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I honestly don't know why more retirees don't move. Missing family? It would be literally cheaper to fly back from Florida every two weeks to visit.
Here in Sussex County it seems like every other house is for sale, or just abandoned. People can't sell their homes with the high taxes that go with it. I'd love to get out of this state but can't.
That's not the whole story. If you could rent for $1,000 or buy for $400,000 with 8,000 a year property taxes, is it still better to buy? Interest rates are going up. Which means property values should be coming down.
It may be better to invest funds in alternative assets if property values are grossly overpriced and property taxes are rape.
That's the key!! Where in NJ, except really really south NJ in the boonies, can you rent for $1000 in a decent area?
We sold and moved to FL 15 months ago, I hate it and spent 2 days on line pouring over rentals.
The county I lived in, that I would like to return to, Morris county, for a 1 bedroom bare bones apt, meaning no washer/dryer in suite cheapest I could find that had available units was $1500 a month.
Forget buying again, as you said in an earlier post, it would be cheaper to fly home to visit every other month.
Soooo my game plan is yes to move from Florida but to Georgia or one of the Carolinas.
That's not the whole story. If you could rent for $1,000 or buy for $400,000 with 8,000 a year property taxes, is it still better to buy? Interest rates are going up. Which means property values should be coming down.
It may be better to invest funds in alternative assets if property values are grossly overpriced and property taxes are rape.
Just because interest rates are going up does not mean that property values will go down, specifically in certain parts of NJ. It may price out certain people, but a high percentage of homes in Nj are cash transactions.
That's not the whole story. If you could rent for $1,000 or buy for $400,000 with 8,000 a year property taxes, is it still better to buy? Interest rates are going up. Which means property values should be coming down.
It may be better to invest funds in alternative assets if property values are grossly overpriced and property taxes are rape.
We're talking about real world NJ living, not a hypothetical. Let me know where you can find a decent place to live here if you have a family for $1000/mo. I already acknowledged that renting is cheaper if you just look at your monthly payment. But if you look at the big picture, buying is the better use of your money in the long term for the reasons I previously explained.
When you buy a home you're investing with mostly someone else's money (the mortgage lender), yet you keep all the returns. In your example, a $400k investment in real estate only requires $80k of your money up front. Somebody else assumes 80% of the risk. You don't get that benefit in any other alternate investment. And your 15-20% capital gains tax is not deductible. Your property tax is. Also, when you sell your house, all your capital gains are tax free (up to $500k). Lastly, everyone needs a place to live, so buying a home is more than an investment, it's providing a necessity. Interest rates are indeed going up, but any northern NJ homeowners in close proximity to NYC will be always be in great shape in the long-term. NJ is the most densely populated state in the country. The laws of supply and demand dictate that real estate investment is always a safe bet here.
Quote:
Originally Posted by arrieros81
You can actually deduct a portion of your rent on the NJ tax return; the part that goes toward property tax if I remember correctly. Not a lot, but it's something.
I like having money for liquidity purposes outside of a single investment. Most of the people I know who own houses seem to have everything tied up in the value of the house itself with not much left over for other savings.
If you're talking about the homestead rebate, Christie suspended that years ago. And when we did have it, I was getting a measly $50 back every year when I was renting. And if most people you know have no liquid assets while owning a home, that means they bought more home than they can realistically afford. It's what we call being housepoor. You can't blame that on home ownership in general. You blame it on the poor decision to live above one's means. My wife and I just bought the second home we've ever owned and still have at least 2 years of living expenses in cash on hand. So buying homes obviously never cleaned us out. My opinion is that at a minimum one should have a year of mortgage payments left over in reserve after buying a home. If not, save until you do have the much left over after you buy.
Just because interest rates are going up does not mean that property values will go down, specifically in certain parts of NJ. It may price out certain people, but a high percentage of homes in Nj are cash transactions.
Agreed. These guys are making the mistake of equating property being pricey with being a bad investment. Not so. There's a feeding frenzy for housing in Essex, Hunterdon, Morris, Bergen, and Hudson counties because of the proximity to NYC. Unless you you live in a hell hole, you're going to see good appreciation no matter what over the long term. I'd add shore counties like Monmouth and Ocean to that safe bet list.
By the time I retire, I'll either have my house paid off or will have enough equity to buy a retirement home in a lower cost state in cash. Either way my monthly housing costs will be minimal in retirement. Meanwhile, lifelong renters will continue to pay a huge sum each month for housing on a vastly reduced income. I'm playing the long game.
We're talking about real world NJ living, not a hypothetical. Let me know where you can find a decent place to live here if you have a family for $1000/mo. I already acknowledged that renting is cheaper if you just look at your monthly payment. But if you look at the big picture, buying is the better use of your money in the long term for the reasons I previously explained.
When you buy a home you're investing with mostly someone else's money (the mortgage lender), yet you keep all the returns. In your example, a $400k investment in real estate only requires $80k of your money up front. Somebody else assumes 80% of the risk. You don't get that benefit in any other alternate investment. And your 15-20% capital gains tax is not deductible. Your property tax is. Also, when you sell your house, all your capital gains are tax free (up to $500k). Lastly, everyone needs a place to live, so buying a home is more than an investment, it's providing a necessity. Interest rates are indeed going up, but any northern NJ homeowners in close proximity to NYC will be always be in great shape in the long-term. NJ is the most densely populated state in the country. The laws of supply and demand dictate that real estate investment is always a safe bet here.
If you're talking about the homestead rebate, Christie suspended that years ago. And when we did have it, I was getting a measly $50 back every year when I was renting. And if most people you know have no liquid assets while owning a home, that means they bought more home than they can realistically afford. It's what we call being housepoor. You can't blame that on home ownership in general. You blame it on the poor decision to live above one's means. My wife and I just bought the second home we've ever owned and still have at least 2 years of living expenses in cash on hand. So buying homes obviously never cleaned us out. My opinion is that at a minimum one should have a year of mortgage payments left over in reserve after buying a home. If not, save until you do have the much left over after you buy.
it's line 37a on the nj 1040. 18% of your rent gets deducted as property tax paid. Not the homestead rebate.
LOL. Some of the responses to this thread reminds me of the 2007 real estate bubble.
Housing is a great investment, just not in New Jersey. So many other places to buy with better CAP/ROI rates.
I agree that $1,000 a month for a family of four is unworkable. I was thinking more along the wife and I, and investing residual cash in 401k retirement\IRA and possible investment property in... Florida!
It does not make sense from my point of view to buy anywhere in New Jersey. For a family of four or more where rent will be much higher for a decent place... maybe.
LOL. Some of the responses to this thread reminds me of the 2007 real estate bubble.
Housing is a great investment, just not in New Jersey. So many other places to buy with better CAP/ROI rates.
I agree that $1,000 a month for a family of four is unworkable. I was thinking more along the wife and I, and investing residual cash in 401k retirement\IRA and possible investment property in... Florida!
It does not make sense from my point of view to buy anywhere in New Jersey. For a family of four or more where rent will be much higher for a decent place... maybe.
$1000 for a family of one is just about unworkable.
It doesn't make sense for you to buy in NJ? The most densely populated state? Doesn't that tell you something?
$1000 for a family of one is just about unworkable.
It doesn't make sense for you to buy in NJ? The most densely populated state? Doesn't that tell you something?
Typically people who say stuff like that fail to realize or point out that there are clearly some very good reasons why people live here, despite cons that people will point out as if it's hopeless and stupid to live here. I'll be the first to say that our property taxes for example are ridiculous, but sometimes people talk about NJ like it's so unpopular and not worth it.
My county alone (Union, a small county) almost has more people than the entire state of Wyoming. Sure, Wyoming is cheaper, but who the hell wants to live there? What's there to do, what amenities compared to here? Clearly there is a reason my COUNTY is nearly more populated than an entire STATE.
Usually the ones I see who complain about how expensive it is here are usually the ones who cannot or can barely afford it. Those who live just fine here know it's expensive, but it doesn't matter as much as long as they can live comfortably and enjoy what being in NJ has to offer. Maybe they'll move once they retire or when their kids are done with school, but for now they live here just fine and don't complain, because they don't have to. It's all relative.
If it's not generating a positive cash flow, than it's a liability and not an asset, therefore a 1 family home (other than a rental property) is not an asset nor an investment but a necessity and therefore a liability.
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Those who live just fine here know it's expensive, but it doesn't matter as much as long as they can live comfortably and enjoy what being in NJ has to offer. Maybe they'll move once they retire or when their kids are done with school, but for now they live here just fine and don't complain, because they don't have to. It's all relative.
