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Old 07-24-2019, 12:17 PM
 
83 posts, read 37,486 times
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I bought a house in Florida in January 2012 but didn't move into it until March 2013. It worked out but I did have some issues. Worst issue was that the insurance company wouldn't write me a policy unless I had a monitored security system installed. I did that and several times the security company called me and told me the system was sending out low battery warnings. They wouldn't go to my house to check the system unless someone was home. Given that I was 1300 miles away in Indiana i wound up hiring someone to do that for me. I knew no one in Florida so I hired someone to check on my house a few times a week. That person was responsible for the security system and they also notified me if anything else was wrong.

Other issues involved yard maintenance, high taxes due to no homestead, and well pump problems.

Even with the problems I encountered it turned out positive. The home went up in value by 30 percent so I couldn't complain. If you like the house and area I'd probably go for it. If I had to do it all over I probably would've rented out that house and avoided the security system issues. Having it occupied would've changed that situation.

Good luck on your decision.
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Old 07-24-2019, 12:30 PM
 
Location: Eastern Washington
14,292 posts, read 45,022,597 times
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I would go ahead and grab it. You can rent out the downstairs in the meantime if you want. No sense in letting it go empty. That would give plenty of cash flow to hire a local property manager.



One possible downside is if you got a bad tenant. Kind of depends on the demographic around the house, although this one seems like in a decent area, should be OK.


What's the worst possible outcome? You can keep it as a 2 unit rental as long as you want. If one of the tenants trashes their unit, you can eventually get them out and remodel, write off the remodel cost. I guess worst of all is if you have to sell it at a loss down the road. How likely is that? You can answer that much better than I can.
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Old 07-24-2019, 12:39 PM
 
72,007 posts, read 72,043,164 times
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Quote:
Originally Posted by Lincolnian View Post
We never rented it at all. Only for our own use as a second home intended as a future retirement home. So according to the article I guess we would get the full exemption if we lived there for 2 years.
nooooooo , unqualified use is also a 2nd home ...that is what is was actually put in place for... it was to stop all the 2nd homes from being converted to primary homes after the fact
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Old 07-24-2019, 12:42 PM
 
72,007 posts, read 72,043,164 times
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Quote:
Originally Posted by elnrgby View Post
No, per current law, you can only get the full exemption if you lived at your primary home for 2 years in the 5 years prior to the sale AND it has been your primary home at all times since Jan 1, 2009. Second home is considered a non-qualified use of property, same as a rental property (although for a rental property there is also an additional cost of past depreciation that has to be added to the sale price - which is not applicable to the sale of a secondary home. But tax exemption on capital gain has to be prorated for a second home use, same as for rental use, if you used the property as a second home after 2009, regardless of the fact that you then lived there for 2 last years prior to the home sale).


If you owned your home for X number of years, used it as the second home for Y number of years starting in 2009, then after that used it for at least 2 out of 5 last years as the primary home, your tax exemption on capital gains from sale of that home ($500k for a couple, $250k for a single owner) is reduced by the % of years the home was used as the second home after 2009 (ie, Y number of years), out of 100% time you owned the home (ie, X number of years).


But, as I mentioned in my previous post, tax laws change somewhat frequently, and there is a chance capital gains tax on property sale may change in a more favorable (or less favorable, depending what kind of property) direction in the future....


Sorry, my posts might not be entirely clear (although they are if you read them carefully, and bear with my English as a second language :-). The point is that you have to prorate the $500k/$250k capital gains exclusion if you used a property as a second home any time after 2009, even if you used the same property as the primary home for the last 2 years prior to putting it on the market. That is the current law.
we got killed by waiting one extra year to sell an asset .. the capital gains rate went from 15 to 23.80% for the amount of income we hit , and it was two years before medicare so they counted it towards the max surcharge in premium ..that one year we delayed sucked .
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Old 07-24-2019, 12:56 PM
 
1,743 posts, read 628,445 times
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Quote:
Originally Posted by mathjak107 View Post
we got killed by waiting one extra year to sell an asset .. the capital gains rate went from 15 to 23.80% for the amount of income we hit , and it was two years before medicare so they counted it towards the max surcharge in premium ..that one year we delayed sucked .
But, if I understand correctly, the increase in cap gains tax rate was not due to delaying to sell for one year, but due to other circumstances (ie, your other income was apparently higher in the year in which you sold vs. in the previous year)?


Again re Trump's consideration of inflation-indexing capital gains for tax purposes, the only question is apparently whether he can legally bypass Congress in order to introduce that law. If his legal people can work that out, then he'll go ahead with it. It is not clear whether the $500k/$250k tax exclusion would still remain in place for sale of the primary home (since the purpose of that exclusion is to compensate for inflation) if the inflation-indexed capital gains tax gets introduced. Btw, the generally tax-heavy United Kingdom has actually had inflation-indexed capital gains tax for a very long time!
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Old 07-24-2019, 01:00 PM
 
72,007 posts, read 72,043,164 times
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Quote:
Originally Posted by elnrgby View Post
But, if I understand correctly, the increase in cap gains tax rate was not due to delaying to sell for one year, but due to other circumstances (ie, your other income was apparently higher in the year in which you sold vs. in the previous year)?


Again re Trump's consideration of inflation-indexing capital gains for tax purposes, the only question is apparently whether he can legally bypass Congress in order to introduce that law. If his legal people can work that out, then he'll go ahead with it. It is not clear whether the $500k/$250k tax exclusion would still remain in place for sale of the primary home (since the purpose of that exclusion is to compensate for inflation) if the inflation-indexed capital gains tax gets introduced. Btw, the generally tax-heavy United Kingdom has actually had inflation-indexed capital gains tax for a very long time!
oooh no , it was because we delayed and the new rate went into effect back then . . we had sold in the year the higher rate kicked in. i think it was 2013
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Old 07-24-2019, 01:51 PM
 
Location: Knoxville, TN
1,302 posts, read 604,678 times
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Buy it!!! I bought my house in TN a year before I retired from my job in GA and the biggest problem was worrying about it being empty. It was well-justified worry when the HVAC crapped out during a very cold spell when I wasn't there. Even so, I kept checking the housing market afterward and never did see another house that I would have preferred at the same price point. With a tenant, you are not worrying about an empty house. If it is right, go for it!
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Old 07-24-2019, 02:27 PM
 
Location: NC Piedmont
3,928 posts, read 2,891,269 times
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I am considering doing something very similar but without a specific property in mind yet. I have browsed listings and traded honest emails with realtors letting them know I am interested in this sort of property, possibly as soon as early next year if the math looks right. I am okay with it costing me a little. In my case, it is a very long day's drive but my sister lives about 2/3 of the way there so I can break it up. I will want to visit the area a few times a year for various lengths of time, be able to freely change dates at the last minute and keep some stuff down there. There is a possibility that things could change here and I could move without too much advance planning. Anyway, a place with a good long term renter and an apartment would be ideal; I can probably make the numbers work a lot easier if I initially take the smaller spot.
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Old 07-24-2019, 02:43 PM
 
7,986 posts, read 5,073,457 times
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This may be obvious, but doesn't the whole matter devolve to whether the local market is appreciating? If it is, then benefiting from the extra 2-3 years of price-appreciation seems like a... benefit. But if the market is declining, it would appear to be preferable to wait, would it not?
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Old 07-24-2019, 02:43 PM
 
268 posts, read 135,344 times
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Bought our retirement home in 2013 and retired in 2018. House was located in the SE, we lived in the PNW. Found it on the internet and had family check it out. Paid cash it was a great deal for us. We flew down twice a year for two week vacations. It was a lot of fun and worked out perfectly. I hope yours does too.
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