Get the hell outta here...

GymB said:
Consider selling and buying 2, one to rent. The most appreciation seems to happen below $500k anyway.
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What would be ideal is a loan using the current home for collateral that would allow me to buy a new house outright and then owe on the old place/rental property. That way if the bottom drops out our home is still paid for and the rental home can be sacrificed.
 
My wife and I still own a 2 bedroom/ 2 bath house in a suburb of San Diego. It's only 1000 square feet. And, it's damn near touching the house next door. There is a 12ft wide concrete sidewalk and a wooden privacy fence between them...

It was built in 1972 and it was purchased new for $17k. In 2014, my wife and I bought it from the original owner for $333k. Right now, zillow says it's worth $840k.

I'm not telling y'all this to brag. I'm agreeing with you all that these home "values" are nonsense and freaking insane... How can a tiny house double in value 49 times in 52 years?

I don't own it outright. I'm still paying on the mortgage. I think we should sell it right now, but my wife refuses. I see dollar signs. She sees sentimental value. "That's where our kids took their first steps, blah, blah, blah..."

I guarantee you, if she ever does agree that we can sell it, that'll be the day that California falls into the ocean and we lose it all... Haha.
 
1) the problem with house valuations is trying to replace what you sold by buying something equivalent.
2) whenever the tax values are adjusted, (and for the record I think this sort of tax should have bureaucrats and politicians hanging from lamp posts) you should have the option to force the govt. to write you a check and sell them the property for that value.
 
And the worst part about any and all of it is even after paying so much for a roof over the head you still don't own nothing. And have to keep making "tax" payments to keep it. At any point big brother decides he needs what you got worse then you do he will reach down from his big chair and take it. Your house, your land, your bank account and any damn thing else he sees fit to confiscate for the cause. There might be a payoff there might not. Depends on how bad they want it.
 
noway2 said:
1) the problem with house valuations is trying to replace what you sold by buying something equivalent.
2) whenever the tax values are adjusted, (and for the record I think this sort of tax should have bureaucrats and politicians hanging from lamp posts) you should have the option to force the govt. to write you a check and sell them the property for that value.
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I thought the problem was being charged with fraud by the ny ag šŸ¤”

Best make sure you dont overvalue that property...
 
Timfoilhat said:
What would be ideal is a loan using the current home for collateral that would allow me to buy a new house outright and then owe on the old place/rental property. That way if the bottom drops out our home is still paid for and the rental home can be sacrificed.
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Mortgage rate is much higher on the investment property, and it isnā€™t protected in bankruptcy like your primary residence. Not telling you what the best answer is, I donā€™t know, depends on what down-side you want to prepare for. We owned a rental place for a while, it sucked, but we did make money.

One other thing to think about is depreciation on the rental property. If you buy a place to rent the math is easy (basis is purchase price) but if you put your current home into a rental program I think you can only depreciate the amount of the original purchase price.

Gain on sale of personal residence is tax exempt, at least up to $1mm.

Iā€™m really thinking that you want to sell, lock in the tax-free gain, and then buy a new rental property that you depreciate to shelter ordinary income. Mortgage the new primary residence.

Lots to consider.
 
noway2 said:
whenever the tax values are adjusted, (and for the record I think this sort of tax should have bureaucrats and politicians hanging from lamp posts) you should have the option to force the govt. to write you a check and sell them the property for that value.
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Theyā€™ll just halve the valuations and double the tax rate. They always win - they control the game.
 
Me. said:
It canā€™t.

Something that costs $17,000 whose value has doubled 49 times now has a value of $9,570,150,000,000,000,000 (Nine quintillion, five hundred seventy quadrillion, one hundred fifty trillion dollars).


The house has doubled in value less than seven times. Still a great return!

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"Doubled" was the wrong terminology. I shouldn't have said that word.

But you know what I mean...

It is now worth 49 1972 17 thousand dollar houses.
 
GymB said:
Mortgage rate is much higher on the investment property, and it isnā€™t protected in bankruptcy like your primary residence. Not telling you what the best answer is, I donā€™t know, depends on what down-side you want to prepare for. We owned a rental place for a while, it sucked, but we did make money.

One other thing to think about is depreciation on the rental property. If you buy a place to rent the math is easy (basis is purchase price) but if you put your current home into a rental program I think you can only depreciate the amount of the original purchase price.

Gain on sale of personal residence is tax exempt, at least up to $1mm.

Iā€™m really thinking that you want to sell, lock in the tax-free gain, and then buy a new rental property that you depreciate to shelter ordinary income. Mortgage the new primary residence.

Lots to consider.
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I appreciate the wisdom. I knew the loan interest wouldn't be ideal but hadn't given the rest of it enough thought. You're right. Maybe it's time to get serious about shopping for two places.
 
Alabamacoastie said:
My wife and I still own a 2 bedroom/ 2 bath house in a suburb of San Diego. It's only 1000 square feet. And, it's damn near touching the house next door. There is a 12ft wide concrete sidewalk and a wooden privacy fence between them...

It was built in 1972 and it was purchased new for $17k. In 2014, my wife and I bought it from the original owner for $333k. Right now, zillow says it's worth $840k.

I'm not telling y'all this to brag. I'm agreeing with you all that these home "values" are nonsense and freaking insane... How can a tiny house double in value 49 times in 52 years?

I don't own it outright. I'm still paying on the mortgage. I think we should sell it right now, but my wife refuses. I see dollar signs. She sees sentimental value. "That's where our kids took their first steps, blah, blah, blah..."

I guarantee you, if she ever does agree that we can sell it, that'll be the day that California falls into the ocean and we lose it all... Haha.
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My wife and I have family friends in San Diego, he is a retired navy captain, they are old enough to be our parents They had a house on Yonge Street near Nimitz, about a mile and half or so from Ocean Beach. He bought their house in the 70s for $35K, sold it about 3 or 4 years ago for $1.1 million, now valued at $2 million. It was a great little house, we'd stay there when we would visit.
 
I suspect that what is driving the housing costs up are investors buying house holding them for a few years and then sell them. That was happening in CA when I left 20 years ago. It drove prices up so much that your average family could not afford a house.
 
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Bought our 2300sqft house on 1.5 acres just inside the Wake county line in 2018 for 290k. We've put another 90k into it fixing it up and removing dozens of trees to make the property usable. The new valuation in 445k, a nice increase but not phenomenal.

The house we sold for 640k is now worth 930k. Crazy!
 
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The house behind me is being renovated. They did a gut job and have added a second story. They will have a lovely view of us sitting on our the patio on summer afternoons drinking beer.

They probably bought that 1100 sq ft house for around $180,000. How much are they pouring into it? No idea but construction isn't cheap. So they will end up with a hugely expensive property surrounded by 1951 vintage brick veneer homes worth in the $450K range. Their new home value, probably close to $900,000.

It doesn't make sense to me
 
Supermatch said:
Even second time home buyers. My house will sell for more than double what I bought it for, and that still puts me several $100k shy of buying the home I want to have in NC, which would have been a piece of cake prior to the COVID market surge.
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This. We are / were close to retiring and wanted to move out of the RDU area to a less "frantic" location. Even though the so called 'value' of our house has hit crazy numbers, buying another home would mean having to come up with at least another $50K after costs just to get back into a similar / slightly less SqFt.

Oh and try finding a one level, or something with at least 1-2 bed rooms on the first level. Also no lot apparently is bigger than .2 acre unless you are willing to go $800K+.

You know this is going to end badly for a lot of people, you just don't know when it's going to end badly. Although I suspect soon, very soon.
 
If we could do this now.... I would sell and get a smaller house on a bit more land in the eastern part of the state, somewhere within 45 minutes or so of the coast. There are deals to be had.
 
Timfoilhat said:
We're passively looking for a 2300-2500 sf home with a first floor master suite. It kills me to think about spending $600k to get it, and worse I don't want a mortgage payment again. We want to keep our current house since it's paid off and would give us income going into retirement.
Of course, we could sell it and move right now, but that would derail the retirement income.
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Not questioning your thinking, but with the current "environment" for landlords and some of the new "laws" being proposed for landlords restricting rent increases, evictions, etc. I would think the "risks" part of the equation is getting larger by the day.

I have a couple of rental houses now in nowhereville I'm looking to get out of as it's become a bigger headache than I want to deal with.
 
And while I'm thinking of it, how are the insurance rates in your area? Mine are just going up every day it seems, and "replacement costs" on the house go up every time some Yanqui over pays for a shotgun shack in my hood.

It's not just the taxes that are going to force people out due to the costs.
 
LesBaer45 said:
Not questioning your thinking, but with the current "environment" for landlords and some of the new "laws" being proposed for landlords restricting rent increases, evictions, etc. I would think the "risks" part of the equation is getting larger by the day.

I have a couple of rental houses now in nowhereville I'm looking to get out of as it's become a bigger headache than I want to deal with.
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Yeah, your putting "laws" in quotes isn't lost on me. The covid mess had them ruling by decree, law had little to do with it....so yeah, I'm aware.
 
LesBaer45 said:
And while I'm thinking of it, how are the insurance rates in your area? Mine are just going up every day it seems, and "replacement costs" on the house go up every time some Yanqui over pays for a shotgun shack in my hood.

It's not just the taxes that are going to force people out due to the costs.
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It's all your fault (not you in particular). If you didn't make this place so nice no one would want to move here.
 
Just looked at new construction in Granville Co. $1.25 million asking price. Small 23 hse subdivison, acre lots, well and septic and no real storm water infrastructure so basically ZERO county services. With Granville Co's high as a Georga pine tax rate, the estimated monthly property tax and insurance would be...$1200 per month. Thats more than I ever paid for mortgage, insurance and taxes for the last 30 yrs. INSANE!!!
 
"You'll own nothing and be happy."

Funny how everyone keeps complaining about all these $ problems, but act like it's a conspiracy when the elites tell you exactly what they're going to do.
 
The place my wife found yesterday has a bidding war underway. We politely excused ourselves. Didn't expect that in this market.
 
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I moved here 20 something years ago from a suburb of St. Louis Missouri. As a kid it was all farmland around us and it turned into nothing but subdivisions when I moved away. I am now seeing the same trend here in NC.
 
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