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"10-8" posted:Yep, it's a lie. I'm a tax attorney, and no, he can't deduct the mortgage interest. Being a tax attorney, maybe you can answer me this. I am purchasing a new home and shorting my current. Is there any way that I can claim the shorted as principal for 1099 purposes (bush tax law) since the transactions will happen quite near each other?
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May 1, 2011 18:39
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TraderStav posted:Being a tax attorney, maybe you can answer me this. I am purchasing a new home and shorting my current. Is there any way that I can claim the shorted as principal for 1099 purposes (bush tax law) since the transactions will happen quite near each other?
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May 1, 2011 23:54
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Yeah, it's not a 1031 exchange, which is mostly to offset some of the tax burdens of gaining on selling an existing property. The nuance of most things being taxable when you sell and gain is what tripped me up before - nothing happens when you lose in an investment really.
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May 2, 2011 01:51
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I'm thinking of buying a condo in Santa Monica in LA. I have pretty much zero experience and this will be my first buy if I decide to go for it and continue. I have about 90k saved up for a down payment. According to Zillow and my family income level I guess my max would be 400k for a home though it'd be pretty tight especially if it hit something like 450k. So far there's about 2-3 listings on Zillow ranging from 390-450. Haven't actually done any legwork let alone check them out yet. I heard rumors how buying now would still be a horrible idea. Santa Monica still seems pretty stable though still extremely expensive. Sound stupid? Should I just not even look in this or possibly aim for Culver City? Should I continue renting? I actually wouldn't mind Venice but holy gently caress housing is oddly even more expensive.
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May 2, 2011 09:27
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"10-8" posted:I don't quite understand what you're asking. You're going to have a basis in your new home equal to the amount you paid for the new home. You also have an entirely separate basis in your current home equal to the amount you paid for your current home. You can't stack the two, if that's what you mean. I am sorry, I should have been more specific. Being a short sale, if I am issued a 1099 I will need to pay taxes on the forgiven amount. Under the bush debt relief act, if it's your principal residence, you do not have to. This is the tax I am speaking to. I am unclear on the mechanics of the reporting and didn't know if they looked at occupation on the day of, or merely the year, etc.. If there was a way to make the transaction and avoid the tax, it would be supremely helpful!
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May 2, 2011 11:22
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Buckwheat Sings posted:...According to Zillow ....
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May 2, 2011 17:30
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"Jorath" posted:Just FYI, when I was buying last (~6 years ago) Zillow prices were a complete joke for many properties in my area (SF Bay Area). Your area may differ. I would start looking at the MLS, as that's going to show you at least what people are actually asking, even if it doesn't tell you what they sold for. Still butkis.
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May 2, 2011 17:33
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Buckwheat Sings posted:I'm thinking of buying a condo in Santa Monica in LA. I have pretty much zero experience and this will be my first buy if I decide to go for it and continue. I have about 90k saved up for a down payment. According to Zillow and my family income level I guess my max would be 400k for a home though it'd be pretty tight especially if it hit something like 450k. So far there's about 2-3 listings on Zillow ranging from 390-450. Haven't actually done any legwork let alone check them out yet. e:Also, use Redfin. It's amazing. e2: Just skimming Redfin listings and craigslist apartment rentals, the rent/buy balance seems to be far in favor of renting. gvibes fucked around with this message at 17:50 on May 2, 2011 |
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May 2, 2011 17:38
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Buckwheat Sings posted:I'm thinking of buying a condo in Santa Monica in LA. I'll just add a few points that you probably already know about, but didn't mention. When figuring how much you can afford, condos are different from single-family houses. Be sure to account for the additional cost of the condo fee/HOA fee on top of your mortgage, insurance, taxes, maintenance, and utilities. Be sure to give yourself some margin, since condo fees can go up at any time. If you are paying less than 20% down, you also need to account for PMI (mortgage insurance), but with 90k for your down payment you can avoid that on anything up to 450k. gvibes is asking some other questions that are really important, though. Houses and (even moreso in my opinion) condos/townhouses are not good "investments" when compared to other traditional investment options (mutual funds, bonds, etc.). Instead, home ownership can be a good or bad idea mostly depending on your life situation. You should assume that you will own for at least 8+ years. Many people would say 10+, some would say 5+. Since there is a large transactional cost for buying and an even larger one for selling (minimum 6% of the sale price when you sell), that gives you time to accumulate principal and, with some luck, see the property value crawl upwards by something approaching that amount. So; are you going to be happy with living in Santa Monica for the next decade? Will you be OK with the amount of space you'll be buying? Things like your job, marital status, desire to have kids, etc. all factor in here. You'll be burdened with a monthly mortgage, so it will be harder to take a few months off work for a hiatus, take advantage of a career option that involves moving to a different city, suddenly expand your family, etc. Condos add to that. You'll probably not have a garage space where you can work on a car. You'll have neighbors you cannot choose, that you'll hear all the time above/below/next door. There will be a HOA/owner's association that will be dominated by busybodies and retirees with nothing better to do than make stupid rules about what you can't do with your property. On the upside, you will have less maintenance to do yourself; no lawn to mow or yard to weed. When the roof leaks, everyone will pay for it via the condo fees. And um... that's all I can think of that could be considered an advantage for condos vs. houses, sorry. (I hate condos.)
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May 2, 2011 18:04
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As an owner of a condo, I can verify everything Leperflesh says about them. In my case, it really doesn't feel like I own it because of all the imposed rules about what I can do with it. I actually have a related question about this. My fiancee and I are in the process of purchasing a house, and I'm left with the decision of what to do with my condo. I want to sell it but my agent is advising me to rent it out because of all the recent short sales that will be used as comps driving the price down. I did some math, and it looks like if I sell, it'll be a wash with any profits I make being used for closing costs. If I rent it out, I'd be in the red about $400/month. I'm thinking of just washing my hands of it and selling it now rather than rent it out and take a loss each month, hoping that the market will turn around to eventually make a profit in 1-2 years. Goons, tell me what to do.
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May 2, 2011 21:28
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Thank god that you can escape that condo without having to pay money at closing and get the gently caress out of it your realtor is the same as every other one who believes we will be magically back at bubble prices in 2 years for no reason.
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May 2, 2011 21:41
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jerkstore77 posted:As an owner of a condo, I can verify everything Leperflesh says about them. In my case, it really doesn't feel like I own it because of all the imposed rules about what I can do with it. I actually have a related question about this.
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May 2, 2011 21:47
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Arzakon posted:Thank god that you can escape that condo without having to pay money at closing and get the gently caress out of it your realtor is the same as every other one who believes we will be magically back at bubble prices in 2 years for no reason. Yeah, I really want to just get rid of it, but it doesn't have to get back to bubble prices for me to make a modest profit. Bubble prices for it were about $300k and I thankfully bought it before this happened. Currently, the balance of my mortgage is at $166K and the appraised value of units similar to mine were about 190-200K (which I'm ok selling at) before the recent short sales. I'm just worried about how much these short sales will affect my sale price.
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May 2, 2011 21:47
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jerkstore77 posted:Yeah, I really want to just get rid of it, but it doesn't have to get back to bubble prices for me to make a modest profit. Bubble prices for it were about $300k and I thankfully bought it before this happened. Currently, the balance of my mortgage is at $166K and the appraised value of units similar to mine were about 190-200K (which I'm ok selling at) before the recent short sales. I'm just worried about how much these short sales will affect my sale price. Get an appraisal. It'll cost a chunk of money but probably won't be more than like $400. Then you'll know exactly how much those short sales affect the appraised price.
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May 2, 2011 22:13
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It isn't worth the headaches of being a landlord for the potential "returns" you're looking for, sell right now, don't look back and keep running.gvibes posted:Sell. No reason to hold onto a significantly cash-flow negative property. Condos are an incredible liability with the once-touted benefits now exposed as not applicable for almost every community, I'd almost say a timeshare is a better option if you have that kind of money to blow. I consider the extra I pay over owning to be the right to walk away from the property within a set period of time.
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May 2, 2011 23:21
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gvibes posted:Why do you want to buy? How long are you planning on living in this place? How stable is your job? How stable is your family situation? We like the area and want a more permanent residency. We actually have even more saved up but it's more in the realm of investments, emergency, etc. I actually plan on living in Westside LA for the next twenty years. Job is pretty stable and my entire industry is in this area. Family is stable. I'd actually rather go for a normal house but seeing how the averages are still in the loving ridiculous ranges, I don't see that happening. It'll be worth looking into though as I've only been concentrating on condos currently. I tried Redfin as well as Ziprealitoy and actually found a place a bit more Westside for only 220k(lol I know). The rent I currently pay is 1350. I'll continue the search and heck I'm not even sure if this is a good time to buy anyways. House sales still suck rear end. Leperflesh posted:Stuff Thanks for this.
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May 3, 2011 00:17
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Buckwheat Sings posted:The rent I currently pay is 1350. Woaaah. You're talking about an enormous increase in what you're paying for your home, over $1350. Even for that $220k house, you're going to increase your costs substantially. quote:Thanks for this. You're welcome!
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May 3, 2011 00:25
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Leperflesh posted:Woaaah. You're talking about an enormous increase in what you're paying for your home, over $1350. Even for that $220k house, you're going to increase your costs substantially. Well I'm guessing it'd be about 1600-1800ish right? If they have some crazy condo fees then ugh. If it's nuts then I might as well forgot it and just wait it out. Heck it might be just worth looking for a bigger rental. vvv--That's what the website listed too but I thought he knew something secret about it like land tax. It wouldn't be that much more than what I currently pay in rent. Buckwheat Sings fucked around with this message at 00:58 on May 3, 2011 |
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May 3, 2011 00:30
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Leperflesh posted:Woaaah. You're talking about an enormous increase in what you're paying for your home, over $1350. Even for that $220k house, you're going to increase your costs substantially. With no down payment, the P&I on a $220,000 30-year mortgage at 5% would be $1181 per month. With a $70,000 down payment, he's looking at a monthly payment of $805.
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May 3, 2011 00:52
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Rusty Shackelford posted:With no down payment, the P&I on a $220,000 30-year mortgage at 5% would be $1181 per month. With a $70,000 down payment, he's looking at a monthly payment of $805. Property taxes and HOA could easily be upwards of $800 - $1200/mo though on a condo in that price range depending on where it's located. We are talking about a condo here right? My townhome HOA and property taxes combined are more than my P&I, P&I is about 42% of my total monthly payment. Leperflesh posted:Woaaah. You're talking about an enormous increase in what you're paying for your home, over $1350. Even for that $220k house, you're going to increase your costs substantially. With a sizable down payment like the above poster mentioned, he could be looking at ~$800 for P%I, maybe a $300 HOA payment, and possibly ~$450/mo property taxes (conservative 2.5% estimate) - $1550, and I would consider this a best case scenario. The real question is if you're going to consider buying a condo, why not just rent? Hell it's like the same thing minus the headaches of home-ownership. The Shep fucked around with this message at 01:12 on May 3, 2011 |
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May 3, 2011 01:03
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Cmdr. Shepard posted:Property taxes and HOA could easily be upwards of $800 - $1200/mo though on a condo in that price range depending on where it's located. We are talking about a condo here right? Holy gently caress why are condo fees so high? Upwards to $800-1200 is just bonkers. Do you have a private gym or something? You're right, might as well rent if it's shitloads more than just renting in the first place. It's near Pico and 29th and oddly doesn't have the condo fees listed so that might be the hitch. Buckwheat Sings fucked around with this message at 01:22 on May 3, 2011 |
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May 3, 2011 01:19
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Sorry for the crosspost, but I think newbie finance was the wrong place to ask. I know, do NEVER buy, but: So my wife (married 11 months now) has a silly amount of student loans because she went to medical school without being loaded (her mistake). Let's round it to 400k. The highest rate is 8.5% for around 60k, then another 100k or so at 8.25. We're paying it off without problem, but we also want to save for a house. Given that we both have good credit and current loan rates are around 5% (apparently?) should our excess income go towards student loans in order of highest interest rate first, and just make sure that we save enough to have a tiny down payment? Or should we shoot to have more cash for a house, aiming for 20%? We can't deduct interest from taxes. I figure the best way is to just barely have a down payment when we are looking to buy a house in 4-5 years, and put everything else towards the crazy interest rates.
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May 3, 2011 01:29
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$800 condo fees are ridiculous. When looking for potential places in San Francisco a while back, we found one place with fees that high and it included a butler and a personal driver.
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May 3, 2011 01:38
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Cmdr. Shepard posted:Property taxes and HOA could easily be upwards of $800 - $1200/mo though on a condo in that price range depending on where it's located. We are talking about a condo here right? Realistically he'd probably be paying 300-400/month in HOA dues plus about 250/month in property taxes. Still, that would push the payment from 800 to 1350 on the low side. 220k for a condo in Santa Monica or nearby is ridiculously cheap, I'd be worried about issues with the condo or the management if anything.
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May 3, 2011 01:41
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Shipon posted:To interject - California's general property taxes are capped at 1%, and even with additional bond payments, the average property tax rate is most likely around 1.2-1.4%. Turns out it wasn't listed correctly and is actually an auction which is tons of fun. I went to one in Burbank and I swear to god I think there were plants in the audience trying to bring the price up.
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May 3, 2011 01:59
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Bozart posted:Sorry for the crosspost, but I think newbie finance was the wrong place to ask. I know, do NEVER buy, but: Pay off the student loans, then save up a down payment. I'd recommend, before purchasing, pay off the debt, get a 3-6 month expense cushion for your emergency savings, save up 20% for house, then buy a house.
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May 3, 2011 02:41
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Shipon posted:To interject - California's general property taxes are capped at 1%, and even with additional bond payments, the average property tax rate is most likely around 1.2-1.4%. Holy jeez... Well that's great for you guys, but I guess it only helps balance out the property costs? Taxes on my townhome are over 4%, and I'm on the low end for my area (Chicago burbs). I've seen tax rates as high as 5.5% on some properties, and it's usually because when property values plummeted over the past two years, tax rates (taxable value?) stayed the same. I've talked to the assessor, they won't do jack poo poo about it, so welp. And earlier, I was talking about HOA fees PLUS taxes, not just HOA fees. I would consider $300 a typical HOA Condo fee, that's probably not as regionally affected as property tax rates.
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May 3, 2011 02:57
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I was also including insurance (which in CA should include earthquake insurance, which often costs as much or more than the general insurance policy even though it's only catastrophic coverage), and utilities (which I guess in a condo may be absorbed into the condo fees?). Also, I was mostly talking about the $450k he was originally mentioning as his ceiling. At that price, P&I plus insurance plus fees plus taxes (plus utilities?) is gonna be something well over $2k a month. Without doing the math I'd guess closer to $3k. In CA the state-level property taxes are indeed capped at 1% (the infamous Proposition 13), but that shifted a lot of the governmental tax burden onto counties and cities. There are a lot of local bonds and school assessments you pay. 1.2% would be pretty low. In some places it's over 2% (Oakland for example). $800/mo for condo fees sounds fairly high, although I suspect they scale with the property prices to some degree, but $600 is probably pretty common. $300-$400 would be on the average side of things, depending on area. Santa Monica is an affluent area where the cost of living is quite high, so that's why I'm guessing (just a wild-assed guess) that $500+ for condo fees could be the norm. e. I decided to poke around and see if I could find the average tax rate in Santa Monica. The LA county website has a tool that lets you click on properties and see what they sold for/are assessed at, and it looks like a hell of a lot of the recent sales of condos in Santa Monica were at $700k+. Anyway you can click through to the assessor's office, enter the parcel number and click "info only" and see what the recent tax bills were for any property. Leperflesh fucked around with this message at 19:05 on May 3, 2011 |
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May 3, 2011 18:32
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I'd like some advice for the future of my property. I don't really have any experience and bought the place pretty young (22.) I've had it for almost exactly one year now and its a 10 year mortgage. I bought the house with seller financing at 6% for 75k but only financed 65k after putting 10 down. I rent out my guest house for $500 plus utilities and I have a roommate in the actual house who I cap at $300/month. At this point I really only pay the taxes and insurance on it as the base mortgage payment is ~725/month. Do I just sit on it? Would I sell it if/when the market recovers or should I keep renting it out. I guess a lot of this is speculative but I'm still curious.
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May 4, 2011 01:44
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UFO posted:I'd like some advice for the future of my property. I don't really have any experience and bought the place pretty young (22.) Given that you actually live there, and already own the place, I don't really see a whole lot of upside in moving. I mean, you aren't that far cash flow negative, and you're living there.
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May 4, 2011 02:41
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In direct disregard of the advice of this thread, we're buying a new house for 320k. We're netting 109k from the sale of our current home and putting 80k (25%) down on the new house, holding back the rest for reserves + repairs. So we'll be carrying a 240k mortgage at what should be 4.625%, which we can afford on my salary alone -- my wife's salary (at a relatively new job) isn't being taken into account with regard to the loan. The concern is that we live in Texas, land of high property taxes. At the inception of the loan, 1/3 of our monthly payment will go toward taxes and insurance. This proportion will just increase over time as Texas continues to try and fund itself via property taxes. In our current house, we don't escrow the taxes or hazard insurance, and just keep the tax money in an account. Question is: any reason why we shouldn't opt out of escrow with the new house and just collect the money for property taxes in a savings account? That is, any reason besides our not actually putting aside this money and having a shortfall at tax time? Separating out the mortgage payments from the taxes/insurance appeals to me because I can more properly direct my anger toward the state.
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May 4, 2011 03:13
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You should be fine doing your own escrow as long as you have the financial ability to actually do it. Not many folks can actually manage to put 750 a month away in a savings account. My house was only 160K so I'm assuming your property taxes will be double mine, which will put you around 700 to 750 a month or so. Yeah, the property taxes suck, but no state income tax is pretty nice. It really evens out to be honest. We're paying less in property taxes here in Texas than would we be back in Arizona with state income tax and property tax on a comparable home.
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May 4, 2011 04:38
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Seventyfour posted:In direct disregard of the advice of this thread, we're buying a new house for 320k. We're netting 109k from the sale of our current home and putting 80k (25%) down on the new house, holding back the rest for reserves + repairs. So we'll be carrying a 240k mortgage at what should be 4.625%, which we can afford on my salary alone -- my wife's salary (at a relatively new job) isn't being taken into account with regard to the loan. I live in Texas and I handle the absurd property taxes with my own savings account- it works pretty well for me.
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May 4, 2011 05:08
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greasyhands posted:I live in Texas and I handle the absurd property taxes with my own savings account- it works pretty well for me. Every list I've looked at doesn't even show Texas in the top 10 for property taxes in the nation. What is considered absurd down there?
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May 4, 2011 05:58
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Cmdr. Shepard posted:Every list I've looked at doesn't even show Texas in the top 10 for property taxes in the nation. What is considered absurd down there?
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May 4, 2011 06:50
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Cmdr. Shepard posted:Every list I've looked at doesn't even show Texas in the top 10 for property taxes in the nation. What is considered absurd down there? 3%, which seems silly to me, but I grew up in the south where it's usually <1%. I know it gets really ridiculous in new england. It's worth adding that Texas has no state income tax, so it evens out assuming you work. I pay around 4% of my income in property taxes every year and considering my income isn't taxed at the state or local level otherwise it's really pretty reasonable, but it hurts thinking about writing a $500 check every month just for property taxes. Cmdr. Shepard posted:Every list I've looked at doesn't even show Texas in the top 10 for property taxes in the nation. What is considered absurd down there? A lot of the "highest property tax in the country" type lists go by absolute dollar value, which of course leads to all the places with expensive houses topping the list. As a percentage of median home value (a more meaningful measure in my opinion), Texas ranks 3rd in the nation. http://dallasdirt.dmagazine.com/2010/10/05/texas-property-taxes-third-highest-in-nation-percentage-of-median-value/ Those numbers are state level only I guess (or maybe Dallas area, the article doesn't specify) as I live in El Paso and the municipal add-ons here are killer and significantly higher than the 1.81% listed in that article. I get to pay for all the illegals to go to school and take their kid to county hospital ER when he has a runny nose (I'm not mad about it, that's just the reality of El Paso property taxes), and we have one of the lowest median incomes of any major city so the rate has to be higher to have a functioning city. greasyhands fucked around with this message at 07:08 on May 4, 2011 |
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May 4, 2011 06:50
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greasyhands posted:Words... As a percentage of median home value (a more meaningful measure in my opinion) Thanks for the good information guys, I didn't realize the differences in measurements for taxes (median home value, household income, etc.) These state rankings still don't do justice for those people with extremely high costs of living. My state of Illinois for instance, the entire Chicagoland area is almost a whole other world compared to "downstate". I'm still bitter that my yearly tax rate on my sub-$100k home is about $4,320. Property taxes are 47% of my monthly mortgage. This is on top of high sales taxes (10% in cook county), and a 5% state income tax. But when the rest of the state is basically farmland, it really skews the results. The Shep fucked around with this message at 08:11 on May 4, 2011 |
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May 4, 2011 08:06
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One of the best mortgage rates I've seen available in Canada, is coincidentally available only in the Province in which I live. Caisse Financial Group is offering a 5 Year fixed rate mortgage at 3.79%, or a 10 year fixed rate at 4.65%... The best I've seen the majority of other financial groups offering a fixed 5 yr mortgage for is 4.29%. Is there any reason to not go ahead and get a 10 year fixed? Also, I'm looking at buying a house without a real estate agent. Are there any complications with legalities and forms required, that I wouldn't be aware of because of this? Or will the Lawyer advise me of everything that's required?
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May 4, 2011 15:06
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Cmdr. Shepard posted:I'm still bitter that my yearly tax rate on my sub-$100k home is about $4,320. Property taxes are 47% of my monthly mortgage. Property taxes on my ~340k place are about $4k. That's in Chicago, which is a little cheaper than the collar counties.
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May 4, 2011 15:46
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Kashwashwa posted:Also, I'm looking at buying a house without a real estate agent. Are there any complications with legalities and forms required, that I wouldn't be aware of because of this? Or will the Lawyer advise me of everything that's required? Any reason you are looking to buy without an agent? If Canada works like the US, if the buyer has no agent, the selling agent will just take the full 6% commission rather than having to split it 50/50 with a buyers agent. There is no reason to not have a buyer's agent in the US.
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May 4, 2011 15:58
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