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So we finally sat down and did a calculation; we also talked to agent on two homes that we could potentially buy. After deducting property tax (11k; Greatwood), we will basically make 9k less a year in Houston, after tax. So, after deducting property tax and state tax, we could make 57k in Houston, vs 66k in LA. It seems like a no brainer now? Yes, LA is expensive, but I don't think I would spend all 9k just on gas and other expenses?
So we finally sat down and did a calculation; we also talked to agent on two homes that we could potentially buy. After deducting property tax (11k; Greatwood), we will basically make 9k less a year in Houston, after tax. So, after deducting property tax and state tax, we could make 57k in Houston, vs 66k in LA. It seems like a no brainer now? Yes, LA is expensive, but I don't think I would spend all 9k just on gas and other expenses?
Your math is waaaaaaaaaaaaaaaaay off. If you care to, and you don't have to, put the numbers on here and we'll go through them. I've been a derivatives trader for 15 years so analyzing numbers is kind of my strength. If you don't want to, fair enough. I can tell you right now, you are definitely miscalculating. Take that for what it's worth.
Sure.
TX: 90,000 - Yearly SS and Fed tax = 68800 - Parking at work ($1500/year) - Property Tax ($12,000/ year; Greatwood, 400k house) = 57,000
CA: 120,000 - Yearly SS/ Fed/ CA Tax= 72,000 - Property tax ($5000/year; 450k house) = 66,000 - The only think I think the actual number is closer to 70k but just want to downsize the amount.
Sure.
TX: 90,000 - Yearly SS and Fed tax = 68800 - Parking at work ($1500/year) - Property Tax ($12,000/ year; Greatwood, 400k house) = 57,000
CA: 120,000 - Yearly SS/ Fed/ CA Tax= 72,000 - Property tax ($5000/year; 450k house) = 66,000 - The only think I think the actual number is closer to 70k but just want to downsize the amount.
What do you think?
Sure. So you keep saying "we" so I assume you are married so I'm going to use the joint filing tax rates. I'm also going to make note that your choice of housing falls under "qualitative" data and not "quantitative". What this means is that is a seperate debate since you are buying two completely different homes of different quality that has to be analyzed separately. For example, saying if I live in CA I'll drive a Porsche and if I live in Houston I'll drive a Honda accord and then make a comparison. They are not the same cars. But anyway, I digress.
So here we go. At that income level you are paying an extra 25% in federal taxes above and beyond the Houston income level of 90k. So the way I'm going to do the math here is to assume you did the math right on Houston up to 90k and simply take the difference in the extra CA income. I'll walk you through this in detail.
We take the difference in income between 90k and 120k which is 30k and we take 25% of that in extra federal taxes. That is 7500. We also take 12k in state income taxes. That's a rough estimate as I believe CA uses a progressive scale but it's close enough for government work. So 12000 plus 7500 is 19,500 above and beyond the total tax for Houston. So you came up with 22k roughly in taxes for TX. So we add 19,500 to the 22,000 to get 41,500 in total taxes for CA. I'll assume your parking and property taxes are also correct. So for CA we have 120,000 - 19,500 -1,500, - 5,000. So that gives us 94k which is higher then your 70k. But....
Why are you using the same price house? You need to understand, that 400k house in Sugar Land is like a home in Beverly Hills. That 450k house in Pasadena is just not comparable and that is what is throwing these numbers off. You should be able to get a 250k home in TX which cuts your property tax bill in half and gives you another 250k in savings. At 250k, your property tax here would be 5k or so saving you 7k off your stated number. So it looks like you came up with about 7k more in taxes in CA then I did. Perhaps you didn't use the joint filing tax rates.
As I stated earlier, the two key price drivers here in this equation are taxes and the house. You pay twice as much in taxes in CA. And the home value, if you make an honest apple to apples comparison, CA will be three times higher then Houston. Your math is off because you are pricing the same price home.
Thanks so much jek74. The reason being, I have nailed down the house I would like to purchase (it really does cost $180/sq ft; 450k for about 2,200 sqft) and that house in Asuza that I have sent the link yesterday.
Thanks so much jek74. The reason being, I have nailed down the house I would like to purchase (it really does cost $180/sq ft; 450k for about 2,200 sqft) and that house in Asuza that I have sent the link yesterday.
But the house in Asuza was not even built. Do you actually know 100% what you are getting? And why the need for a 450k house in Sugarland? I mean I have to admit I'm not a Sugarland expert, but in the Woodlands, where I know home values really well, you can buy a huge home for 300k. For 450k here you would be living like a Saudi Prince. There is no way that home in Asuza is comparable. Years ago I was looking at the Pasadena area for investment property. I looked all over Arcadia, Monrovia, San Marino, South Pasadena, etc and there was nothing of "quality" for 500k or less. I'm serious man. I would love to see a "real picture" of that 450k house in Asuza. I'm not saying I don't believe you, I'm saying make sure you are not getting hoodwinked by a developer. I would not trust anyone in that state. Most 450k homes in that area are honest to God ghetto homes.
You definitely need to come down here and look around first. Why are you contemplating a house in Greatwood?
You said you're single so a 450k house in Sugar Land/Greatwood is meant for 2 parents, 4.5 kids and includes a pool. Do you really need that much space?
Go ahead and waste your money on a new $450k mcmansion in Sugarland that will depreciate immediately. If it were (a single) me and I really wanted a house, a 3/1 in Spring Branch near the I-10 would run you $225k and is in a good position to appreciate. And there are lots of other areas in Houston with that potential.
Better yet, spend $150k - $175k on a doable fixer upper and live in it while you renovate. You can only do these things when you're single!
I think you are wrong on the violent crime. I'll let others chime in here. The thing you need to understand about Houston is that the minority communities are huge, I mean really big. If they were their own city they would be one of the largest cities in the country. And violent crime in those areas are bad. I look at crime reports all the time and rarely do I see violent crime in the nice inner loop hoods or in the nice suburbs. And here in the Woodlands, I think we have had one murder in the last 10 years and maybe single digit in rapes. And there are 120k people here. I suspect Kingwood is similar. Can't say about Sugarland or Pearland.
I'll try to be blunt here at the risk of offending some people. Houston has a lot of illegals. They also have a lot of legal mexican immigrants. Most of these people came to this country with nothing and for the most part, don't speak the language. And many of them, yes many of them, steal. Most of it is petty crime. They steal for food, they steal things they can sell for food. Most of that is in the minority areas or the mixed development areas. These people are not violent for the most part.
In LA it's very different because there is a drug culture there. Yes, there is. And before anyone tells me drugs are everywhere, you have not been to LA. It's epidemic out there. What makes it different in LA is that drugs are not confined to the bad areas. They are in the wealthy and secluded areas as well. And with the drugs comes crime. If you spend some time reading the LA crime reports and look at the crime maps you will be shocked at the number of crimes in places like Beverly Hills, Santa Monica, Burbank, Pacific Palisades, etc. I mean murders, shoot outs, rapes, gang activity, etc. Not just petty crime. There is a difference. I certainly don't want anyone stealing my stuff, but I can deal with that. I have a much tougher time dealing with getting killed. Most people in LA live with this and are OK with it because they are trying to become celebrities. They really have no choice. Believe it or not, many actually leave LA for NY because NY is actually much safer. You really need to research this. This is one of the reasons why celebrities build 15 foot electric fences around their properties and hide their properties behind trees. It's not to keep out gawkers. Like I said before, to live SAFE in LA you are going to need a lot more then 120k a year.
Actually LA is among the safest big cities in the U.S. with crime down to 1950's levels (one of LA's many golden eras when things were Ozzie & Harriet land), and that includes violent crime that have dropped to historic lows, with downtown still with the lowest crime rate for decades, and murders and violent crime down most significantly in the gang and lower income areas that had been the source for the vast majority of crime in Los Angeles. Even former Chief Bratton said it himself and proved it with statistics that vast areas of the city are extremely safe. "It's all about the gangs," he said. And for the most part he is correct. Further, earlier this year the local news media went out to various portions of the city, but most notably in the notorious gang infested, violent crime ridden areas to ask residents there if they have noticed a decrease in crime and feel any safer as the crime statistics suggest. The answer was an overwhelming YES by every person askedin even the most violent crime, gang ridden areas with comments about feeling safe on the streets at night in areas that HAD been controlled by the gangs. The gangs of LA aren't what they used to be. I have to say even I was surprised by the comments of those in the toughest neighborhoods stating the changes was dramatic and they feel safe in their communities and praised LAPD for their successful efforts at reducing crime in their communities. Of course, there are still problems, but not on the scale of most US big cities. If there were just a thousand more cops, LA would be Ozzie & Harriet land once again, but our poor national economic mess was a monkey wrench to that goal being achieved soon, but LAPD is still hiring. Even other crimes such as robbery, across the city are down, with a few districts (the same problem ones) having had a recent jump in burglaries.
And in reference to your Illegals or Mexican crime source theory, riding the Gold Line LRT through the thick of the eastside including legacy problem areas such as Boyle Heights and East LA proper (LA County unincorporated patrolled by LA County Sheriff) is incredibly safe, and far safer than Blue line serving south LA and far more pleasant than the subway, which has too more metals than criminals. The line serving the Mexicans in Mexican gangland the safest and cleanest of all metro rail lines serving known problem areas. So, I don't understand your logic there either.
However, while it is a far, far safer city, especially in the gangland areas, than it has been for nearly 60 years, the LAPD seems too busy or unwillingly to address the smaller petty issues such as merchants brazenly selling bunny rabbits in cages on the sidewalks, which is flatly illegal, but LAPD just doesn't seem to want to allocate resources to that, along with too many people using Handicap Parking Placards illegally that took the news media to motivate the LAPD and DMV to finally do something about it. And yes, there are those times when those dopey clubbers and problem people converge on Hollywood at late night and cause a disturbance just because they can't get along, quickly put under control by LAPD, but what grown adult with a functioning brain is going to be in Hollywood at late night for any reason? Just the clubbers. But violent crime? Not out of hand at all.
Your "drug lifestyle" logic just doesn't make sense. Drugs are in the affluent areas across the country. This is why we have a NATIONAL drug problem. But every big city has a serious drug problem, but some cities just don't like to publicize it (the local news media can't help but sometimes be guilty of mild boosterim themselves and feel their corporate enterprise isn't served by stories of their city's major hidden or just unreported by the media drug scene, especially when they are too busy saying how wonderful and superior their city is compared to others) or discuss it. The mid-west is the crack capital of the world, yet it seems some people still think that only the big coastal cities have a drug problem.
There is a reason why drugs is a NATIONAL epidemic seemingly overwhelming large and small law enforcement agencies throughout the country. However, celebrities are culled from the same heap of human mass, mostly from other parts of the country such as Family Friendly areas of the US, not from the LA area, that has grown up with the post 60's mentality about drugs. The problem is that when a celebrity has a drug problem, it is reported around the world, and associated as only a "Hollywood" problem, but not so for the rest of us or other US cities who can claim virtually no drug problem at all simply because the international press has no interest in reporting about drug nutters who have no name recognition in Kansas City, Dallas, Oklahoma City, or Houston. Hence those cities become imbued with a clean bill of health regarding drugs and crime and family friendly lifestyle. However, I'm glad to here there is no drug problem nor much crime at all in Houston with no place to buy or use drugs and no violent crime and everyone behaving as the Family friendly city that it is, and that drugs have yet to infiltrate the homes and youth of affluent Houston neighborhoods like Kingwood (unfairly annexed I would add). The rest of us need to visit Houston and tour the neighborhoods and learn what to do to be so fortunate as to have Houston's drug problems confined to the rabble that would be an improvement for any city.
The "Hollywood" community is a very small number of people with the entertainment industry being a very small fraternity compared to other industries in the area where everyone, and I mean from actors to crews, knows everyone one else, employing maybe about 16,000 or so people, not counting Arts, Design, Sports or Media, just the TV and Film industry where the celebrities are and accounts for less than 1 percent of the total population and employment. So, that's 16,000 out of a city of 4 million, or out of a county of 10 million or out of a metro area of 15 million. Yes, everyone in LA is or wants to be a celebrity and works in show business. Even if we were to add the business groups I've excluded because they aren't Film and TV, it would still come to about 3% of all employment in Los Angeles. What are those other 97% (or 99% we're talking just Film & TV) of employed people doing here? Don't they know there are only show biz jobs and it is the only industry in the entire city and metropolitan area? They need to realize they will never be famous and just go back home. Just as curious, just how are all those other 99% or 97% employed outside show biz getting by if they don't work in the Film and TV biz? Yes, when the Entertainment Biz was shut down due to a writers' strike, the LA economy lost about $3 billion over the 3 month period of that strike, but the LA economy generates between $250 million and $300 hundred million per DAY. So that loss was made up in what, about a week? However, when the Ports of Los Angeles and Long Beach, (two separate and competing ports adjacent to each other) the largest and second largest container ports in the country, respectively, were recently shut down for 9 days due to a labor dispute and subsequent strike by clerical workers that affected just about every other industry in the region and country, with the ironic exception of the entertainment biz, the LA economy lost $1 billion per DAY. That puts the entertainment biz in perspective.
Please continue to share your thoughts and opinions. I find them very enlightening as I learn how other people view things from their perspective and beliefs. I find your tone to be very civilized and polite and not like the mean posts too often in the Houston forum.
Last edited by HarryKerryJr; 12-27-2012 at 06:53 AM..
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