[quote=ocrenter]I’m in complete agreement with ER in regard to paying off the MR. Unless you are a seasoned investor, how many of us has the ability to generate 7% return on our investment year after year for 30 years? Yet that’s exactly what you are doing when you pay off the MR. Instead, a lot of people I know are committing to a 20 year solar panel lease at a rate of 7%.
How many people actually sold homes with years of high interest obligation to solar leasing companies? Yet all of the solar companies advertise about the increased home value like gospel. What about the MR? Nobody dares to even say you’ll break even on the appraisal value. But seriously, put up a listing with the opening: “owner paid off entire MR, saving you $6-10k a year” and that’s not going get a buyer’s attention???
The MR payoff is an absolute no brainer.[/quote]
I totally agree with you OCR. And even if you are a seasoned investor that consistently makes over 7% ROI each year, most of the times that ROI isn’t guaranteed like it is here in this situation.
I’ve been fortunate enough that I have made well over 7% a year ROI since I started investing many years ago. But typically I’d say I got to where I am today doing prudent things like this. And the ROI could well be over 7% a year ROI if these CFD’s get mysteriously extended past their original end dates.
I also TOTALLY agree with you about the power of having a listing saying, “NO MELLO ROOS taxes. Owner FOREVER paid them off’.
You’d definitely get attention. Even in a soft sales market vs. a healthier one like now, I believe you would (a) get back every dollar you pre-paid in MR taxes, (b) sell your house much quicker vs. someone that has MR taxes, (c) attract a MUCH larger audience of potential buyers.
We’re still getting unsolicited offers to purchase our house. We got one offer a few short months ago that was over $350,000 + more than I paid for the house a few short years ago. They already did their due diligence and could see we paid off our CFD. (At the time only one was showing as paid off). The city used to designate the CFD’s being prepaid by $0.00.
Now I find it interesting that they just totally remove the CFD line off your bill once you pay it off. Before it would say CFD #4 ($0.000) and now both of them are totally gone from the property tax bill that I got last week.
Heck, we probably could have asked for even more money from the family that sent in the letter wanting to buy our house but I bought the house to live in and not as an investment property. I don’t really care what home prices do in the short-term yo-yoing up and down. But I am happy not to have to see/pay that CFD again.
Also, OCR, the one thing we left out is that there are those types that say they don’t need to pre-pay their CFD because they can take that money and leverage it and make far more. LOL. We all have seen those types. And yes, sure you can make more with various investments out there. But those other investments have some risk to them. It’s not guaranteed.
And typically over the past few decades what I see in this type of situation is people will leverage the money and either lose it. Or they will do well and leverage it again and THEN lose it. So there is that too.
