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I understand and agree with the thesis that Californians sold their million dollar homes and moved to places such as Austin, TX, bidding a typical suburban home from $400k to $700k because they could, but who bought all those million dollar California homes? And why did it happen during the 2021-2022 period? For the national (not just some trendy area) median home price to surge by 50% in two years, there’s some massive capital that needs to be mobilized. Where did it come from? Foreigners? Americans with savings? Central bank printing?
I've certainly wondered the same things. If people/corporations are buying up houses to rent, how does the average person even afford the rent on a million+ dollar house? And I get that *some* people are moving away from California and other high COL areas. But so many that home prices nearly everywhere have soared??
I know that for a long time, the general rule of thumb was to expect 4% annual appreciation on a home. I've moved a lot, bought and sold numerous homes. Sometimes we achieved that 4% appreciation, other times we were lucky to break even on our purchase price (not even including seller's costs). Thank goodness we bought our retirement home in 2019. Based on nearby recent sales, our home value is up about 65% since we bought it 4 years ago.
We're doing fine, with no plans to move, but i sure feel bad for the younger people trying to buy a house.
Many people with multiple pieces of real estate keep each one in a separate LLC for legal reasons. Nothing sinister is at play. It has to do with the legal protections of an LLC. Each property stands in its own legal entity.
In my old hood just about every home sale said something like “John Smith to Birch Drive LLC”…
Believe it or not there are numerous buyers who plan on living in the house who set up an LLC to buy it. Apparently there are tax benefits to it, or at least ones that haven't been declared illegal yet. But, the owner can't claim a homestead exclusion, at least here in Maryland, if they own it through an LLC. That nailed a couple people I know when the new assessments skyrocketed their property tax bills.
Believe it or not there are numerous buyers who plan on living in the house who set up an LLC to buy it. Apparently there are tax benefits to it, or at least ones that haven't been declared illegal yet. But, the owner can't claim a homestead exclusion, at least here in Maryland, if they own it through an LLC. That nailed a couple people I know when the new assessments skyrocketed their property tax bills.
If I am not mistaken, the opportunity to claim depreciation on the property lets them kick the tax can down the road for years. Works nicely if you expect a lower tax rate in the future.
Of course, then at some point when the property is transferred, the depreciation will be recaptured.
If I am not mistaken, the opportunity to claim depreciation on the property lets them kick the tax can down the road for years. Works nicely if you expect a lower tax rate in the future.
Of course, then at some point when the property is transferred, the depreciation will be recaptured.
You're more conversant with the process than I am. I just enjoyed listening to them ***** and moan about a 20% per year assessment increase over the next three years, especially because it came so soon after they figured they'd outsmarted everyone. Turned out they only outsmarted themselves.
Many people with multiple pieces of real estate keep each one in a separate LLC for legal reasons. Nothing sinister is at play. It has to do with the legal protections of an LLC. Each property stands in its own legal entity.
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