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The obvious answer is yes but it is not apples to applesAre you saving any money, less outgoing cash flow or the same?
Haha no, not at all. But when we do...her family is Caribbean so..... but seriously, it is what you are used to. We almost went with about 1800 sq ft Apartment on the Water in the Weehawkin/West NY area but very glad we didn't with COVID and two large dogs. But the other issue is that my wife had 4.5 walkins(yeah, half of mine) and 3 wall closets in the basement for her "stuff" - even looking at a 3BR house, she was always trying to figure out how to make one of the bedrooms into a closet. The house we built and just moved out of was 7000sq ft and an acre property. She feels cramped in the 3000 sq ft home we are renting.
Ummm- every home for rent we looked at requires the tennant to provide lawn service, tree work, light bulbs, cleaning service or just clean yourself, spring plantings, fall/spring cleanup, summer backyard spruceup, etc etc etc what in flaming heck are you talking about? Does your landlord buy your toilet paper for you too?
Again...not many nicer suburban areas that Franklin LAkes- what the hell are you talking about?
Have to think you definitely don't have kids.Regardless of the state, overall owning your own principal residence really only makes sense financially if your middle to lower class. Again, if you buy a $500k principal residence which is common in NJ, 20% down is $100k in stagnant equity appreciating at 2% annually. Instead rent a property with the same monthly payment amount and that $100,000 now invest in a light value-add multi family syndication in a red landlord/business friendly state like Texas at 15%. In 30 years, if you bought when your principal residence is paid off and appreciated at 2% annually you have $900,000 home owned free and clear. Had you rented your principal residence for 30 years and used that $100k for a syndicate at 15% in 30 years that $100k is now $6,600,000 aka 7X more and affords you a sweeeeet retirement if you invest that in an easily achievable 7% cash flow yield making you $420,000/yr while preserving your $6.6 plus having it still appreciate.
If this confused you or made you question what youre doing, youre normal. 99%+ of america doesnt understand/know the above. America needs more single family rental communities. I think we’ll see them rise in popularity and see more development of them over the next couple decades as big institutional investor groups/ hedge funds continue to chase yield/cash flow.
full disclosure, I say this as someone practicing what I preach and selling my principal residence. I am also one of the top residential real estate brokers in NJ/US under 30 and have 7-figures invested in multi-family.
You got what you wanted, lower cash flow going out.The obvious answer is yes but it is not apples to apples
House I built/owned was 7000 sq ft, 1 acre manicured property, inground pool and spa. Too large to clean ourselves as we both work, though, I did do everything for the pool except open and close.
Home we are renting is 2900 sq ft, no pool and maybe 1/2 acre of property to maintain. No longer a need for a house keeper either as the wife has taken a sabbatical from work and can easily clean top to bottom in under 4 hours. Though, since a older home, windows, ceilings, walls roof are not properly insulated. So no where near being as efficient.
Our Mortgage/tax was 3x our rent. But it was also a quality of life that is night and day. Wouldn't have traded it for anything but time to move on. I believe there were a few glimpses of our home back when Rutgers used to have that show where they would visit a Senior's home town. And a couple of prominent posters on the board have visited a few times.
Just one question. How are you getting a 15% yield in Texas. Ive looked at alot of the these and most managed real estate yields 4-6%. Im guessing you are assuming appreciation of 10% a year. IRegardless of the state, overall owning your own principal residence really only makes sense financially if your middle to lower class. Again, if you buy a $500k principal residence which is common in NJ, 20% down is $100k in stagnant equity appreciating at 2% annually. Instead rent a property with the same monthly payment amount and that $100,000 now invest in a light value-add multi family syndication in a red landlord/business friendly state like Texas at 15%. In 30 years, if you bought when your principal residence is paid off and appreciated at 2% annually you have $900,000 home owned free and clear. Had you rented your principal residence for 30 years and used that $100k for a syndicate at 15% in 30 years that $100k is now $6,600,000 aka 7X more and affords you a sweeeeet retirement if you invest that in an easily achievable 7% cash flow yield making you $420,000/yr while preserving your $6.6 plus having it still appreciate.
If this confused you or made you question what youre doing, youre normal. 99%+ of america doesnt understand/know the above. America needs more single family rental communities. I think we’ll see them rise in popularity and see more development of them over the next couple decades as big institutional investor groups/ hedge funds continue to chase yield/cash flow.
full disclosure, I say this as someone practicing what I preach and selling my principal residence. I am also one of the top residential real estate brokers in NJ/US under 30 and have 7-figures invested in multi-family.
What town was the 7000 sq ft home in? I vaguely remember a thread...Bergen Co?!The obvious answer is yes but it is not apples to apples
House I built/owned was 7000 sq ft, 1 acre manicured property, inground pool and spa. Too large to clean ourselves as we both work, though, I did do everything for the pool except open and close.
Home we are renting is 2900 sq ft, no pool and maybe 1/2 acre of property to maintain. No longer a need for a house keeper either as the wife has taken a sabbatical from work and can easily clean top to bottom in under 4 hours. Though, since a older home, windows, ceilings, walls roof are not properly insulated. So no where near being as efficient.
Our Mortgage/tax was 3x our rent. But it was also a quality of life that is night and day. Wouldn't have traded it for anything but time to move on. I believe there were a few glimpses of our home back when Rutgers used to have that show where they would visit a Senior's home town. And a couple of prominent posters on the board have visited a few times.
Why would I care
They have a large home. They are nice people and it works for them.
They have a lot of cars also but a three car garage and a huge driveway. There might be 1 or 2 cars on the streetMy neighbor does that too. They have like 9 cars which litter the street.
Mahwah- what they call the Fardale section. Which means bordering on Ramsey, Allendale, Wyckoff and Franklin Lakes, not bordering on Suffern. Had my wedding there, 130+ guestsWhat town was the 7000 sq ft home in? I vaguely remember a thread...Bergen Co?!
15% average annualized return, not yield. Typically around 8-10% average annual yield and the rest comes from forced appreciation from light value add, we also project cap rates going up by 25BP per year from acquisition, theyve actually all gone done though, so returns will be higher but I like to keep it conservative. These arent hard to find, theyre just standard dealsJust one question. How are you getting a 15% yield in Texas. Ive looked at alot of the these and most managed real estate yields 4-6%. Im guessing you are assuming appreciation of 10% a year. I
Frida, I agree with the premise and almost everything in your post. Only question, and it's semantics really, is around the speculative property being classified as an investment. The only positive CFs associated with that are realized when it's ultimately sold, which you could in theory say about your primary residence as well. You've also commented, perhaps in another thread or the legacy CE board, that speculative vehicles (like gold, which Inrealize is unique) aren't really investments which also confused me re the speculative property comment.ownership of your primary residence isn’t an investment. An investment must constitute an asset which intrinsically grows in value over time independent of what another person may or may not be willing to pay for said asset. For example, a business that provides the owner cash flows, or the prospect of cash flows, is an investment. The value of the business is independent of what someone would be willing to pay for the business, in whole or in part, at any point in time. Purchase of a bond which remits periodic, contractual coupon payments would also constitute an investment, as would the purchase of residential property that provides the owner a stream of rental income. Even the speculative purchase and refurbishment of properties with the intent to sell post refurbishment constitutes an investment. However, the purchase of a property as your primary residence does not fit into the definition of an investment, it generates no income. The only time it will provide any cash flow to the owner is upon sale. Of course, this is not to say that a home purchase is a poor financial decision, or that the price of the home will increase over time. But it shouldn’t be considered an investment. It is not.
while this may sound like mere semantics, clarifying how financial resources are allocated in a clear minded manner should improve decision making.
Yeah that’s what I said. They made a bundle. I know the market did better and they had some money there too. The house was not an investment when they bought it but it worked outYou didn’t buy 23 years ago at $30k or it was in foreclosure. Your parent paid $30k in the 1960’s which is more than 60 years ago. My parents paid about $32k in 1964.
This is the key- everyone is different. If I had never remarried and just stayed single and "enjoying" life- still do, but not the same. lolYeah that’s what I said. They made a bundle. I know the market did better and they had some money there too. The house was not an investment when they bought it but it worked out
I paid way more in 90’s. We did not buy to invest either. We will make money when we sell but the point to us was to have a nice place to live that we call home.
There is so much more to life than money. I’m loving it every day. We have more than enough money for how we love to live.
Frida, I agree with the premise and almost everything in your post. Only question, and it's semantics really, is around the speculative property being classified as an investment. The only positive CFs associated with that are realized when it's ultimately sold, which you could in theory say about your primary residence as well. You've also commented, perhaps in another thread or the legacy CE board, that speculative vehicles (like gold, which Inrealize is unique) aren't really investments which also confused me re the speculative property comment.
Yup, which is exactly why I got the hell out of jersey as soon as possible. My house in Maryland is valued at around $280k. My YEARLY taxes are just over $2200...Looking at a house sale near me, it was purchased in 2001 for $389,900. Over the past 19 years, the owner paid over $136,000 in taxes. For the sale, they needed renovations that were about $60,000, the house was built in 1968. So they paid about $585,900. They sold it this year, in a seller's market, for $480,000. So they lost $105,900 dollars not counting wear and tear repairs over the years.
Did anyone ever make a profit selling their house when factoring in property tax?
The murder rate would skyrocket... I would legitimately kill my mother in law if I had to live with herIntergenerational housing is a very good economic plan
My new neighbors have 3 generations living in the house and the savings are substantial
I'm sorry but just checked zillow an homes under 300k - some can be nice(but very small and no property) but man oh man...Again, depends on lifestyle. And apples to apples.Yup, which is exactly why I got the hell out of jersey as soon as possible. My house in Maryland is valued at around $280k. My YEARLY taxes are just over $2200...
I'm 31 years old it's our starter house but a nice house for us. 3 bedroom rancher on a half acre, little over 2200 sq ft including the finished basement. We eventually will settle on more land but this is fine for now. Houses reaching $400k+ tend to have annual taxes around $3500 around hereI'm sorry but just checked zillow an homes under 300k - some can be nice(but very small and no property) but man oh man...Again, depends on lifestyle. And apples to apples.
Yup, which is exactly why I got the hell out of jersey as soon as possible. My house in Maryland is valued at around $280k. My YEARLY taxes are just over $2200...
When I lived in Montgomery county Maryland it was more expensive than NJ.I'm sorry but just checked zillow an homes under 300k - some can be nice(but very small and no property) but man oh man...Again, depends on lifestyle. And apples to apples.
i just checked, you can live in Cape May NJ with a house $260k and 2.3k property taxes.
Interesting- tons of places in CM off the water that are less than 300k and like you say- under 3k taxes. Made me curious to check for houses any price on the water to see if there is a difference in taxes. There are zero homes for sale waterfront in Cape May...When I lived in Montgomery county Maryland it was more expensive than NJ.
i just checked, you can live in Cape May NJ with a house $260k and 2.3k property taxes.
This entire thread is silly. (1) Blanet statements one way the other are stupid. (2) Every situation is unique based upon location, choices, time horizon, and personal preferences. The last point is regarding what people value from a stability, quality of life, other qualitative factors. (3) The way to asses the choice is by modeling out cash flows of two scenarios and understand which one provides a higher present value. Monthly costs are directional, but should include all things like property taxes, bills, Mortgage costs, mortgage interest and tax deductions, etc.
Generally speaking, in this area, I do think the value proposition of owning a short-term property isn't what it used to be. I think people often want to buy their first place for a few years and then upgrade, and it wouldn't surprise me to see the numbers come out in favor of renting there.
At least a couple of realtors. My wife sitting next to me has been a mortgage lender for 30 years with licenses currently in 14 statesAny of the posters in this thread a realtor or mortgage lender?
That's not accurate at all. Even the most taxed area's of Maryland in Howard and Montgomery County's where the median house price is $500k+ their yearly taxes rarely top $5000 unless that have 5 or more acres..Not to mention that CM >>> the boonies of MD
It's not necessarily an apples to apples comparison by the MD poster. On average MD is a rather heavily taxed state even if not quite as bad as NJ, so it's not like leaving NJ and escaping to MD is some huge improvement in tax liability. It depends largely on where in NJ compared to where in MD.
That's not accurate at all. Even the most taxed area's of Maryland in Howard and Montgomery County's where the median house price is $500k+ their yearly taxes rarely top $5000 unless that have 5 or more acres..
What town are you in? I have clients who live in Potomac in a multi million dollar property and know for a fact their property taxes just top $12,000. That's a 4 acre property with a 4500 sq ft house with every amenity in just about the most expenisve area in the state, not 10 min from DC on the Potomac river.... The majority of my family live in Baltimore County, I'm in Carroll, have a cousin in Frederick, and friends and clients scattered all throughout.... I have no idea where you are getting those numbers fromI wish my prop tax bill said different. That too, in a lower taxed MD county and for only a 1/4 acre lot valued in the mid $500s. Annual property tax north of $5K for the past several years.
I’m in a $1.5mil house in Arlington, VA also not 10 mins from DC and the property taxes are $11k. My parents house in Bridgewater, NJ is about $850k and the property taxes are about $16.5k. Virginia also has a 5% property tax on vehicles, though.What town are you in? I have clients who live in Potomac in a multi million dollar property and know for a fact their property taxes just top $12,000. That's a 4 acre property with a 4500 sq ft house with every amenity in just about the most expenisve area in the state, not 10 min from DC on the Potomac river.... The majority of my family live in Baltimore County, I'm in Carroll, have a cousin in Frederick, and friends and clients scattered all throughout.... I have no idea where you are getting those numbers from
I'm not sure what type of repairs a tenant should be responsible for??? Unless they break something.I had a friend who owned rentals and he paid for all repairs. He told me it was because tenants let things go if they had to pay and small repairs turned into big repairs if not dealt with
Smaller sales tax though so it evens out (what's virginia 4.25% sales tax?). Point being I have no idea where these people are getting this idea that the taxes in Maryland are similar to those in Jersey.... It's not even close!I’m in a $1.5mil house in Arlington, VA also not 10 mins from DC and the property taxes are $11k. My parents house in Bridgewater, NJ is about $850k and the property taxes are about $16.5k. Virginia also has a 5% property tax on vehicles, though.
Not to mention that CM >>> the boonies of MD
It's not necessarily an apples to apples comparison by the MD poster. On average MD is a rather heavily taxed state even if not quite as bad as NJ, so it's not like leaving NJ and escaping to MD is some huge improvement in tax liability. It depends largely on where in NJ compared to where in MD.
Where I'm getting the numbers? Staring at my semi-annual tax bill which is due in 2 weeks. Anne Arundel County, not too far from Annapolis.What town are you in? I have clients who live in Potomac in a multi million dollar property and know for a fact their property taxes just top $12,000. That's a 4 acre property with a 4500 sq ft house with every amenity in just about the most expenisve area in the state, not 10 min from DC on the Potomac river.... The majority of my family live in Baltimore County, I'm in Carroll, have a cousin in Frederick, and friends and clients scattered all throughout.... I have no idea where you are getting those numbers from
Varies by location but it’s actually 6% in NovaSmaller sales tax though so it evens out (what's virginia 4.25% sales tax?). Point being I have no idea where these people are getting this idea that the taxes in Maryland are similar to those in Jersey.... It's not even close!