Something Ain’t Right in San Marcos

[SD Realtor]

Sorry to be skeptical whatodo but I believe areas such as San Marcos are going to get hit pretty hard in the next 2 years. I would really urge you to hold off if you can. If not then I understand, just try to drive the best bargain that you can and if your realtor is so gung ho on you making an offer ask her/him for a rebate of the referral fee they are going to get.

SD Realtor

[SD Realtor]

Sorry to be skeptical whatodo but I believe areas such as San Marcos are going to get hit pretty hard in the next 2 years. I would really urge you to hold off if you can. If not then I understand, just try to drive the best bargain that you can and if your realtor is so gung ho on you making an offer ask her/him for a rebate of the referral fee they are going to get.

SD Realtor

[SD Realtor]

Sorry to be skeptical whatodo but I believe areas such as San Marcos are going to get hit pretty hard in the next 2 years. I would really urge you to hold off if you can. If not then I understand, just try to drive the best bargain that you can and if your realtor is so gung ho on you making an offer ask her/him for a rebate of the referral fee they are going to get.

SD Realtor

[SD Realtor]

Sorry to be skeptical whatodo but I believe areas such as San Marcos are going to get hit pretty hard in the next 2 years. I would really urge you to hold off if you can. If not then I understand, just try to drive the best bargain that you can and if your realtor is so gung ho on you making an offer ask her/him for a rebate of the referral fee they are going to get.

SD Realtor

[Anonymous]

We certainly can continue renting for a few more years, but…
The housing prices are falling, that’s a fact. How about interest rates? Are they going to stay at this level for couple more years? If they rise higher and higher, even with a low purchase price, our monthly payments may end up being the same?! Is this a reasonable speculation?
(add to that the amount of money we will pay for rent in these two years + the tax ride off we won’t qualify for due to renting).

Thanks again for sharing your opinion.

[Anonymous]

We certainly can continue renting for a few more years, but…
The housing prices are falling, that’s a fact. How about interest rates? Are they going to stay at this level for couple more years? If they rise higher and higher, even with a low purchase price, our monthly payments may end up being the same?! Is this a reasonable speculation?
(add to that the amount of money we will pay for rent in these two years + the tax ride off we won’t qualify for due to renting).

Thanks again for sharing your opinion.

[Anonymous]

We certainly can continue renting for a few more years, but…
The housing prices are falling, that’s a fact. How about interest rates? Are they going to stay at this level for couple more years? If they rise higher and higher, even with a low purchase price, our monthly payments may end up being the same?! Is this a reasonable speculation?
(add to that the amount of money we will pay for rent in these two years + the tax ride off we won’t qualify for due to renting).

Thanks again for sharing your opinion.

[Anonymous]

We certainly can continue renting for a few more years, but…
The housing prices are falling, that’s a fact. How about interest rates? Are they going to stay at this level for couple more years? If they rise higher and higher, even with a low purchase price, our monthly payments may end up being the same?! Is this a reasonable speculation?
(add to that the amount of money we will pay for rent in these two years + the tax ride off we won’t qualify for due to renting).

Thanks again for sharing your opinion.

[Anonymous]

We certainly can continue renting for a few more years, but…
The housing prices are falling, that’s a fact. How about interest rates? Are they going to stay at this level for couple more years? If they rise higher and higher, even with a low purchase price, our monthly payments may end up being the same?! Is this a reasonable speculation?
(add to that the amount of money we will pay for rent in these two years + the tax ride off we won’t qualify for due to renting).

Thanks again for sharing your opinion.

[4plexowner]

“the tax write off we won’t qualify for due to renting”

If you aren’t already itemizing your tax return (filing Schedule A with your 1040) you actually LOSE tax write offs when you write off your mortgage interest

A single person gets the $5000 personal deduction ($10K for couples) just for being an American taxpayer

When you file Schedule A to claim mortgage interest as a writeoff you give up this $5K ($10K) personal deduction

In essence, the first $5K ($10K) of mortgage interest being written off is a wash – there is NO tax savings for this chunk of mortgage interest

Let’s look at an example:

$200K mortgage at 6% interest means we will pay $12K in interest each year

most people, when calculating ‘tax savings’ use this entire $12K to compute their savings while overlooking the fact that they gave up $5K ($10K) in writeoffs in order to take the $12K

so, a more accurate estimate of the tax savings is to subtract the $5K ($10K) personal deduction from the total interest paid and THEN compute your tax savings

that gives us $7K ($2K) to writeoff – at 30% tax rate that means we’ll save $2100 ($600) on our taxes – that’s $175/mo ($50/mo) savings

~

my example is based on the premise that you aren’t already itemizing your taxes BEFORE you buy real estate – if you are filing Schedule A for reasons other than mortgage interest deductions then this example doesn’t apply to you because you have already given up your personal deduction

I have several thoughts about using expected tax savings as a justification for purchasing real estate:
– don’t
– most people over-estimate the amount of savings
– if you can’t afford the property without the expected tax savings you can’t afford the property

[4plexowner]

“the tax write off we won’t qualify for due to renting”

If you aren’t already itemizing your tax return (filing Schedule A with your 1040) you actually LOSE tax write offs when you write off your mortgage interest

A single person gets the $5000 personal deduction ($10K for couples) just for being an American taxpayer

When you file Schedule A to claim mortgage interest as a writeoff you give up this $5K ($10K) personal deduction

In essence, the first $5K ($10K) of mortgage interest being written off is a wash – there is NO tax savings for this chunk of mortgage interest

Let’s look at an example:

$200K mortgage at 6% interest means we will pay $12K in interest each year

most people, when calculating ‘tax savings’ use this entire $12K to compute their savings while overlooking the fact that they gave up $5K ($10K) in writeoffs in order to take the $12K

so, a more accurate estimate of the tax savings is to subtract the $5K ($10K) personal deduction from the total interest paid and THEN compute your tax savings

that gives us $7K ($2K) to writeoff – at 30% tax rate that means we’ll save $2100 ($600) on our taxes – that’s $175/mo ($50/mo) savings

~

my example is based on the premise that you aren’t already itemizing your taxes BEFORE you buy real estate – if you are filing Schedule A for reasons other than mortgage interest deductions then this example doesn’t apply to you because you have already given up your personal deduction

I have several thoughts about using expected tax savings as a justification for purchasing real estate:
– don’t
– most people over-estimate the amount of savings
– if you can’t afford the property without the expected tax savings you can’t afford the property

[4plexowner]

“the tax write off we won’t qualify for due to renting”

If you aren’t already itemizing your tax return (filing Schedule A with your 1040) you actually LOSE tax write offs when you write off your mortgage interest

A single person gets the $5000 personal deduction ($10K for couples) just for being an American taxpayer

When you file Schedule A to claim mortgage interest as a writeoff you give up this $5K ($10K) personal deduction

In essence, the first $5K ($10K) of mortgage interest being written off is a wash – there is NO tax savings for this chunk of mortgage interest

Let’s look at an example:

$200K mortgage at 6% interest means we will pay $12K in interest each year

most people, when calculating ‘tax savings’ use this entire $12K to compute their savings while overlooking the fact that they gave up $5K ($10K) in writeoffs in order to take the $12K

so, a more accurate estimate of the tax savings is to subtract the $5K ($10K) personal deduction from the total interest paid and THEN compute your tax savings

that gives us $7K ($2K) to writeoff – at 30% tax rate that means we’ll save $2100 ($600) on our taxes – that’s $175/mo ($50/mo) savings

~

my example is based on the premise that you aren’t already itemizing your taxes BEFORE you buy real estate – if you are filing Schedule A for reasons other than mortgage interest deductions then this example doesn’t apply to you because you have already given up your personal deduction

I have several thoughts about using expected tax savings as a justification for purchasing real estate:
– don’t
– most people over-estimate the amount of savings
– if you can’t afford the property without the expected tax savings you can’t afford the property

[4plexowner]

“the tax write off we won’t qualify for due to renting”

If you aren’t already itemizing your tax return (filing Schedule A with your 1040) you actually LOSE tax write offs when you write off your mortgage interest

A single person gets the $5000 personal deduction ($10K for couples) just for being an American taxpayer

When you file Schedule A to claim mortgage interest as a writeoff you give up this $5K ($10K) personal deduction

In essence, the first $5K ($10K) of mortgage interest being written off is a wash – there is NO tax savings for this chunk of mortgage interest

Let’s look at an example:

$200K mortgage at 6% interest means we will pay $12K in interest each year

most people, when calculating ‘tax savings’ use this entire $12K to compute their savings while overlooking the fact that they gave up $5K ($10K) in writeoffs in order to take the $12K

so, a more accurate estimate of the tax savings is to subtract the $5K ($10K) personal deduction from the total interest paid and THEN compute your tax savings

that gives us $7K ($2K) to writeoff – at 30% tax rate that means we’ll save $2100 ($600) on our taxes – that’s $175/mo ($50/mo) savings

~

my example is based on the premise that you aren’t already itemizing your taxes BEFORE you buy real estate – if you are filing Schedule A for reasons other than mortgage interest deductions then this example doesn’t apply to you because you have already given up your personal deduction

I have several thoughts about using expected tax savings as a justification for purchasing real estate:
– don’t
– most people over-estimate the amount of savings
– if you can’t afford the property without the expected tax savings you can’t afford the property

[4plexowner]

“the tax write off we won’t qualify for due to renting”

If you aren’t already itemizing your tax return (filing Schedule A with your 1040) you actually LOSE tax write offs when you write off your mortgage interest

A single person gets the $5000 personal deduction ($10K for couples) just for being an American taxpayer

When you file Schedule A to claim mortgage interest as a writeoff you give up this $5K ($10K) personal deduction

In essence, the first $5K ($10K) of mortgage interest being written off is a wash – there is NO tax savings for this chunk of mortgage interest

Let’s look at an example:

$200K mortgage at 6% interest means we will pay $12K in interest each year

most people, when calculating ‘tax savings’ use this entire $12K to compute their savings while overlooking the fact that they gave up $5K ($10K) in writeoffs in order to take the $12K

so, a more accurate estimate of the tax savings is to subtract the $5K ($10K) personal deduction from the total interest paid and THEN compute your tax savings

that gives us $7K ($2K) to writeoff – at 30% tax rate that means we’ll save $2100 ($600) on our taxes – that’s $175/mo ($50/mo) savings

~

my example is based on the premise that you aren’t already itemizing your taxes BEFORE you buy real estate – if you are filing Schedule A for reasons other than mortgage interest deductions then this example doesn’t apply to you because you have already given up your personal deduction

I have several thoughts about using expected tax savings as a justification for purchasing real estate:
– don’t
– most people over-estimate the amount of savings
– if you can’t afford the property without the expected tax savings you can’t afford the property

[Butleroftwo]

I live in Silver Crest and love it. Troll Alert! We moved from a nice older neighborhood in San Diego and it is night and day. The houses here are nicer, they are kept up, the neighbors are always friendly, the school is much better and the area is mellow. We have not had one moment of buyers remorse.
The train has been testing for months now and I have yet to here it from my house. It is quiet. Some houses in the area appear to be in bad locations by overlooking the freeway or the train but all areas of San Diego County have similar problems. I wouldn’t buy one of those but you cannot single this neighborhood out for those problems.
Go ahead and catch the knife. The handle may just land in your hand.

[Author]

Posts