House closing

[Villager1234]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

[Stu from NYC]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

More power to you but what happens to your budget when interest rates go down?

[Villager1234]

I think I can survive on my pension and social security. If I can’t I can get a NYC address and get a free EBT card, cell phone, and $1000 for rent

[Villager1234]

Seriously, if you add up the cost of potiental repairs and maintenance increases
It might be financially prudent to rent

[Two Bills]

When you total up all the annual outgoings, build in ongoing major replacements, re-roofing etc. full time rental in TV is a viable option in my book.
You have all the capital from previous house sale, invested for income/growth, which should cover any capital appreciation from house owning, plus for most retirees, income from investments and pensions.
Another bonus is you can move to a better location or deal whenever you feel like a change, and all you have to do is pack your suitcases!

[Villager1234]

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop

[JMintzer]

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop

"Told" by whom?

[villagetinker]

I guess I am missing something, but the owner of the rental will eventually need to recoup some (maybe all) of the previously mentioned expenses, by increasing the rent. I am going to watch where this discussion goes.

[MightyDog]

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

[Stu from NYC]

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

You are omitting what happens when interests rates go down not to mention annual increase in rents.

[MightyDog]

You are omitting what happens when interests rates go down not to mention annual increase in rents.

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.

[Stu from NYC]

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.

If these are your expectations hope you have a rainy day fund if you are wrong.

[jimbomaybe]

You are omitting what
happens when interests rates go down not to mention annual increase in rents. Taxes on the income, write off on mortgage interest, of course there are many things that only the future will reveal, home ownership has always been a reasonably good investment in the longer term, at least in the past

[Randall55]

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.We are currently renting a small home for $1950 a month. We have to pay electric and wifi. Our social security checks pay for all plus plenty to spare for food and necessities. Our money is sitting collecting interest. We understand this can not be a forever situation. We know the cost of living will eventually go up.

We are watching the housing market carefully and looking for a home that will provide us with equity on day one. Deals are out there! We found a few but passed because they were not our ideal. When we find THAT ONE, we will pounce on it. If it needs remodeling, we are okay with that.

We went through every floor plan of new construction homes and there is not one we would not have to change to fit our comfort level. For us, buying a preowned will be cheaper long term. (No bond, lower taxes, low maintenance, etc) We are hoping the money we earn in interest will significantly help cover the cost of remodeling.

Everyone has to crunch their own numbers. In this housing market, It is a gamble whichever path you choose. We are waiting for a golden opportunity that keeps us at the lowest risk. There is a saying, 'good things come to those wait." Will it work for us? Or, are we being penny wise and pound foolish? Only time will tell.

[Randall55]

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop 50% or more of scheduled closings seem to be buyers from Florida. Some are investors.

You misunderstood. This in NO WAY equates to 50% of ALL new home purchases are investors. The percentage of investors is probably between the 10-20% mark. This percentage will vary based on the location of new homes. Homes close to squares usually have a higher percentage.

[MightyDog]

If these are your expectations hope you have a rainy day fund if you are wrong.
"Wrong" in what way?

If somebody has hundreds of thousands in cash, by definition, they have a rainy day fund for whatever life kicks-up.

I'll add that I've seen plenty of $$ haircuts (not catastrophic) for people who bought in latter 2020 to early 2022 and sold in the last 6 months or so. That wound-up being a buy high/sell low situation for them. And painful for some sellers who sat for months with an overpriced house for sale. Some of the asking prices are still dumb and continuously getting shaved.

[MightyDog]

We are currently renting a small home for $1950 a month. We have to pay electric and wifi. Our social security checks pay for all plus plenty to spare for food and necessities. Our money is sitting collecting interest. We understand this can not be a forever situation. We know the cost of living will eventually go up.

We are watching the housing market carefully and looking for a home that will provide us with equity on day one. Deals are out there! We found a few but passed because they were not our ideal. When we find THAT ONE, we will pounce on it. If it needs remodeling, we are okay with that.

We went through every floor plan of new construction homes and there is not one we would not have to change to fit our comfort level. For us, buying a preowned will be cheaper long term. (No bond, lower taxes, low maintenance, etc) We are hoping the money we earn in interest will significantly help cover the cost of remodeling.

Everyone has to crunch their own numbers. In this housing market, It is a gamble whichever path you choose. We are waiting for a golden opportunity that keeps us at the lowest risk. There is a saying, 'good things come to those wait." Will it work for us? Or, are we being penny wise and pound foolish? Only time will tell.

100% agree with all. The exception being, in current conditions, it's not necessarily a gamble. If someone can engineer a scenario that only costs them $6000 to 8000, net out of pocket to live -- that's a deal, pure and simple.

It also affords them plenty of time to decide if they want TV for long term and to scope the housing market. Because, you're right, there are some nice deals that show-up and you have to be ready to pounce since they tend to get nabbed in 10 days or less, is my observation.

[Villager1234]

My crystal ball says rents will stabilize or drop slightly because of all of the new homes being sold to investors. I am a retired tradesman with a little knowledge of mechanical and structural systems (enough to get me in trouble). A person under stress who doesn’t have the experience may get taken advantage of or a least overpay for services

[Randall55]

My crystal ball says rents will stabilize or drop slightly because of all of the new homes being sold to investors. I am a retired tradesman with a little knowledge of mechanical and structural systems (enough to get me in trouble). A person under stress who doesn’t have the experience may get taken advantage of or a least overpay for servicesI was a contractor, now retired. The scenario you described happens FREQUENTLY in the Villages. Good news? Preowned homes have most of the expensive upgrades completed. Many done extremely well. At the same cost as the builder material new, you can find a quality resale that only needs cosmetic changes. New floors, counters, paint, and perhaps tile work. Easy! Best of all, preowned have no bonds and lower taxes.

We are going to continue to rent until we find THAT SPECIAL HOME. Until then, life is good not having to deal with the hassles of maintaining a home. I COMPLETELY understand your viewpoint. Here's hoping interest rates stay up and investors blindly keep buying. What a terrific scenario for renters.

[Villager1234]

Taxes on the income, write off on mortgage interest, of course there are many things that only the future will reveal, home ownership has always been a reasonably good investment in the longer term, at least in the past Yes I agree. I don’t think I have time for a long term investment. We aren’t going to live forever. If I purchase a house when I go any equity will probably be eaten up by my kids preparing the house for sale, the expenses while selling,real estate commission, legal fees, etc
If I keep it in CDs they just go to the bank and get their money ( I hope that they remember to call a funeral director to pick me up ☺️)

[CoachKandSportsguy]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

The issue with a CD paying all of your expenses is good for the moment, I agree. However, its also like a pension, a fixed amount every month. At some point, the inflation of every day expenses will overcome the fixed income amount, and you will need to eat into your principal to pay the increased rent and other living expenses. A few hospital bills which isn't covered can dent the CD and not cover the rent and other living expenses. .

The future is ALWAYS uncertain. What works today will continue to work until it doesn't. so always have a plan B even if today looks like it will continue indefinitely.

[La lamy]

I was going to rent also, but got kicked out of what I thought would be my forever rental in TV. You never know what the owners will do with their property, so owning my own house has been a sense of stability where I'm able to fix whatever I want to my liking. Putting cash into a home is also a way to have to save oneself from paying taxes on interest earned from investing it.

[GizmoWhiskers]

I think I can survive on my pension and social security. If I can’t I can get a NYC address and get a free EBT card, cell phone, and $1000 for rent
Not if one has a Gold Star driver's license required to fly commercial airlines (May 7, 2025 is the deadline in case one has not heard). Now, if one goes by plane, train or automobile from T V one will be all set to execute that economically beneficial plan.

Renting in T V is fine but is unpredictable in nature for sure. A popular song says it all, "Buy Dirt" (unless one likes paying off someone else's dirt).

[daca55]

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

The $12500 and $15000 you mention from income derived from T bills or a CD is not all yours. They are both federally taxed. How much depends on your tax bracket. Just saying……

[Girlcopper]

I guess I am missing something, but the owner of the rental will eventually need to recoup some (maybe all) of the previously mentioned expenses, by increasing the rent. I am going to watch where this discussion goes.
Im a life long renter and love it. Fridge breaks? Call the owner. Water leak? Yep, call the owner. I would never waste my time maintaining a home when I can live worry free

[Robnlaura]

It’s a great idea at the moment. The housing market is heading into a storm.. listings are rising rapidly prices continue to climb. Yet, not very many are selling. Prices are starting to plummet just look at the time on market figures. I would sit on the sidelines myself to see what actually happens. There’s no fear of not finding a home in the villages not at the at the way they building. This idea that the villages is a bubble never drop will take a massive test this and next year..

[Bradley60]

If you move money from an annuity to a T-bill or CD, do you have to pay taxes on the money when you move it?

[Pat2015]

"Told" by whom?
50% of all the purchases in the southern areas of TV are not rentals. What’s the basis of your comment?

[R&J in NJ]

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop
50%? Sad that the new neighborhoods are so transient. Renters don't care for the homes the same way as full time residents.

[Robojo]

More power to you but what happens to your budget when interest rates go down?

You are locked in until withdrawal with a cd

[Robojo]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

I also rent yearly here in TV. My house owner is an investor with at least 5 homes and is the main reson i didnt buy. He snatched up the houses i could afford before I could get a loan.

So now I rent the house I thought I wanted to own.

I am very happy as a renter. My rent is extremely affordable and I have zero risk.

Good luck navigating home owners insurance. Thats whats stopping me from buying in this state.

I'm with the poster on this one. I would rather have a buttload in savings than to own another home.

[retiredguy123]

If you move money from an annuity to a T-bill or CD, do you have to pay taxes on the money when you move it?
Lots of variables. But, generally, if you funded the annuity with non-tax deferred money, when you cash out the annuity, you will owe income tax on the earnings you made, but not the principal that you deposited. Moving it to a T-bill or CD doesn't change anything. If you funded the annuity with tax deferred money (401K or IRA), you can transfer the money into another tax deferred account and delay the tax.

[coleprice]

Your rent will go up most years, while your mortgage remains unchanged. Although insurance and taxes will go up a little each year, they are relatively small and will not escalate at the pace of rents.

[Sandy and Ed]

I think I can survive on my pension and social security. If I can’t I can get a NYC address and get a free EBT card, cell phone, and $1000 for rent
I don’t understand……..wouldn’t you first need to cross over the southern border, no??

[roadrnnr]

I have been mulling over this also.

I am going to have a $550k Cash on my house sale an would have probably 20K a year, after taxes and fees I am assuming.

That would get me a decent rental.

[merrymini]

Being a renter is not worry free. What if you have a lousy landlord and they drag their feet getting the fridge fixed? They kick you out because they want to sell the house? No thanks. My home is an investment and under my control, as far as we control such things. I can live here as long as I want and it appreciates over time. I control how and where I live. Ownership is for me.

[Randall55]

Your rent will go up most years, while your mortgage remains unchanged. Although insurance and taxes will go up a little each year, they are relatively small and will not escalate at the pace of rents.Renters have no maintenance costs and do not pay for repairs. Zero time is spent attending to these needs. If a landlord decides to sell the home, many more rentals are available or you can pull your funds from your savings and buy a home. The decision to own or rent is give and take. Honestly, we are LOVING renting. Hassle-free and more time to enjoy our retirement.

[Cliff Fr]

Taxes on the income, write off on mortgage interest, of course there are many things that only the future will reveal, home ownership has always been a reasonably good investment in the longer term, at least in the past

If a person already sold their house when they were retirement age a long term investment in a house may not be realistic

[Cliff Fr]

I have been mulling over this also.

I am going to have a $550k Cash on my house sale an would have probably 20K a year, after taxes and fees I am assuming.

That would get me a decent rental.

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

[cjrjck]

As someone who rented in TV for five years before buying I can tell you there are advantages and disadvantages. The advantages have been mentioned such as no maintenance costs. I will cover some of the disadvantages. For one, it is sometimes not as easy as you would think to find a suitable home in the area you are wanting to live for the time period you need. Much depends on the time of year your current lease ends if you are having to find another home. I lost a number of potential rentals because my lease ended at a time the rentals were not available or the owner was not willing to wait until my lease ended. Also, if you are renting long term while searching for the perfect home to "pounce on" better hope that it is near the end of your long term lease or you will have to carry two house payments for some time or pay a considerable severance penalty if that is an option. We finally chose to buy because we concluded that we will be here long enough to recoup our investment in a home and likely make money. If you have the funds to purchase a home, the time you think you will be in TV could be an important factor.

[Randall55]

As someone who rented in TV for five years before buying I can tell you there are advantages and disadvantages. The advantages have been mentioned such as no maintenance costs. I will cover some of the disadvantages. For one, it is sometimes not as easy as you would think to find a suitable home in the area you are wanting to live for the time period you need. Much depends on the time of year your current lease ends if you having to find another home. I lost a number of potential rentals because my lease ended at a time the rentals were not available or the owner was not willing to wait until my lease ended. Also, if you are renting long term while searching for the perfect home to "pounce on" better hope that it is near the end of your long term lease or you will have to carry two house payments for some time or pay a considerable severance penalty if that is an option. We finally chose to buy because we concluded that we will be here long enough to recoup our investment in a home and likely make money. If you have the funds to purchase a home, the time you think you will be in TV could be an important factor. We do not have a long term lease. We negotiated with the owner on a month to month basis. If he decides to pull the rug under us, we will try to find a similar arrangement or rent off Villages property. We travel often. Our rental is just a place to return. No sweat off our back if we lose it. For now, the landlord likes the arrangements. His home sits empty frequently with very little wear and tear.

[JMintzer]

50% of all the purchases in the southern areas of TV are not rentals. What’s the basis of your comment?

I was questioning to same 50% that you were questioning...

Don't know why you quoted my post...

[JMintzer]

I also rent yearly here in TV. My house owner is an investor with at least 5 homes and is the main reson i didnt buy. He snatched up the houses i could afford before I could get a loan.

So now I rent the house I thought I wanted to own.

I am very happy as a renter. My rent is extremely affordable and I have zero risk.

Good luck navigating home owners insurance. Thats whats stopping me from buying in this state.

I'm with the poster on this one. I would rather have a buttload in savings than to own another home.

And as insurance rates continue to rise, what do you think will happen to your rent?

[JMintzer]

Renters have no maintenance costs and do not pay for repairs. Zero time is spent attending to these needs. If a landlord decides to sell the home, many more rentals are available or you can pull your funds from your savings and buy a home. The decision to own or rent is give and take. Honestly, we are LOVING renting. Hassle-free and more time to enjoy our retirement.

Glad it works for you...

Our dog sitter and her husband are on their 3 (or is it 4th?) long term rental. Their landlords keep selling the houses, forcing them to move once a year...

Unfortunately, they can afford to rent, but they cannot afford to buy...

[JMintzer]

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

Not on $550K, you won't...

You can make $500K PROFIT on selling your home before paing capital gains taxes...

[MightyDog]

Not on $550K, you won't...

You can make $500K PROFIT on selling your home before paing capital gains taxes...

The 500K profit, before paying cap gain taxes, is for married, filing jointly. For single people, the threshold is 250K profit before the cap gains taxes occur.

[JMintzer]

The 500K profit, before paying cap gain taxes, is for married, filing jointly. For single people, the threshold is 250K profit before the cap gains taxes occur.

Oh, dear... I ASSumed they the sale/purchase was from a couple, like the majority of Villages purchases (73%)...

Regardless, unless they sold for DOUBLE the price they initially bought, they won't pay capital gains... And I find that is unlikely...

[Randall55]

Oh, dear... I ASSumed they the sale/purchase was from a couple, like the majority of Villages purchases (73%)...

Regardless, unless they sold for DOUBLE the price they initially bought, they won't pay capital gains... And I find that is unlikely...It is VERY LIKELY. Most homes in the Villages were bought many years ago. The Covid boom doubled the home values and then some!

Currently, this may be difficult. Inventory has risen tremendously in the past few months causing price reductions. Just a year ago, sellers were cashing-in, BIG TIME. Timing is everything.

[roadrnnr]

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

No Im under the Capitol Gains req

[Oldnavycdr]

Some folks talk like moving is free, or easy.

[Randall55]

Some folks talk like moving is free, or easy. We sold our previous Villages home furnished. We knew we were going to downsize and the large furniture would not fit our next home. Our rental came furnished. We will have very little to move when the time comes. Besides, wife likes to decorate. She would have thrown nearly everything away if we hadn't included it in the sale of our home. Fortunately, the new owners were pleased to have the home furnished.

[Villager1234]

A video that I saw on “inside the bubble”

[jimjamuser]

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.
Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family. What is the value of a dog that turns away a potential home break in. Let's say you rent and would like to plant a garden and the landlords say, "no way". If you rent , after 10 years, you have a lot of PRETTY rent receipts and that is ALL. If you purchased your home, you have some equity or may have even paid off the loan. You were able to plant trees and a garden where ever YOU wanted, not what some stranger told YOU to do. YOU have more control over your life and that is PRICELESS !!!!!
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.

[MightyDog]

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family......
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.

Rest easy, Jim, rest easy. I didn't lay-out the entire picture because there was no reason to. I'm not trying to sell anybody anything - just fronting some numbers info that is interesting and viable at this particular time.

There are always a multitude of variables to consider in any scenario. Certainly, some of the buyers in the last 3 years that already re-sold or are now selling probably wish they had rented for a year or more. Such a huge amount of hassle only to take a loss.

But, I do find it fascinating how some here seem to have a compulsion to shoot holes in ideas presented. Not sure why they get so triggered. The conversation might flow better if they posed questions instead of making declarations which often sound like tutorials. Yet, we are all of mature ages here so, not really needed.

[JMintzer]

It is VERY LIKELY. Most homes in the Villages were bought many years ago. The Covid boom doubled the home values and then some!

Currently, this may be difficult. Inventory has risen tremendously in the past few months causing price reductions. Just a year ago, sellers were cashing-in, BIG TIME. Timing is everything.

No one was talking about the re-sale of a home bought in TV...

The poster to whom I responded is a current renter, who commented that he has $550K from the sale of the home he lived in before moving to TV...

No one stated, nor suggested that they had a "Covid Windfall" that netted them $550K after the sale of their previous home.

But, for the sake of argument, let's say the $550K was pure profit. They would only owe capital gains on $50K...

Plus, you have 2 years to buy another home of equal or higher value of your net selling price and you avoid capital gains taxes completely...

[margaretmattson]

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family. What is the value of a dog that turns away a potential home break in. Let's say you rent and would like to plant a garden and the landlords say, "no way". If you rent , after 10 years, you have a lot of PRETTY rent receipts and that is ALL. If you purchased your home, you have some equity or may have even paid off the loan. You were able to plant trees and a garden where ever YOU wanted, not what some stranger told YOU to do. YOU have more control over your life and that is PRICELESS !!!!!
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.Some understand most of us do not have much more time left on this planet. I see nothing wrong with choosing to rent. One poster stated it will make it easier for his children when he passes. Simply go to the bank and divide the funds. No hassle of selling an estate.

Besides, if their social security checks and pensions are footing their cost to rent, what is the problem? They sold their previous homes and want to live cash happy with no hassles of owning. You can't take money to your grave. Live whatever time you have left to the fullest.

[Normal]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

Renting is the only way to go in the current market. Prices will go down further. At best the bottom is reached just before fall. Only someone who doesn’t care about money would buy with the prices high.

[mtdjed]

While not rent verses own, would seem that Capital Gain could be an issue for many at a time of lifestyle change.

Isn't the $250/$500K a cumulative lifetime exemption? For instance, I bought my first house around 1971 for @$25,500 but with only a $500 down payment. All subsequent houses (4) prior to The Villages were higher value but were paid for using funds gained from prior sales.

Sold last non-Village home for ~ $650K. Invested ~$350K on the Village house. Just for discussion, if home sold now for $650K, then total gain would be $625 before TV and $300K in The Villages or a total of $925K.

Some improvements made that may have increased value, but nothing significant.

Much of the increase is obviously due to inflation.

Questions.

1/Is the assumption regarding $250/$500K lifetime, correct?
2/ Does the increased value calculation for Capital Gains have an allowance for inflation?
3/Who tracks this maze? Do you need to calculate and report every time you sell? If so, Oops!
4/ Don't we all have to eventually checkout of home ownership? Assisted living, death etc.

[SoCalGal]

Will you be paying income tax on the sale proceeds if you don't reinvest in another house?

You'll be paying long term capital gains tax, not income tax.

[retiredguy123]

While not rent verses own, would seem that Capital Gain could be an issue for many at a time of lifestyle change.

Isn't the $250/$500K a cumulative lifetime exemption? For instance, I bought my first house around 1971 for @$25,500 but with only a $500 down payment. All subsequent houses (4) prior to The Villages were higher value but were paid for using funds gained from prior sales.

Sold last non-Village home for ~ $650K. Invested ~$350K on the Village house. Just for discussion, if home sold now for $650K, then total gain would be $625 before TV and $300K in The Villages or a total of $925K.

Some improvements made that may have increased value, but nothing significant.

Much of the increase is obviously due to inflation.

Questions.

1/Is the assumption regarding $250/$500K lifetime, correct?
2/ Does the increased value calculation for Capital Gains have an allowance for inflation?
3/Who tracks this maze? Do you need to calculate and report every time you sell? If so, Oops!
4/ Don't we all have to eventually checkout of home ownership? Assisted living, death etc.
Answers:

1. The $250/$500 capital gains exclusion is available for every primary residence house that you sell. There is no lifetime accumulation or limit on the number of houses that you sell. But, you must have lived in the house as your primary residence for 2 of the last 5 years immediately before selling it.
2. There is no allowance for inflation.
3. There is no requirement to report the sale of your primary residence to the IRS unless you owe a capital gains tax on it. There is no maze to keep track of because you can benefit from the capital gains exclusion as many times as you want.
4. Yes, everyone will eventually lose ownership of their house through a sale, a gifting, or death.

[westernrider75]

50%? Sad that the new neighborhoods are so transient. Renters don't care for the homes the same way as full time residents.

Not sure where these neighborhoods are, certainly not mine. Out of approximately 80 homes there are less than 10% that are rentals.

[Girlcopper]

Seriously, if you add up the cost of potiental repairs and maintenance increases
It might be financially prudent to rent
It is and its fewer headaches. I would never never own but I would never want an already furnished place. I want my own things. Unfurnished annual rental and life is wonderful

[Villager1234]

This whole thread depends on what type of landlord you have. I am in my second long term rental and both landlords were professional. And caring. I was in 2 short term rentals that were horror shows I just read in Village News that a tenant was arrested
They didn’t fix her stove for 7 months and ended up in court Who needs that aggravation?

[Desiderata]

Rest easy, Jim, rest easy. I didn't lay-out the entire picture because there was no reason to. I'm not trying to sell anybody anything - just fronting some numbers info that is interesting and viable at this particular time.

There are always a multitude of variables to consider in any scenario. Certainly, some of the buyers in the last 3 years that already re-sold or are now selling probably wish they had rented for a year or more. Such a huge amount of hassle only to take a loss.

But, I do find it fascinating how some here seem to have a compulsion to shoot holes in ideas presented. Not sure why they get so triggered. The conversation might flow better if they posed questions instead of making declarations which often sound like tutorials. Yet, we are all of mature ages here so, not really needed.

I actually thought Jim brought up some good points as to why some would prefer to buy, just as the OP brought up excellent points as to why renting could be the way to go for many. I took his comments as point counter point.

[JMintzer]

Renting is the only way to go in the current market. Prices will go down further. At best the bottom is reached just before fall. Only someone who doesn’t care about money would buy with the prices high.

https://faughnfamily.com/wp-content/uploads/2022/06/Screen-Shot-2022-06-24-at-10.32.27-AM.jpeg

[Aces4]

Numbers can't tell the FULL story. Let's say that you have a DOG or want to have one. Well, you can't have one at a lot of rentals. A dog protects you, your family, and your personal property. A dog BECOMES part of the family. What is the value of a dog that turns away a potential home break in. Let's say you rent and would like to plant a garden and the landlords say, "no way". If you rent , after 10 years, you have a lot of PRETTY rent receipts and that is ALL. If you purchased your home, you have some equity or may have even paid off the loan. You were able to plant trees and a garden where ever YOU wanted, not what some stranger told YOU to do. YOU have more control over your life and that is PRICELESS !!!!!
.....Having said that, renting for around a year has some benefits because you might find one Village suits your family better than another.


Those "pretty" rent receipts are just that, nice and very pretty compared to all the costs of owning and maintaining a home in The Villages. Not to mention the governmental hand reducing your profits upon sale of your residence. Renting is clean and simple if you rent furnished. We wished we would have rented vs purchasing. The rental prices will not exceed tax increases and other costs one has to absorb when owning a home. If we want to plant flowers, we'll buy a flower pot and load it up.