Canadian Family Moving to Pitt area. Help! (Pittsburgh, Washington: sales, rentals)

[MrSame]

We live in Hinton Alberta. That is north of Edmonton.

Originally Posted by bradjl2009

Welcome to Pittsburgh! I've been to Canada many times and love it there. Could I ask where in Canada you're coming from? Based on your utilities and taxes in Canada, you probably won't experience that big of a shock. At least you will find gas prices to be lower here even though we think they are high.

[MrSame]

Can you explain more on the tax savings for your mtg? Do you not pay income tax on the money you pay your mtg with? And my healthcare is paid by my company.

I like the renting option. We will look into it. I just hate throwing the money away renting when we can buy. We are having a hard time finding new houses in this area. The ones we find are huge. We just want something reasonable (1400-1600 sq ft) but new.

Originally Posted by Sideblinded

Gas is less expensive, health care is more expensive. Huge tax break on income taxes for your mortgage.

I personally would rent in an area you like for a 6 months to a year and get a better grip on what you are gaining and losing in terms of expenses. It will also make you a more savvy home buyer!

And welcome to Pittsburgh!

[Velvet Jones]

Originally Posted by MrSame

Can you explain more on the tax savings for your mtg? Do you not pay income tax on the money you pay your mtg with? And my healthcare is paid by my company.

I like the renting option. We will look into it. I just hate throwing the money away renting when we can buy. We are having a hard time finding new houses in this area. The ones we find are huge. We just want something reasonable (1400-1600 sq ft) but new.

If you own your home you are allowed to deduct your property taxes, the mortgage interest, and private mortgage insurance from your Federal income taxes. There are limits to how much you can deduct, especially since the AMT is now kicking in for more and more people, but this can still save you several thousand dollars a year. If you rent you get no deduction.

[BrianTH]

Of course your landlord does get a deduction for interest and taxes as a business expense. In a competitive rental market, those savings should be passed onto renters, although these days, a lot of the Pittsburgh rental market is pretty undersupplied.

[greg42]

Basically if you own the house yeah, you can knock, say (depending upon your income and thus your tax bracket) something like 25% off your property tax plus interest paid on the mortgage. Since a mortgage is structured so you pay more of the interest in early years this deduction is actually biggest when you are in the early years of paying for the house.

I think renting for 6 months or a year is fine while you figure out where you might want to buy. It's far better than buying and only then discovering you really don't want that neighborhood.

Small houses plus new don't really go together, unfortunately, except maybe in a townhouse. Even 2-child families like yours tend to go into 4BR/2500 sq ft houses when they're buying a brand new one. There isn't a lot of call for brand new 1500 sq ft places around here because it likely wouldn't lower the cost enough to be appealing to buyers. So you might want to find yourself open to something older but solid (this is often better anyway because the new ones are often built less well than old ones) then renovate if you have to, or find one renovated. This becomes another game of numbers, though, as you wouldn't want to put too much extra $$ into remodeling if it would make it difficult to get most of it back out when selling. Older houses certainly don't necessarily mean lesser neighborhoods, etc.

[MrSame]

Thanks for the help. I apprecieate it. I have allot to think about .

[bradjl2009]

Originally Posted by MrSame

We live in Hinton Alberta. That is north of Edmonton.

I see; doesn't Alberta have one of the lower COL in Canada? I think you will find most things a little cheaper here than there.

[Hopes]

Originally Posted by MrSame

Thanks allot for the reply. You might have saved us a ton of money. It's good to know about utilities and taxes being higher. Where we currently live housing is around $500,000 for a 1500 Sqft new house built well and finished nicely. Utilities are $500 per month for gas and electricity. Taxes are $3000 per year. How much of an increase can I expect on utilities and taxes?

Utilities might be similar. (However we do pay for our water and sewage here. My girlfriend said they didn't pay for water in Canada or it was a minimal cost if they did. I can't remember. She is from Quebec.) But property taxes are way higher here.

In Allegheny County, houses for 150k here can pay 4k to 6k in property taxes depending on township. For a 500k house, taxes are 11k to 13k. I used Mt. Lebanon as a reference for Allegheny County on a real estate website to get these estimates.

In Washington County, where Peters Township is located, taxes on a 150k house are between 1k to 2k. For a 500k house, taxes are 8k to 9k on a 500k house.

I looked these up on the Howard Hanna real estate website because that website lists estimated property taxes.

Don't trust your realtor. Do your homework if you find a house you like. If they know you are moving from a high cost of living area, they'll take advatage of you. You can research other homes in the area on the real estate websites. Look for comparables---houses for sale for similar price and see if you are buying the same amount of house for the money for a particular township.

You can also check the Allegheny County Real Estate Assessment website and see how much the house was bought for last time it was for sale. Keep in mind that our property values don't rise quickly here. This is a stable housing market, not a boom/bust market. As a result, don't think it's reasonable that a seller is askine for 200k over what they bought the house for 5 years prior.

You can't use the Allegheny County Real Estate Assessment site to estimate your property taxes because that site only shows the County property taxes, not the local school property taxes, which vary by school district to school district.

[Hopes]

Originally Posted by gameguy56

Hopes... You forgot Upper St. Clair!

In fact, I would say that Upper St. Clair, Mt. Lebanon, and Peters Township are all really excellent school districts in the South Hills. The major difference between the communities is how much of a walkable "town" feel you want. Mt. Lebanon is a full service little village with a trolly stop and a nice little downtown area. The homes are going to be older though. Peters has the newer homes but not much in the way of a real town center. Upper St. Clair is somewhere in between.

I did forget Upper Saint Claire probably because my BIL lives there.

Regardless, taxes will be significantly higher in USC and Mt. Lebo compared to Peters Township.

And Peters has the newer housing developments, which means more young families with children.

Peters is close enough to the shopping mall in USC and Mt. Lebo's town center for them to enjoy all the shopping they want.

[MrSame]

No, Our COL is quite high. It really depends where in Alberta you live. We live in a very high area

Originally Posted by bradjl2009

I see; doesn't Alberta have one of the lower COL in Canada? I think you will find most things a little cheaper here than there.