only morons "brag" about renting ....they don't understand investing. Sure the economy will have it's lows and eventually housing will drop to a new low ....but it's a 12 year cycle. My grandpa always said "God isnt making any more land". Housing will ALWAYS make you money, but it may be a long term investment.
Stay or sell, home related
- Thread starter Crimson2v
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In order to afford another home we would have to use all the profit towards the purchase price. Also I thought you couldn’t use the gains you make on a house for anything but rolling it into the next without having to pay capital gains tax.
The need to roll the money on your personal house is a pretty old rule. You now get an exemption of 250 per person 500k married filing joint if you meet the time tests. With that you can walk way with 250/500 in gain and not have to pay tax.
there seems to be a lot of those in here
We just spoke to our accountant and they verified that we can do pretty much whatever we want with the funds and not pay taxes. We would definitely role it into the next one but that’s great about not having restrictions on what you can do with your gains off of a house.
I'd move. I wouldn't want to live near a dump or sewage treatment plant.
I think there will never be a one size fits all when it comes to renting versus owning. There are way too many factors. I see it as a balance of time in house, ability and risk.
Time in house- I think this is the biggest factor. If you have a job where you move every couple of years it might make more sense to rent. Short term renters won’t care if the housing market tanks or if the air conditioner takes a dump in the first year, after you put all of your savings into the down payment. If you short term owned (knowing you will move in a few years) you would just be paying interest on it (because your first few years of payments for a mortgage go mostly to the interest) and the house is subject to a drop in the market and repairs. Long term renting doesn’t seem like it has many benefits for me, but I’ll explain where it works for others when I explain ability. Long term owning is where owning really shines. If you find an area where you want to raise your kids and you know you will stay, you will be able to lock in a payment for 30 years. Think about that. While inflation is doing its thing, your first payment and last payment will be the same.
Ability- I’m pretty handy and I have the ability to fix most things that come up. I remodeled my kitchen, both bathrooms, irrigation system, landscaping, painting and drywall. This has really saved me money through the years. If you are handicapped or just can’t do anything, renting makes more sense.
Risk- can you take the risk if the property goes down in value if or when you decide to sell? Can you take a risk not being able to afford rent when you’re in retirement because the price of everything has skyrocketed?
Also, I saw tax being brought up and I don’t think it should. My tax guy said my home didn’t hurt or help me, and renters are paying the owner’s tax bills.
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Landfill! SELL SELL SELL. The one in a neighboring town destroyed the local housing market in a 15 mile radius.
Yep, I've done this a couple of times. I'm a contractor too. I can buy all materials through the company, on my books apply to a closed out account, and write off the materials that way. I end up with a tax deduction for investing in my personal home.
Hope you don't get audited, that is tax fraud.
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Probably but it will never be brought anywhere. Tough one to prove for little gain. IRS tosses easily proven cases often because they either don’t appeal to a jury or are worth so little to deal with.
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Most likely. But get catch the right guy wanting to move up and they can become a pain in the ass.
Even if I was audited there would be no way to prove it. There is no way to track or identify materials.
No, not at all how it works there. If an IRS ci brings a crap case the attorneys and his bosses won’t appreciate the waste of time.
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Worked in a firm that dealt with alot of criminal stuff, after they got caught, I have seen people in jail for less.
Maybe our rual area has nothing better to do compared to you being in Boston.
Also being a pain in the ass doenst mean he would go to jail. But could decide to open more years to see if they can get a higher penalty and interest amount.
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most loans you only need 5-6 percent down conventional ...400k X 6% thats 24k ...not sure why you would put down 100k on the house. unless the debt to income is too high, in which case you should not be buying that price range. For capital gains, that only applies if you have lived in the home for under a year. If you live in the home for 1 year and 1 day, you avoid the capital tax.
If you don’t put down at least 20% the mortgage companies put PMI on the payment. Before we had that removed on our loan we were paying 80 bucks a month for PMI. The houses around here are very expensive. Most are starting in the 300’s and around me they are in the 400’s. So coming from a mortgage payment that we have now to a 350k mortgage is a big jump, the money from the sale of the house would have to go to a down payment to prevent PMI and just to keep a low payment.
Not all Lenders charge PMI. Mine doesn't.
PMI is no big deal. You can always re-fi and get that removed. $80 is nothing lol switch to streaming TV that saves you $150 right there. To me it makes more sense to invest that down payment money. Or use it to buy a rental property. But I don't know your numbers lol. Just ask the lender if you can get away with 5-10% down. They might not even charge you pmi.
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