[quote=bibsoconner]Thanks for your latest comments flu. Not sure I quite followed them though. Our household income is roughly $220K/yr gross. We have no stock dividend/interest income to speak of. We sold all the stock to buy the new house. Our mortgage+taxes+insureance on the new house is around $5500 which is quite a bit more than $0 on the old house, and does keep me up at nights.
I’ve taken all the comments here to heart but it looks like we’re leaning towards renting because the boss (wife) thinks it’s a good idea. She might be right. She’s much smarter than me. It concerns me that the cap rate is only 4.3% or so. I based this on $650,000 price, and took into account monthly rent, management fees, prop taxes/insurance, gardener BUT NOT maintenance or down time (time between tenants, etc.). As I said before, it’s by no means clear that one can get 4.3% in other investments. Certainly I have dividend stocks in my retirement account that pay well now, and they may even go up by 100%. Or they may do what my GM and WAMU stock did a while back and go to 0.
To answer another question, no we don’t need the money right away. So if prices went down a lot, we could ride it out. Of course if house prices dropped 25%, I’d expect to see rents drop too! Given the huge capital gains advantage of selling right away, it sure seems like we better be willing and able to rent for a long time. Realistically, I don’t see us moving back in for 2 years to lock in new tax advantages.
Thanks to all,
Dave[/quote]
I think you can ignore what I said about taxes. Never mind….Brain fart..,.
Please ask someone who is an accountant.
..But I think the exempted portion of capital gains from sale of primary residence I don’t think counts toward what is used to calculate the 3.8% tax surcharge….
Anyway, do some research on the 3.8% medicare tax surcharge and the 20% capital gains tax rate… If it’s not applicable to you now, it’s very possible it’s very applicable to you in the future, if you don’t plan on selling your primary home, which gets special treatments….
