the two you would come out ahead..if you are concerned about a lack of appreciation. I would take the buying route if I would break even or even take a loss if it were less than renting, when selling the home.
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Old 01-26-2018, 10:15 AM
 
8,237 posts, read 11,948,218 times
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Quote:
Originally Posted by Submariner View Post
My understanding was that, you get to roll-over your gains from one property to the next. But you need to declare it as taxable, with a one-time exclusion of X amount.
That was the law up until about 1997 or so. Since then you have been able to keep all capital gains up to $250k/pp or $500k couple without having to declare it or roll it over. Moreover, you can do this once every two years rather than a once-in-a-lifetime exclusion.
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Old 01-26-2018, 12:26 PM
 
Location: Eastern Washington
14,297 posts, read 45,022,597 times
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Quote:
Originally Posted by Submariner View Post
My understanding was that, you get to roll-over your gains from one property to the next. But you need to declare it as taxable, with a one-time exclusion of X amount.
I think that's the way it was, until about 10 or 15 years ago, when the law was changed. Now you can keep the gains tax-free up to a number that is beyond anything I expect to own.
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Old 01-26-2018, 01:23 PM
 
Location: Finally the house is done and we are in Port St. Lucie!
3,488 posts, read 2,088,349 times
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Quote:
Originally Posted by fluffythewondercat View Post
I guess the joke is on me because I found out today that home is under contract.



We made an offer today. First time we'd seen the house and we knew it was perfect for us.
Congratulations!!!!
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