U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
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.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 05-30-2008, 02:43 PM
 
Location: Forests of Maine
30,669 posts, read 49,416,421 times
Reputation: 19124

Advertisements

Quote:
Originally Posted by Lakewooder View Post
If you buy a home or duplex or whatever with a small apartment, servants quarters or mother-in-law suite you can rent out the main house and stay in the small quarters. If it has a nice garage, all the better...
I have seen a lot of these.

With all due respect, they simply will never pay for themselves.

A tri-plex is the smallest that can possibly pay for itself. Two rental incomes might be able to equal the mortgage, taxes, sewer, garbage.

I have never seen a du-plex that could.
Reply With Quote Quick reply to this message

 
Old 05-30-2008, 02:54 PM
 
16,092 posts, read 36,563,133 times
Reputation: 6272
Well if your utility bills are paid by the tenant(s), you pay cash for the property, etc...I think it can work.
Reply With Quote Quick reply to this message
 
Old 05-30-2008, 03:05 PM
 
Location: Forests of Maine
30,669 posts, read 49,416,421 times
Reputation: 19124
Quote:
Originally Posted by Lakewooder View Post
Well if your utility bills are paid by the tenant(s), you pay cash for the property, etc...I think it can work.
Okay.

The first lesson that I learned about investments, is to never use your own money.
Reply With Quote Quick reply to this message
 
Old 05-30-2008, 03:07 PM
 
Location: WA
5,392 posts, read 21,382,389 times
Reputation: 5883
Quote:
Originally Posted by Lakewooder View Post
... you pay cash for the property, etc...
That cash tied up in the property is a cost to the owner... even at todays low interest rates it can be substantial. My son has a four-plex he rents out and with about $300,000 tied up in the property considers the cost of capital employed at 3%... that represents a cost of $750 a month.
Reply With Quote Quick reply to this message
 
Old 05-30-2008, 03:19 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,527 posts, read 39,903,732 times
Reputation: 23634
Quote:
Originally Posted by MotleyCrew View Post
...Our last home, if we are lucky enough to find affordable land, will probably be 900 square feet. We would love to stay in AZ, ... but not sure how long that will last after the market picks up again. Maybe WA is calling us.
900 SF... perfect... with an unfinished daylight basement for 'guests / projects' (Tho I will have an unfinished main floor, and live in the "daylight basement" since it is taxed at 50% rate of 'main floor' in our area ) I have threatened to rip out the sheetrock and convert my main floor to a hay loft ! I have the same pristine view from the daylight basement. (and quieter for sleeping, cool in summer, ez to heat...)

... AZ has some nice areas in the Mountains, the drawback being so close to CA and folks HAVING to leave CA to flee taxes and regulation.

...I don't think the RE market is headed up anytime too soon... (IMHO... a guess...)

... careful on WA, I think there may be some affordable rural places BUT the tax assessor and county (school) spending habits will dictate if you find it affordable. I pay $12,000/yr taxes on a joint that cost me less than $100k to build. 10x my food budget. Living in a dump, might be an option... (buying a fixer and remodeling the INSIDE, but not the outside... ). Look to all options tho, I imagine there is a way to leverage the value of a house into micro finance to pay your tax burden. It doesn't seem the banks are too interested in loaning $$ at the moment, and I think I can do a better job of screening applicants WA will likely stay pretty 'desirable' as they have as diverse economy, climate, and are quite accessible.

I just returned from a 'sunseeking' trip (and retirement site hunt) to central WA, it was very nice and we stayed in guest homes to get to know locals. Very interesting people and situations, nice areas (Wenatchee / Cashmere). But... I will look harder for bargains in WA near White Salmon and OR near Hood River. The climate is mild 4 season, and proximity to Portland 1 hr max. I really like the healthcare, culture, and transportation options (Small international airport... not MAX) in Portland. Having a beautiful coast within an hr is handy for those 3-5 100F days. + winter storms are fun to watch.

To keep low costs, my LLC's and income property + primary residence (a small apartment or shed, Tee-Pee or travel trailer...low tax; just a mailbox ) will remain in WA state (or WY). I may have a 'cohousing' site 5 mi across the river in OR that generates 0 income, but is self supporting. Food costs are pretty reasonable with fresh markets from Eastern WA and OR within striking distance, and I'll be 'enroute' to their processing in Portland and Vancouver.
Small remote towns in eastern WA and OR have some really low housing costs. These areas are going to be hard hit by both the high transportation costs and the declining housing markets, AND any serious economic problems will be tough on them. If.... you can get by without commuting check them out, some are very cute and friendly, some are pretty 'coarse'. Check out the schools and libraries for a snapshot, and even the bars to get a local flavor of hot issues. Some rural counties enjoy VERY low utility rates ($.027/kw) because they house generation facilities. AND they get fiber optics as a perk!

I perceive another 'rural' exodus when folks can't afford to commute to areas that they prefer to live, but no jobs available there. (I hate to see this as I have a passion for "economically sustainable" small towns). I would say there will be some bargains, BUT do count the costs...such as having to drive 100 miles daily for radiation treatments or some other 'un-foreseen' issue.

Be cautious about building a new home from scratch, our current fee structure (Impact + eco Eval + permitting) and price of materials is prohibitive. Last week a neighbor was looking at $100k just in 'upfront' costs to build a house on a separate adjacent lot. Then there is the well and the "new" septics ($30,000 vs $3000), + approach, + utilities (which YOU now pay for line extensions) Look for a more economical and ecological solution. Fixing a 'beater', restoring a farmhouse, co-housing ... sleeping under a bridge... (where we all may be soon )
Reply With Quote Quick reply to this message
 
Old 05-30-2008, 03:29 PM
 
Location: Utopia
1,999 posts, read 9,440,338 times
Reputation: 1482
I knew a guy who was a physician and a multi-millionaire around 35 years ago who relocated from the Midwest to Sweetwater, Texas, as it was cheap to buy and live there. Talk about frugal! It's about half hour, I think, to Abilene or further. Too way out west for me, buckaroos!
Reply With Quote Quick reply to this message
 
Old 05-30-2008, 04:08 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,527 posts, read 39,903,732 times
Reputation: 23634
Quote:
Originally Posted by cdelena View Post
That cash tied up in the property is a cost to the owner... even at todays low interest rates it can be substantial. My son has a four-plex he rents out and with about $300,000 tied up in the property considers the cost of capital employed at 3%... that represents a cost of $750 a month.
yes !! and what I consider an 'additional' burden on a primary residence when the tax assessor thinks my $100k house (cost to me) is worth $850k (taxable value)... thus I need to get that extra $750 doing something for me, and my friendly / greedy assessor.

so... at the very reasonable 3% rate you are using... I should actually add $1875 / month "cost of capital" to my $1000 / month property taxes when calculating the true costs of my primary residence.. gulp...choke

Forest has the right idea... it is usually much better to NOT use your own $$ to finance endeavors, and I would be wise to get busy looking for a place to put my investment RE $$ I took off the table to get good capital gains rates, AND add my home equity (within reason, of course...) to fund my next investment project. We had this discussion even yesterday while traveling; why it makes SO MUCH MORE sense to have a solid investment property funding your beach stays, than to have your own empty beach house waiting for you to have time to come mow it's grass and fix the shingles. The investment property just keeps pumping out the $$ while your beach house can be a very large vacuum to your bank account.

I guess today I will rest in the fact that, I hope... RE values are decreasing enough to offset the cost of capital I have sitting in cash at the moment. I will write a contractual personal note today to my LLC to create an interest obligation on a piece of bare commercial land that I just paid off. Hopefully it will sell by 2010 to get Capital Gains favored status, then the gain will be offset by this interest obligation... which when paid, will be taxed at my personal rate I better 're-run' the numbers before writing that personal note up. If I can keep my personal income within the 15% tax rate I will have no LTCG obligation in 2010... If I live that long, the creek doesn't rise, and xxx (New President) does not make it his / her / it's obligation to curb this tax holiday. Boy, what fun !! (and people worry about being 'stimulated' in retirement...)
Reply With Quote Quick reply to this message
 
Old 06-01-2008, 01:01 PM
 
Location: Oxygen Ln. AZ
9,321 posts, read 16,572,170 times
Reputation: 5692
hmmm, I am thinking under the bridge.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top