That is an excellent idea! Our thinking exactly.

Dirigo

The wife and I equate TV to a Cruise Ship. You have to evaluate how much space you want to eat, sleep, and shower in, and if you want a port hole or not (i.e. a view). All the activities are outside the cabin!

Army Guy

Anyone heard rumors of the developer acquiring more land for development? There appears to be lots of open land on the perimiter of TV that could be purchased for the right price. Hard to believe the developer will shut down development that is profitable. One of the tools some developers use is to keep expansion plans under cover to give the impression that you need to buy now or be left out. I'm not familiar with Florida development laws. Would farm land need to be rezoned to residental before building? Just a thought.

We have had the same question
 

Hello everyone. So we've been lurking in the background for quite a few months viewing everyone's wonderful posts (and the fun you all have creating them!) and this particular thread called out for our first actual post of our own. We were having exactly the same conversation this past weekend. The size of TV is, it seems, at once its strength and its potential downfall. Huge number of costs associated with the on-going business of maintaining TV as it is today. Then I did the math, and please correct me if I have not done it right. I have heard that the target at build out is about 125,000 residents. If that's correct, then let's assume that there are 1.75 residents for each property (assuming more couples than singles). If that's correct, then at build out, there would be approximately 70,000 "paying units" to support TV assuming the developer is providing no funds whatsoever. I believe the current average Amentites fee is about $135 monthly, or about $1600 annually, and the "average" CDD Assesment is about $200 per month, or $2400 annually. That means that each "paying unit" is providing $4000 per year in funds. For 70,000 units, that's $280 Million dollars per year. It would seem that with a solid group of people involved in the management of this level of funding, then should the developer completely remove himself from the scene at build out, there would still be ample funds to maintain everything that you currently enjoy. By the way, we plan to become TV residents in 2011, right after I retire, or as soon as the house in Virginia sells! There are already a number of TV folks that we know from my home town on NH (including 2 high school classmates) and we can't wait to get there. Thanks everyone for all of your great input in these threads. Oh Oh, I've almost reached Boomer Level in the post!

Bill (The "B" in "bands" in our sign in name) Maybe sometime I'll come up with a cool cover name.

The Rose
 

Great analogy. We did the same thing. Real estate agents try to convince you to "buy as much house as you can afford". In retirement, that didn't make sense for us. Like Russ, Dirgo and Army Guy, we took the opposite approach, preferring to be able to afford more activities.

The other big sales pitch, of course, is "location, location, location," which makes all the sense in the world when you're trying to grow a business. When buying a house in TV though, it seemed, at least for us, that it would have meant same lifestyle, same amentities, pay more, (house and bond), and keep spending more (furnishing, decorating, upgrades, landscaping).

Ultimately, we paid under $180,000, including closing costs and bond, for a turnkey (dishes, cookware, linens, etc.), beautifully furnished and decorated, two-bedroom Austin with a large, private lanai, mature landscaping, and beautiful palm trees.

Centrally located? no. BUT... it's close to shopping, two championship courses, walking trails, fitness center, community pool and it's in TV. We have more money for activities and made an investment we can afford to take a hit on, if that's what the future holds. We love our neighbors and our neighborhood. We're just a longer-- enjoy the ride and view-- golf cart ride from the squares and southside clubs.

Of course, our choice is not for everybody. Different people have different and equally valid preferences, priorities and dreams.

My point though, is that TV is to a large extent, as affordable as you want it to be and as adjustable to risk tolerance.

Despite all my previous and future comments about kool-aide, I fully acknowledge the risks. I really don't even try to rationalize them. I think they're real. The CDD's could very well lose their fight with the IRS and be forced to repay millions early and with penalties. BTW here's an excellent link:

http://www.thevillagesfloridabook.co...s-irs-problem/

Amenity fees could escalate when the developer pulls out. (Our Villages real estate agent told us the developer's projected build-out is 2014. Maybe, maybe not). Common grounds and facilities could deteriorate if the CDDs can't get the support from TVers, the same prices the developer gets or whatever.

Another bad scenario could be the developer or CDDs eventually trying to raise more money by selling amenity packages to non Villagers. That would increase traffic, diminish our access via overcrowding and reduce TV property values.

Yes, there are risks at TV. So are there risks to property values and quality of life in Ohio and Georgia and Oregon.

For us, the right decision was go for the lifestyle of our dreams while managing (i.e., minimizing) our investment risk.

It is, after all, "the dream afraid of waking, that never takes the chance."

B.... congrats on your first post. Hope to see many more. A little clarification on your math.

For the amenities.... yep it'll be about 60K houses at some future increase above today's $130'ish per month. Using very rough numbers, this will be about $100M/year. That's a lot of money!!! But, it will be used to support close to 40 exec golf courses, 70 or so pools, 30 or so rec centers, etc. (all very round numbers). Also, in today's world, approximately 40% of the amenity fee goes towards paying off the bond issued to originally purchase them from the developer. The other 60% is for ongoing maintenance, operations, salaries, and renovations/upgrades. Time will tell if the level of amenity fee we have come to expect will be sufficient to keep everything running and up to standards.

On the CDD assessment side.... I think you got the $200/mo, $2400/year from the annual bond payment associated with each home. This 'revenue' is basically spoken for to retire the debt that comes with your home for its initial contribution to infrastructure construction (roads, sidewalks, rec trails, etc). So, it is not a managed source of revenue.

Each of us pays approx 400-500/year in CDD maintenance assessments used to keep the common infrastructure (landscaping, lighting, sidewalks, rec trails, etc) maintained and operating. This CDD maintenance only applies to Marion and Sumter Counties. Lake county residents pay these expenses as part of their county services/tax bill. These are managed revenues but are wholly separate from the amenity funds.

It is a very complex budget/funding puzzle but it does seem to work. The million (or is that billion) dollar question is will it still work 20 years from now.

Excuse me for sounding stupid but we have just started looking at TV. When you are talking about the $130 maintenance fee that is what everybody pays no matter when and where they bought, correct? And there is another $200 on top of that PLUS the bond fee? Or is that $200 the bond fee which may or may not have been paid off depending where you buy?

We too have the worry about substainability, in 20-25 years will there be new residents who want to buy into TV? Or will all the homes fall into foreclosure, sitting empty, etc? No residents = no fees

Post #50 by Pturner makes a lot of good points. But I gotta tellya that I laughed when I saw it just now.

The reason I laughed is because I was just getting ready to write almost the exact same words about Army Guy's cruise ship analogy. I loved it.

And then I was also going to write about how I am zeroing in on how the bottom line in all this comes right down to individual risk tolerance. -- including risk vs. benefit.

But my internet connection kept fading in and out.

And now that I am connected again (I think I am) Pt has already said that stuff, and if I write about those things now, it will look like I copied her homework.

I do have some more to say though -- imagine that -- on the topic of selling and buying houses. But this connection is threatening to disconnect again so I will have to write all that at another time.

I think this thread is really helpful. Lots of great information and comments. Lots of things to talk about. Thanks everybody.

Boomer

Boomer, glad I could bring a smile to your day. But to me and the wife it is exactly how we describe TV to others. Like a Cruise Ship on dry land, gosh all we need is the Casino!
But yes, we all make our OWN choices, and that is why I put the uniform on each day and what makes the country great. We can decide for ourselves what we want to choose for our futures. Like PTurner, we wanted less house and yard in retire so we can do more. Or, as I tell people, I want to wake up read the paper and decide, "Do I play 9 or 18 today, or do I ride the Harley?"
And the risk factor yes, again as PT puts it is everywhere. We have lived in several places and see changes when we got there and when we left. But feel that the way TV is set up, and is set up to be governed once down is a pretty good model and should be succesful. Will fees go up? You bet it is a fact of life, prices go up. How much? We can't say at this juncture, but will me and Mrs AG pay it to preserve our lifestyle? You bet. TV is still the most affordable place we have found while we were searching. And, I do believe that most want TV to continue as it is, so they will also pay. If they don't want to they can move, and I believe there will be others ready to buy and pay to get what we all have.
I guess I tend to be overly optimistic but I truely feel, that TV will survive and thrive once build out is here and when/if the Morses leave.

Army Guy

That is certainly one way to look at it. However, TV will never go "under". The worst case scenario is that some of the amenities may be less than what they are now (e.g., less music in the squares, higher fees for championship golf) and hence TV may not be the perceived nirvana that it is now. Hence, this assumes that if things go south you will bail out and sell. However, have you considered which type of property is most likely to retain its value in this situation? One could argue that a house on a golf course or with a view of some sort will hold its value better and be easier to sell than a "commodity" house on an interior lot.

My comments are inserted in the above quote.

In the latest, just out, February 2010 POA Bulletin it states on page 7,

Staff Reports:
Staff counsel reported that the IRS audit
of VCCDD bonds continues to move through
the process with the IRS chief council focusing
on the “political subdivision” issue at this
point.

http://www.poa4us.org/bulletins_file...etin201002.pdf

just in case somebody needs to know this, but does not
 

Are you lost in a tax law time warp?

If you are not lost in a tax law time warp, you can just close your eyes while you read the rest of this post.

But if it turns out that you are lost, you might really like what I am about to tell you here.

I realize most of you probably know this, but sometimes we find that we don’t always know what we need to know because we have had no reason to need to know it yet. (I recently had a conversation with somebody in my real life about this and he did not know it and he was quite happy to hear it. So I decided to write about it. Maybe I can make someone else happy.)

And if you have not sold a house for a long time, you would not necessarily know this. Unless you are as boring as I am and so you like to keep up on tax law changes.

Anyway, when the talk in this thread turned to how individuals view the house size they decide upon when buying in TV, I thought maybe I should write a post about my truly great fondness for the Taxpayer Relief Act of 1997.

Because so many of us here are of an age and because a lot of us have owned several houses through a few decades, we probably have kept folders full of receipts and records of improvements made in all those homes we owned along the way. We were really careful about those records. The receipt for even a can of paint might have been filed in those folders.

We were watching out for our cost basis because of the capital gains law that was in place at the time. Before 1997, the tax law said that $125,000 profit on the sale of a home could be excluded after age 55. I am a little fuzzy on all of that but it seems like it was a once-in-a-lifetime exclusion.

So that was the nod to the 55 and up crowd. All along the way though, up to age 55, the real kicker was that if you sold a house, you had to invest in a more expensive property or pay capital gains tax on the profit, no exclusions. That law was one of the drivers in the real estate market because it helped to drive the philosophy of buying as big as you could afford because, otherwise, you would have to give back a bunch of profit because you would owe capital gains tax on the amount not reinvested in a more expensive home.

But now, that tax law from the 90's means that you just might be able to keep a serious amount of change and not have to pay capital gains tax.

The way it works now is if a homeowner sells a house that has been the primary residence for the qualifying time period, $250,000 in profit can be excluded from a capital gains hit, if the homeowner is single, and $500,000 for a couple. Profit. Tax-free profit..

Under this tax law, you can walk away from a closing table, having sold a house for a significant profit, buy a house that costs less than the one you just sold, and keep all the change – tax free – if the qualifications are met.

This law also applies to any age, no more stuff about being 55 and up. And it is not just once in a lifetime. And so that has driven the market, too, as people sell and buy and sell within the timeframe --well, they used to anyway when the market was hot.

There are still plenty of people who want a big house in retirement, for lots of reasons. But there are many people who don’t. And my guess is that there could be some real estate agents (not all but some) who just might hope that you think you need to buy bigger for tax purposes. Hey. Real estate agents are not supposed to give tax advice anyway. Not their job. And sometimes people might think that it is like the old days and the bigger house still might make sense for tax purposes.

So I just wanted to make sure everybody knew, in case they did not, about the change in the tax law that can let you buy a house for a whole lot less than the one you sold and pocket a lot of change. Just wanted to make sure that everybody had heard about this cha-ching thing.

Here’s a link that tells you more than you probably ever wanted to know about all this. (I could not find the date for this article. Maybe it's on there but I missed it. Of course, anything you read like this has to be checked with a tax accountant before putting it to your own use.)

http://www.bankrate.com/finance/real...-owners-1.aspx

And please remember that my expertise in the field of tax law ranks right alongside my expertise in the field of medicine or the field of investing or the field of financial advising and all those other fields where I can be found wandering and wondering. Heck, I just might be an English major.

Boomer

If you really want to know what will happen, I suggest you watch the series on television "Life after people". That will give you something to worry about. I don't think either that show or The Villages going under is worth losing sleep over.

Does anyone know what the planned oversight structure will be once the developer is out of the picture (except for commercial property interest)? Will the HOA/POA manage the recreation facilities and common areas?