81–90 of 110 posts
"Don't worry millenials! You didn't really want a house anyway, it's a terrible idea! Keep paying those student loan payments and renting!" -- Retired boomer with $1MM+ equity in their suburban California home purchased in 1975 for $10k.
suburban California home purchased in 1975 for $10k
Earlier quoted context omitted.
> I really fail to see how most of those points are relevant when you consider that a home is an investment you can, you know, live in. The alternative would be to rent indefinitely, which apparently we're ok with even though its not just a 0% return on investment, its an infinitely negative percent return on investment. This would only make sense if you want to live in a place indefinitely. When the economy here (Al…
You know what's worse than homes when it comes to investments? Kids! They don't give you any return on investment at all until possibly late in life, depending on your culture and relationship (better hope they stay near you) and they make you a lot less mobile, both in terms of geography and career opportunities. They suck up a lot of your income and they probably shorten your life span due to lost sleep in the earl…
Just don't do it as an investment.
Earlier quoted context omitted.
In the USA, you would face capital gains taxes if your sales basis was greater than your cost basis.
Do I have to pay taxes on the profit I made selling my home? It depends on how long you owned and lived in the home before the sale and how much profit you made. If you owned and lived in the place for two of the five years before the sale, then up to $250,000 of profit is tax-free. If you are married and file a joint return, the tax-free amount doubles to $500,000. The law lets you "exclude" this much otherwise taxa…
up to $250,000 of profit is tax-free
If your profit isn't 6 figures, choose this option carefully.
This is awful analysis. Almost every one of the bullet points is just wrong, or at least terribly spun. I mean, one of them argues that homes are "heavily taxed" when of course they are the source of the biggest single deduction category in the whole budget, another claims with a straight face that the ability to leverage the investment via a (again, government subsidized!) loan is a bad thing! Now, obviously not all…
Mortgage is leverage (debt) and that can be bad. When you buy a house you speculate, to some degree, on the price of the house. I am sure a no-arbitrage condition exists in the housing market so your guess regarding housing prices in 10y is as good as anyone's. Also, the point about diversification is a valid concern. Would you put (50% of your net worth + loaned money) into only FB/AMZN/XYZ stocks, today (tomorrow)?…
Like I said, I actually am on your side that the US obsession with homeownership has led to all kinds of bad externalities with poor urban development and income inequality. I'd support all manner of regulation intended to decrease the subsidy we pay out to the middle class in favor of higher density rental environments.
But houses in all but a few markets are and remain "good investments" by any reasonable interpretation. To argue otherwise is to argue in bad faith. Stop it.
The author makes a few good points, but IMO most others are negated by the two he conveniently skips: 1. Your house is usually generating income (for a rental property) or offsetting the rent you would otherwise have to pay. Saying "you have to pay a lot of taxes" doesn't mean much unless you compare the numbers. 2. He mentions that property value is tied to a specific geographical area (and that's a bad thing), but…
I bought a house in 2015 (at 32) and it was the best thing I ever did. Even though I had to move away, I turned it into a rental property, and it’s earning $380 a month in profit. I’ve been using that profit to pay down the principal and add to my 401(k). My only regret is that I didn’t buy a lot sooner.
I bought a house in 2013 and sold it in 2016 for a total return of probably close to 50% -- not including leverage, after factoring in avoided rents and all costs. If you include the leverage, the ROI was probably >100%. What's more, the cash I invested was at the moment of my investment significant with respect to my net worth -- something like 33%. So this was a great outcome. However, that does not mean I made a w…
Also known as speculation
Earlier quoted context omitted.
Do I have to pay taxes on the profit I made selling my home? It depends on how long you owned and lived in the home before the sale and how much profit you made. If you owned and lived in the place for two of the five years before the sale, then up to $250,000 of profit is tax-free. If you are married and file a joint return, the tax-free amount doubles to $500,000. The law lets you "exclude" this much otherwise taxa…
up to $250,000 of profit is tax-free You get that exemption once in a lifetime . (If you are married filing together, that's once for both parties .) If your profit isn't 6 figures, choose this option carefully.
Are you referring to the over-55-once-in-a-lifetime exemption that was replaced in 1997 with the introduction of the Taxpayer Relief Act? https://en.wikipedia.org/wiki/Taxpayer_Relief_Act_of_1997
Earlier quoted context omitted.
> potentially leading to their bankruptcy Whoa, you have to go bankrupt to stop paying a mortgage in Canada? In the US, these are (in my experience) secured, non-recourse loans. That means that the bank's final option is to take the house, but if they do that, you owe them nothing else.
the bank's final option is to take the house Sometimes not even that , in states with homestead exemption protections.
Earlier quoted context omitted.
I bought a house in 2013 and sold it in 2016 for a total return of probably close to 50% -- not including leverage, after factoring in avoided rents and all costs. If you include the leverage, the ROI was probably >100%. What's more, the cash I invested was at the moment of my investment significant with respect to my net worth -- something like 33%. So this was a great outcome. However, that does not mean I made a w…
> I made a lucky financial decision Also known as speculation