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Old 11-04-2011, 08:03 PM
 
Location: Not Moving
970 posts, read 1,704,123 times
Reputation: 500

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Quote:
Originally Posted by tomocox View Post
And who do you think pays for the listed items? Did you just come in from an OWS meeting?

The landlord pays every item you listed plus makes a profit above his/her cost.
The federal tax law still allows home OWNERS to deduct the amount of interest paid from their annual income before multiplying the new "adjusted" amount by a percentage.

Easiest example I can offer. My son-in-law bought a townhouse two years before he married my daughter. He paid $88,000 then sold it for $89000. You think he lost money after paying a Realtor and other closing costs? No he didn't. He didn't make any, but he actually broke even which meant he lived free for two years.

Sorry, I don't know who you learned from, but they either lied, or they didn't know the facts.
Tom....Oh thank goodness! I've been waiting for your response. You are absolutely 100% correct. As someone who owns some rental properties, those costs are definitely passed on to the renter.....duh. This is what most people don't understand.


It's different if you know you are living somewhere very short term, or are checking out a city and whether or not you want to live there.
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Old 11-05-2011, 05:16 AM
 
Location: downtown phoenix
1,201 posts, read 1,677,610 times
Reputation: 1932
Quote:
Originally Posted by tomocox View Post
And who do you think pays for the listed items? Did you just come in from an OWS meeting?

The landlord pays every item you listed plus makes a profit above his/her cost.
The federal tax law still allows home OWNERS to deduct the amount of interest paid from their annual income before multiplying the new "adjusted" amount by a percentage.

Easiest example I can offer. My son-in-law bought a townhouse two years before he married my daughter. He paid $88,000 then sold it for $89000. You think he lost money after paying a Realtor and other closing costs? No he didn't. He didn't make any, but he actually broke even which meant he lived free for two years.

Sorry, I don't know who you learned from, but they either lied, or they didn't know the facts.
this is nonsense. in no way did he live free after selling for 1000 bux more than his buying price. the 1000 dollar profit doesn't even come close to covering any closing costs, taxes, title insurance or home inspection.
he lost money, guaranteed. I know the "facts" that realtors, bankers and mortgage lenders want you to believe, and the fact is he lost money on this deal. not to mention his monthly payment and any upkeep on the property. I just do not see how you can say he lived for free.
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Old 11-05-2011, 05:37 AM
 
Location: Louisville KY Metro area
4,824 posts, read 13,551,790 times
Reputation: 2145
Quote:
Originally Posted by kytoaz View Post
this is nonsense. in no way did he live free after selling for 1000 bux more than his buying price. the 1000 dollar profit doesn't even come close to covering any closing costs, taxes, title insurance or home inspection.
he lost money, guaranteed. I know the "facts" that realtors, bankers and mortgage lenders want you to believe, and the fact is he lost money on this deal. not to mention his monthly payment and any upkeep on the property. I just do not see how you can say he lived for free.
Kytoaz, you need to take a course in accounting. Yes, in fact he did. The refunds on his income taxes plus his $1000.00 covered his costs. So, I won't argue with you as you are speaking without knowledge of information that I have.

Now, let's get back to the cost of renting. I have a house in downtown LaGrange. If I rent it to you, I will collect an annualized monthly paid rent that is greater than the annualized costs of ownership plus a profit. Now, I have paid a fixed amount for the house and upgraded it. This is a one time expense. It's fixed. Each year that I own it, I will need to pay taxes and insurance, plus do certain maintainence, and repairs. I'll also pay interest on the loan we took out to purchase it. Now, you decide to rent it from me. Let's say you "start" renting it from me for $1000.00 per month. At that rate, I don't make very much money, so why do I do it? Well, if things go as they have for the last 200 plus years of American history, I will be able to raise your monthly rent while keeping my fixed costs forever fixed. Assuming I manage well, I likely will see a cash flow (profit) of several thousand dollars per year over the lifetime of my ownership.

This is money, the home occupant could have had if they actually owned the house rather than paying rent.
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Old 11-05-2011, 07:26 AM
 
Location: Charlotte, NC
25,716 posts, read 37,583,188 times
Reputation: 37453
There are some of us who dont mind fattening a landlord's pockets in exchange for the mobility that can be had with renting. If I rent in a neighborhood goes downhill you at least have some way to get out fast. If I want to move to another city for a job opportunity I can take the hit on the deposits and be totally done with the place. I may be throwing $400 a month down the toilet every month for rent but the fact that I can pick up and move at any time gives me peace of mind which at this stage you can't put a price on.
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Old 11-05-2011, 08:12 AM
 
Location: Not Moving
970 posts, read 1,704,123 times
Reputation: 500
Quote:
Originally Posted by Alanboy395 View Post
There are some of us who dont mind fattening a landlord's pockets in exchange for the mobility that can be had with renting. If I rent in a neighborhood goes downhill you at least have some way to get out fast. If I want to move to another city for a job opportunity I can take the hit on the deposits and be totally done with the place. I may be throwing $400 a month down the toilet every month for rent but the fact that I can pick up and move at any time gives me peace of mind which at this stage you can't put a price on.
And, there is nothing wrong with that. You are still young, and mobile, and not committed to a certain place yet. I did the same thing when I was young.

But, if you do decide to settle somewhere for a lenghth of time, buying may be the better option which is the point Tom is trying to make. And the idea that when you rent you don't pay taxes, etc. is false.
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Old 11-05-2011, 09:33 AM
 
4 posts, read 6,511 times
Reputation: 10
We chose Highview because of cost, commute, a two year old home, and a 6 month lease. It gives us a place to figure out which area exactly we want to be in. We like the Highlands, we like St. Matthews, we like Anchorage and anything near The Summit. And, we like Oldham County. We have too many options that we can't make a decision on in two weekend visits we've made to Louisville.
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Old 11-05-2011, 02:00 PM
 
7,021 posts, read 15,210,985 times
Reputation: 3444
Quote:
Originally Posted by Philnjill96 View Post
We chose Highview because of cost, commute, a two year old home, and a 6 month lease. It gives us a place to figure out which area exactly we want to be in. We like the Highlands, we like St. Matthews, we like Anchorage and anything near The Summit. And, we like Oldham County. We have too many options that we can't make a decision on in two weekend visits we've made to Louisville.
If you want to be complete you should also look at the Indiana side of the metro, including Floyds Knobs and the Charlestown Rd at I-265 exit. Some nice homes for cheap over there.

Also, do not leave out areas like Beechmont, Germantown, Clifton, and especially, Crescent Hill.

Downtown, Old Louisville ,and Butchertown and not quite yet to the point that I would recommend a family move there, but they are getting there and certainly are great areas for singles and alternative lifestyle people seeking more diversity.
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Old 11-05-2011, 03:15 PM
 
Location: downtown phoenix
1,201 posts, read 1,677,610 times
Reputation: 1932
Quote:
Originally Posted by tomocox View Post
Kytoaz, you need to take a course in accounting. Yes, in fact he did. The refunds on his income taxes plus his $1000.00 covered his costs. So, I won't argue with you as you are speaking without knowledge of information that I have.

Now, let's get back to the cost of renting. I have a house in downtown LaGrange. If I rent it to you, I will collect an annualized monthly paid rent that is greater than the annualized costs of ownership plus a profit. Now, I have paid a fixed amount for the house and upgraded it. This is a one time expense. It's fixed. Each year that I own it, I will need to pay taxes and insurance, plus do certain maintainence, and repairs. I'll also pay interest on the loan we took out to purchase it. Now, you decide to rent it from me. Let's say you "start" renting it from me for $1000.00 per month. At that rate, I don't make very much money, so why do I do it? Well, if things go as they have for the last 200 plus years of American history, I will be able to raise your monthly rent while keeping my fixed costs forever fixed. Assuming I manage well, I likely will see a cash flow (profit) of several thousand dollars per year over the lifetime of my ownership.

This is money, the home occupant could have had if they actually owned the house rather than paying rent.
I owned 17 rental properties at one point and have been through 30+ real estate closings. I am not a realtor, broker or accountant, but i think i know enough about the industry to stand behind my statements.
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Old 11-05-2011, 06:08 PM
 
Location: Louisville KY Metro area
4,824 posts, read 13,551,790 times
Reputation: 2145
Quote:
Originally Posted by Alanboy395 View Post
There are some of us who dont mind fattening a landlord's pockets in exchange for the mobility that can be had with renting. If I rent in a neighborhood goes downhill you at least have some way to get out fast. If I want to move to another city for a job opportunity I can take the hit on the deposits and be totally done with the place. I may be throwing $400 a month down the toilet every month for rent but the fact that I can pick up and move at any time gives me peace of mind which at this stage you can't put a price on.
Yes, that is a good reason to rent, but it will leave you with nothing when you old and needing a roof over your head for a long time, but then there might be subsidized government housing....
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Old 11-05-2011, 06:12 PM
 
Location: Louisville KY Metro area
4,824 posts, read 13,551,790 times
Reputation: 2145
Quote:
Originally Posted by Philnjill96 View Post
We chose Highview because of cost, commute, a two year old home, and a 6 month lease. It gives us a place to figure out which area exactly we want to be in. We like the Highlands, we like St. Matthews, we like Anchorage and anything near The Summit. And, we like Oldham County. We have too many options that we can't make a decision on in two weekend visits we've made to Louisville.
Philnjill96, if you don't mind bouncing your kids from one school to a second to a third, then you have made a wise decision. Rent for six months, just as you have indicated, but check the consequences of a third school for your children. Just know your options.
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