My next door neighbor is the original owner. He paid ~$10k for his house when it was new.
A house in my neighborhood rents for about $2k. My PITI is about $2700/month. So, I’m paying $700 more per month than I could rent for. By selling, I’d lose almost $30k/year in tax writeoffs. At 28%, that would mean I’d lose about $8400 from additional taxes but I’m paying about $8400 additional in carrying costs. In other words, I would have NO additional cashflow from renting (aside from things like maintenance costs). A wash.
I certainly wouldn’t go out and buy something right now if I wasn’t already in the market. However, if I were to sell, by the time I calculate closing costs from the original purchase, commission by RE and closing costs on the sale, I’d probably end up with around half of the current ~$100k in equity that I have.
I won’t argue that there is a bubble in San Diego and many other regions but you guys sound like so many equity day traders. In RE as in equity investing, most people who try to predict the market and time their entry/exit end up holding the bag in the long run. Those who invest to hold for the long run and weather the ups and downs are the ones who prevail.
I’ll stick it out, thank you very much. Loses, just as gains, aren’t realized until you actually sell your investments. Otherwise, they are just on paper.
