House owners VS renters

[FTX I]

I have built my house, have owned and rented. Owning and renting are equally fine IMO. It depends on individual circumstances. However, on a pain in the ass scale of 1 to 10, building a house is 11.

[GradyPhilpott]

I rent and I like it that way.

[Fencer]

Originally Posted by SunTzu

Bingo. Your parents are the norm for retiring couples in NJ. Overtaxed and moving South to a home they built on twice the lot for a fraction of the cost and zilch cost of living. Northeast pensions go a helluva a lot father there. My old man is like yours; the f*ing snow. After 77 years he's over it.

My financial advisor is telling me to go to Charlston, SC to a suburb outside the city.

When thinking of such a move while getting older, consider the quality of medical care. As I looked, Charleston comes rather short in that area.

[timedate]

shocked at these property taxes,

what would be the taxes on lets say a property worth 500,000 dollars in florida for example?

is everybody really rich in the states or something? because 18k property taxes would finish everybody here in the uk and finish the economy.

[Chester01]

Originally Posted by SunTzu

Nope, welcome to NJ. It's why everyone is leaving (among other reasons running the State into a financial ditch) and moving down South (taking the same politics that ruined NJ with them ). My folks are one of the elderly few of their friends who stayed. Another couple is leaving for Delaware because they pay $25k a year. My dad wanted to leave ages ago but my mother refused. Sadly, her sister, my aunt, is severely mentally ill and lives in a psychiatric hospital. My mother said in good conscious she can't leave her alone. So they stay. Lower tax areas in NJ are in the middle of nowhere or in areas not as cultured as they would like. They're highly active, very cosmopolitan, love fine dining and being a 35 minute drive (no traffic) from NYC where they spend a lot of time as well as driving to the Hamptons to their best friend's summer home.

The issue is one of salary though and that in many fields is higher in NJ compared to the south. I looked into moving south many times. But there is the school issue (many very good public options in NJ) and also the salary differential, I wonder if it is a bit closer than it appears in the surface. I lived in FL and then moved to NJ. When I talk to my old friends the hurricane insurance, CDD fees in many communities, are beginning to add up. Other items like groceries, entertainment, etc tends to be similar.

[Chester01]

Originally Posted by timedate

shocked at these property taxes,

what would be the taxes on lets say a property worth 500,000 dollars in florida for example?

is everybody really rich in the states or something? because 18k property taxes would finish everybody here in the uk and finish the economy.

No they just spend a higher percentage of their income in housing. The shocking part is that the 18,000 in taxes covers surprisingly little.

[GoingPlaces]

I own real estate, including my home.

[liu_watch]

I will always buy, even if the total cost is higher than renting. There is something about owning a house than just living in someone else’s. Plus, the size of the house is usually larger than the rented.

There are so many factors involved. If your only consideration is cost, then the decision process is easy: crunch some number, and choose the lower cost of the two. The relative cost will vary by location...

[liu_watch]

Originally Posted by timedate

shocked at these property taxes,



what would be the taxes on lets say a property worth 500,000 dollars in florida for example?



is everybody really rich in the states or something? because 18k property taxes would finish everybody here in the uk and finish the economy.

Florida is about 2%, $10,000. Maybe $9,000 after deduction.

Illinois is the second highest in the US. For 500k house, property tax is about $15,000! Even in tiny towns...

[Slates]

Renting right now and hoping to buy a really expensive, small house in NJ in the next year or two :(

[Ballzzz]

Love RE - Currently own 2 rental properties and even though they are cash flow positive I can’t seem to see in the short term how they can change my life in anyway. I see it as more of a passive long term investment and an additional bank account. I can always create capital from the massive amounts of capital I have built into both. This would NEVER deter me from buying #3 if the deal was right. I think RE helps create generational wealth.

[Old Geezer]

We rented starting out but have purchased our homes after the first couple of years in the workforce. We relocated 10 times during my working career. Luckily, we always realized enough appreciation to offset the costs of owning the home while we were in it. We built our new home in SC and it is paid off. I'd rather spend a few thousand a month for maintenance, HOAs, taxes and additional improvements than pay someone else that money. At least if for some unforeseen reason I need to sell, I can. Disclaimer...SC is an inexpensive state for things like taxes. Our relatives in NY and CA are in a very different boat.

[Kyle3130]

Originally Posted by superdog

not me.

I don’t like the idea of paying someone else’s mortgage.

x2

[SunTzu]

Originally Posted by Chester01

The issue is one of salary though and that in many fields is higher in NJ compared to the south. I looked into moving south many times. But there is the school issue (many very good public options in NJ) and also the salary differential, I wonder if it is a bit closer than it appears in the surface. I lived in FL and then moved to NJ. When I talk to my old friends the hurricane insurance, CDD fees in many communities, are beginning to add up. Other items like groceries, entertainment, etc tends to be similar.

Look at the numbers. How many people are leaving NJ, and how many people are entering Florida? The differential is staggering.

New Jersey became the number one state to move away from in 2018. Twice as many people moved out of New Jersey in 2018 as moved in. Contrast to Florida which statistically show a massive influx and growth rate.

The cost of living is still cheaper. These property taxes are absolute killers. Everyone leaves. My close friend has $900k waterfront property in Siesta Key with a dock and boat slip and pays $9k a year. My parents have a postage stamp 2 blocks from Newark and pay $18k a year. I found a home in Florida in a community I would live (I don't have to worry about schools) with a pool and the property tax is $1,600 a year.

[Slates]

Originally Posted by SunTzu

Look at the numbers. How many people are leaving NJ, and how many people are entering Florida? The differential is staggering.

New Jersey became the number one state to move away from in 2018. Twice as many people moved out of New Jersey in 2018 as moved in. Contrast to Florida which statistically show a massive influx and growth rate.

The cost of living is still cheaper. These property taxes are absolute killers. Everyone leaves. My close friend has $900k waterfront property in Siesta Key with a dock and boat slip and pays $9k a year. My parents have a postage stamp 2 blocks from Newark and pay $18k a year. I found a home in Florida in a community I would live (I don't have to worry about schools) with a pool and the property tax is $1,600 a year.

Getting out of NJ/NY is the dream, but proximity to the city can’t be beat.

[crew]

Originally Posted by timedate

shocked at these property taxes,

what would be the taxes on lets say a property worth 500,000 dollars in florida for example?

is everybody really rich in the states or something? because 18k property taxes would finish everybody here in the uk and finish the economy.

In Collier County Florida, an area not known to be inexpensive, a $500k condo would pay about $4,500/year in taxes.
A single family home in NYS of that same value would be over $15,000/year.
Taxes in Florida are a deal compared to NY.

[G8RDPM]

Originally Posted by Old Geezer

We rented starting out but have purchased our homes after the first couple of years in the workforce. We relocated 10 times during my working career. Luckily, we always realized enough appreciation to offset the costs of owning the home while we were in it. We built our new home in SC and it is paid off. I'd rather spend a few thousand a month for maintenance, HOAs, taxes and additional improvements than pay someone else that money. At least if for some unforeseen reason I need to sell, I can. Disclaimer...SC is an inexpensive state for things like taxes. Our relatives in NY and CA are in a very different boat.

As you know,everyone from the North East is moving here!
Please PM me if you want to meet for a drink or a great meal!

[mrs_LA]

I’m a homeowner in California. My husband was never keen on the idea of giving our money to somebody else, when it could go towards the ownership of our home. In this crazy real estate climate, I’m glad we were able to purchases a home. If not, sooner or later, rents are going to sky rocket close to the city and you’ll be forced to live on the outskirts like what’s happening to San Francisco.


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[brandrea]

Probably depends a lot on where you live and perhaps to a lesser extent, your age.

I can’t fathom a $500 / month rental property in our area ... they don’t exist. Average rent runs around $1500 - $1800 and for that, you can mortgage a fair amount, which is why many choose to own.

I also think many millennials don’t aspire to owing real estate like the baby boomers and gen-xer’s do. Student loans and “experiential lifestyles seem to be more commonplace. Not judging whatsoever, as they may just have it right in some ways.

I also think home ownership is less common in Europe (perhaps members here can comment).

We own our home, and paid off the mortgage when I hit age 40. No regrets, but it is expensive ... I think of it more as forced savings vs. a wise investment. You also can’t live in a stock portfolio

Lastly, in Canada, mortagage interest payemnts are not tax deductible like in other countries. The sales of your house as a primary residence, is however tax free

[Fabrice M]

Originally Posted by timedate

shocked at these property taxes,

what would be the taxes on lets say a property worth 500,000 dollars in florida for example?

is everybody really rich in the states or something? because 18k property taxes would finish everybody here in the uk and finish the economy.

You are not seeing the big picture here, Florida has high property taxes but doesn’t have income taxes, where California for example has very low property taxes but high income taxes. Taxes needs to be looked at in context, not raw. At the end it all evens out, each states have a different way of taxing but it all come down to more or less the same.

[SMD]

Originally Posted by Fabrice M

You are not seeing the big picture here, Florida has high property taxes but doesn’t have income taxes, where California for example has very low property taxes but high income taxes. Taxes needs to be looked at in context, not raw. At the end it all evens out, each states have a different way of taxing but it all come down to more or less the same.

Yeah, no. Come to NYC and you will see the err of this statement.

[singe89]

Originally Posted by Fabrice M

You are not seeing the big picture here, Florida has high property taxes but doesn’t have income taxes, where California for example has very low property taxes but high income taxes. Taxes needs to be looked at in context, not raw. At the end it all evens out, each states have a different way of taxing but it all come down to more or less the same.

Agree but not “more or less the same” or we wouldn’t have business leaving CA for lower tax states. in the high cost of living area in CA you can be paying base property tax and additional taxes like mello roos on a $1m+ condo and and still have to pay up to 13.3% income tax and in some cities around 10% sales tax and low income worker health care tax, etc. and that’s on the individual level. On the business side there are laws like minimum salary of almost $45k a year plus benefits. The high cost of living also costs the employers more in total salary to allow their employees to live in the state. High tax states have to live on growth.

[timedate]

Originally Posted by Fabrice M

You are not seeing the big picture here, Florida has high property taxes but doesn’t have income taxes, where California for example has very low property taxes but high income taxes. Taxes needs to be looked at in context, not raw. At the end it all evens out, each states have a different way of taxing but it all come down to more or less the same.

ok, we have every tax you can think of as well as annual property taxes, if you buy a property you have a stamp duty of many thousands of pounds to pay the government aswell. before the purchase

sales tax, is 20 per cent on nearly everything

we even have a bag tax for your groceries and a sugar tax to stop the sensible from becoming clinically obese

[Bob the brush]

I am lucky enough to be mortgage free, and I own this house, a lovely old Victorian pile, and another one further down the road which is rented to a lovely lady who has lived there alone for over 10 years. I offered to sell her the house, she declined in an instant, saying didn't want a "mortgage round her neck " and was quite happy to pay me rent, and have me maintain the property, and that with a mortgage she would have to work full time which she didn't want. Works well for both of us, and long may it continue.

[Chester01]

Originally Posted by SunTzu

Look at the numbers. How many people are leaving NJ, and how many people are entering Florida? The differential is staggering.



New Jersey became the number one state to move away from in 2018. Twice as many people moved out of New Jersey in 2018 as moved in. Contrast to Florida which statistically show a massive influx and growth rate.



The cost of living is still cheaper. These property taxes are absolute killers. Everyone leaves. My close friend has $900k waterfront property in Siesta Key with a dock and boat slip and pays $9k a year. My parents have a postage stamp 2 blocks from Newark and pay $18k a year. I found a home in Florida in a community I would live (I don't have to worry about schools) with a pool and the property tax is $1,600 a year.

Listen, I can’t get out soon enough! Lol. It’s interesting, I see so many brand new 55 and over communities going up here in NJ. I wonder who in their right mind would retire in this state. I understand folks move here because while it is crazy, it cheaper than Manhattan, but can’t understand how they manage to see any of those 55 and over homes here in NJ.


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[Etschell]

Originally Posted by brandrea

Probably depends a lot on where you live and perhaps to a lesser extent, your age.

I can’t fathom a $500 / month rental property in our area ... they don’t exist. Average rent runs around $1500 - $1800 and for that, you can mortgage a fair amount, which is why many choose to own.

I also think many millennials don’t aspire to owing real estate like the baby boomers and gen-xer’s do. Student loans and “experiential lifestyles seem to be more commonplace. Not judging whatsoever, as they may just have it right in some ways.

I also think home ownership is less common in Europe (perhaps members here can comment).

We own our home, and paid off the mortgage when I hit age 40. No regrets, but it is expensive ... I think of it more as forced savings vs. a wise investment. You also can’t live in a stock portfolio

Lastly, in Canada, mortagage interest payemnts are not tax deductible like in other countries. The sales of your house as a primary residence, is however tax free

the deduction is limited in the US to interest on $750k principle max. not that it is a small amount but just saying. real estate taxes are limited to $10k.

[brandrea]

Originally Posted by Etschell

the deduction is limited in the US to interest on $750k principle max. not that it is a small amount but just saying. real estate taxes are limited to $10k.

Good information Eliot

I presume that means the interest deduction is targeted to the “middle class” which makes sense.

When you say taxes are limited to 10k, are you referring to when the principle is sold? If so, that seems like an amazing deal.

[crew]

Originally Posted by Etschell

the deduction is limited in the US to interest on $750k principle max. not that it is a small amount but just saying. real estate taxes are limited to $10k.

The limit of $10k in deduction is not limited to real estate taxes. It includes all state & local taxes, including income tax at the local level.

[swatty]

I’ve never rented, purchased my first apartment at 21 years old. Traded up a few times and now paid off , its a great feeling , especially in the Sydney property market

[car_wash_guy]

There is an element of freedom that renting gets you. You can up and move at a moments notice. No worries about maintenance or capital improvements.