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05-21-2022, 06:11 PM | #10551 | |
Scooby Guru
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Yup. Welcome to late stage capitalism! Sent from my iPhone using Tapatalk
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05-21-2022, 07:40 PM | #10552 |
Scooby Specialist
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SCIC
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Vehicle:2017 WRX Premium WR Blue Pearl |
I'm not a homeowner but I would like to be one sometime in the next 5 years or so. Sadly the way things are right now seem pretty ****ed.
There's also a ton of foreigners buying properties in the U.S. just to have them (oftentimes for their kids to live in when they send them off to college here) and they just sit completely vacant for years. I'm talking Chinese/Middle East type money where they don't even rent it out because the money is insignificant to them. Just another thing that just takes away from available housing supply for actual individuals who would actually use those homes immediately and as their own. |
05-22-2022, 09:35 AM | #10553 | |
Scooby Newbie
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1. Buy a house to keep your cash out of their home country and in a tangible asset that will likely appreciate over time. 2. Many situations involve laundering of $$$. I know many people in situation #1 (mainly Eastern Asians, but am friends with Saudis who accumulate home and rent them out). Most rent them out to make additional $$, but I do know of a few that sit empty and have a gardener come buy once a week to tend to the property. But even my Canadian friends are parking their cash in homes versus stocks / funds etc. I see this trend increasing. |
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05-22-2022, 11:19 AM | #10554 | |
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The foreign Chinese buyer situation is interesting: within China the average citizen who has to work for their money, has very few decent domestic long term investment options. They have a stock market but most citizens consider it unreliable to park their money long term due to the fickle Ness of their govt. An industry they were investing their money on yesterday, could suddenly be banned by the CCP tomorrow, ie their domestic video game/tech sector. So real estate is the only real dependable long term growth investment. Problem is a lot of the Chinese real estate market is a dangerous bubble/pyramid scheme propped up by worthless home developments built by the lowest bidder contractors in large ghost towns where nobody lives or works, and the building quality is absolute garbage making them time bombs. But for most average Chinese citizens of average means this is what they got. Now Chinese with ACTUAL money, very often with indirect/direct ties to the CCP know investing within the country is utter horse**** and if the other shoe drops and the State decides they want to roll back and seize total control of the citizens assets, they're hosed in terms of wealth possession so it becomes of game of moving as much of their money and wealth outside of the country as much as possible, which includes foreign real estate purchases (in stable countries) of any kind and other material goods (luxury exotic cars) etc to park as much of their money beyond the reach of the CCP. I'm sure a similar scheme is in play with wealth foreign nationals of other countries who can basically snap up our limited real estate inventory with all cash offers. |
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05-25-2022, 01:28 PM | #10555 |
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Member#: 92634
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RMIC
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TIL that 0 fee, 0% APR (x promo months) balance transfers are still a thing, even in this current rate environment. I don't carry balances month to month, but I'm going to shunt my current month's statement to this--assuming they want someone like me--and invest more instead.
(otherwise this would be a month where I withdraw from my slush fund, as several one-time expenses hit, namely half of the Hawaii shared rental house for July, the garage epoxy job, and who knows what else exactly) edit: ended up doing this, with Union Bank as ESL was region-limited. Proved to be good timing with the market! Free money and avoiding the downturn works for me in exchange for a transient credit score hit. Last edited by shikataganai; 06-27-2022 at 06:47 PM. |
05-25-2022, 02:16 PM | #10556 | |
Add Lightness
Moderator Member#: 13699
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05-26-2022, 08:56 PM | #10557 |
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Well, some good news: Ally is raising their HYSA APY to 0.75% effective tomorrow. Second increase this month, since on May 10th they raised it from 0.50% to 0.60%.
Yes, I know, they're just raising it due to the fed raising rates and inflation is still outpacing these meager increases by far...but it's better than nothing, I guess? |
05-26-2022, 08:56 PM | #10558 |
Scooby Specialist
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Join Date: Jul 2016
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Vehicle:2017 WRX Premium WR Blue Pearl |
Well, some good news: Ally is raising their HYSA APY to 0.75% effective tomorrow. Second increase this month, since on May 10th they raised it from 0.50% to 0.60%.
Yes, I know, they're just raising it due to the fed raising rates and inflation is still outpacing these meager increases by far...but it's better than nothing, I guess? |
05-27-2022, 07:31 AM | #10559 |
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Redneck Bank (internet version of All America Bank) is 0.85%
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05-29-2022, 01:48 PM | #10560 |
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Member#: 22218
Join Date: Jul 2002
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Location: University of Florida
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Did a check in on Fund Rise using some throw away money every two weeks (about $200 now, increased it from $100). It's been about 1 year with them. $5575.12 invested after fees. Total value of account at $6223.73; so about $648 in gains or 10%. Not bad Obama.
chris619 dr_wheel Full_Clip wished his thrown away investment in crypto was doing that well. |
06-27-2022, 05:27 PM | #10561 |
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Member#: 6837
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Location: Elbow deep in parietal cortex.
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This could go in the real estate thread, too, but I think it's more appropriate here. I'm just looking for some outside perspective on our situation.
Wife and I have a house (purchased for 177k, probably worth about 235 now based on comps) that we're moving out of to live with her dad, who needs a little bit of help. We still owe about 105k on the house. It's an an extremely desirable stable neighborhood. We're trying to decide whether to rent out our house, or just sell it. Renting, we don't need to upgrade much. The house is in good shape, but we haven't upgraded much, so it's still a late 90s shiny brass fixture builder grade extravaganza. Selling, we think we'd want to spiffy up some items, but the realtor who we purchased her dad's house with wants to buy it (she hasn't seen it yet to make an offer, but it would be an easy transaction as-is). We're not super handy, so repairs would be handled by others if we rented it out. We'd pay for mowing/upkeep if we rented it out. We should be able to clear the mortage by a couple of hundred each month by doing so. OTOH, a pile of cash in hand to grow so we can GTFO of this red state and retire to CA (still 15+years out) sounds nice, too. WWOTD? We keep going back and forth on it, and it might be that either decision is okay, I just want some input from you nerds who are better at this kinda thing. We don't have any debt other than the house, and we put away a little more than 20% annually into 401ks and Roths. We will not be paying mortgage at her dad's, just dealing with the pool (I'm still trying to get the cost per swim below $100 #poolnoob ). |
06-27-2022, 05:31 PM | #10562 | |
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If you're not handy you'll be paying pros to fix plumbing, electrical, etc. What's the insurance on a rental? Much higher than what you pay now? Remember you pay taxes on ALL the money you take in. Not just the profit. |
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06-27-2022, 05:48 PM | #10563 | |
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My concern is: If we rent, the RE market will collapse and our tenants will suck and the house will fall apart. If we sell, the market will continue to rock and we'll have left money on the table. Last edited by taxcider; 06-27-2022 at 05:55 PM. |
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06-27-2022, 06:00 PM | #10564 |
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Location: Colorado
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Does the area have something that draws tenants? If so that's a plus towards renting, if not a big con as you could very easily have a large amount of fallow months in between leases.
If you are only clearing mortgage by a couple hundred then once you factor in other expenses such as insurance, maintenance you might be closer to break even than anything. I encourage you do look up CAP rate and then calculate for your property. Not trying to dissuade you as having monthly rent coming in is a wonderful thing, just go in eyes open. |
06-27-2022, 07:13 PM | #10565 |
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Member#: 1910
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I've been playing with this too, kinda. Our house is very desirable because of the school system etc. My daughter graduates next year so we're not really "invested" at that point and would like to move someplace with a lake that I can paddle around. We're considering buying a "vacation" home that we would live in most of the time as both my wife and I are fully remote. The variable here is income tax. Where we live there's none but property tax is killer. If we officially change address to Maine all of a sudden we have to pay income tax. We're not sure where to go with this. I could definitely rent the house but I'm not sure how much of a pain in the ass that will be.
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06-27-2022, 07:28 PM | #10566 |
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The key factor is distance. How far away would lake house be?
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06-27-2022, 07:34 PM | #10567 |
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Location: CO
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06-28-2022, 09:16 AM | #10568 |
Scooby Newbie
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06-28-2022, 09:26 AM | #10569 |
Scooby Specialist
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Join Date: Feb 2007
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Location: Lynchburg, VA
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If you look at the house as a break even, then you are still accumulating wealth via the house itself. I'm with the other guys, be realistic on the income. Expect the house to be empty a month here or there between tenants (which can impact your cash flow). Expect things to break, which will eat into your cash flow. Expect to have to paint/repair/replace items between tenants.
If you rent it, make sure it's clean but don't update. Even the best tenants will **** up your new stuff. Being a landlord who has to deal with listing/screening/contracting/coordinating sucks. You didn't mention if you all will remain local or if you're relocating to wherever the dad is. But you'll lose 10-15% a month if you involve a mgmt co. IME, IMO, YMMV |
06-28-2022, 09:53 AM | #10570 |
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Pigs get fat, hogs get slaughtered. I'd sell and realize your gains while you have some.
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06-28-2022, 10:52 AM | #10571 |
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Join Date: Feb 2009
Location: MI
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Some interesting opinions in here.
1 - keep it and rent it - Others have mentioned this, what kind of financial situation would this put you in and what risk level are you looking to have? Think longer term than the next 2-3 years, what kind of issues do you think might pop up in the next 10-15 if you held on to the house. 2 - sell it and take the money - What are you going to do with the cash in hand if you sold? Do you get some other benefit by going to live with the father (ie: no rent/mortgage, etc). 3 - You could pull a shika and rent it out to AirBNB. Not related to the house but you mentioned your desire to move to CA in 15ish years. Do you plan to rent or buy? Just looking at cost of living increases and what your nest egg could balloon to, you might see most of your retirement funds being used to pay for housing at that time. |
06-28-2022, 10:58 AM | #10572 |
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Seriously. Only a crazy person would retire here given cost of living. Unless you're rich you'd better move here ASAP so you can afford to stay.
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06-28-2022, 05:50 PM | #10573 |
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Vehicle:18 Outback on the road.... |
Yeah, that is typically the reverse route of retirees.
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08-11-2022, 04:42 PM | #10574 | |
Scooby Specialist
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Join Date: Jul 2016
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Location: Anaheim
Vehicle:2017 WRX Premium WR Blue Pearl |
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The current plan is to throw $10K of that in I Bonds and stash the remaining $14K in an HYSA for now until I decide how risky I want to get with it, and how much of it I want to throw into the market. I'm getting 1.8% APY on my SoFi account right now. Surprisingly I don't miss the car at all, I had a lot of fun with it but it felt like a waste to have two cars when me + the fiance both WFH and barely drive anywhere. Also saves me $70/mo on our car insurance |
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08-11-2022, 08:25 PM | #10575 |
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taxcider,
A few things worth considering for your house to do numbers to base your decision on. If you can't bring in at least 1% of the house's value per month, sell. So if $700k, $7k a month. You really, really don't want to give up that $500k cap gains exemption for some rent money. You get to capture depreciation and other things on your taxes while renting. Yay! If later you sell after 5 years, you lost that $500k in exemption and you have to pay depreciation recapture. Boo! Having someone else manage the rental can make things easier. Not easy. Easier. I rented my house out while in grad school 700 miles away. Manager was 10%. When the new renter came in, the old one "gave" them the heating oil. Only I had filled the heating oil for the renter with the agreement they fill when they leave. Only one of many problems I had to deal with while paying the manager. Home values can go down. It did for us. We left in the middle of 1987 and were back January of 90. We sold this house in 92. We could have sold the house in 87 for $150k (3 agents gave us higher sale numbers). Got $125k. |
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