The Survival Podcast Forum

Finance and Economics => The Money Board => Investing and Saving => Topic started by: Smurf Hunter on September 19, 2016, 01:17:30 PM

Title: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 19, 2016, 01:17:30 PM
I have many thoughts around this, so I'll attempt to be concise.

We bought our home new in 2007.  Put 20% cash down.  2008 happened and we're still a bit under the closing price from 9 years ago.
This whole time we have been gaining some equity however.  Our place is located on the edge of a metropolitan area.  Some of the older properties have livestock and hobby farms, with public forest land within 10 miles or so further.

Recently violent crime has increased. There were 2 home invasion this past weekend.  One was a double:  perp came in 06:30 on Sunday, and stole the wife's purse while family slept.  Then returned 10:30pm same day and stole a vehicle from the garage (car keys were in the purse). 

To make things worse, our mayor plans to designate our town as a sanctuary for heroin addicts.  Basically we're the lower rent city of the big county, so we'll take the problems in exchange for some political favors.

Many of our neighbors are concerned about our property values declining.  My wife and I are inclined to agree, though we aren't sure either.

Our kids attend a private school about 10 miles away, so as long as we stay within commuting radius of that and my work, we're flexible.  Problem is housing prices increase considerably as we get closer to work and school.

Today I started thinking - what if we sold our house and could extract $100K or so from equity, and rented a place in a better area for approximately what our mortgage costs?  Cash flow would be neutral, but we would miss an equity opportunity on paper.

If I could relive 2008 again, that's exactly what I'd do.  Horde my cash, rent during the crisis and then buy back in on the cheap post-collapse.

Even if there's not a collapse, there's still a chance our property value could decline and this would be a defensively play against that.  We don't want to get "stuck" in an area that's worsening.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: osubuckeye4 on September 19, 2016, 02:16:12 PM
I wouldn't sell primarily because you're afraid that property values could decline. They might decline, they also might rise. No one on here can say for certain which way things will go.



You did cite a number of non-hypothetical reasons to consider selling/moving though:

- Increase in violent crime
- You have equity built up in the home and would be selling at a profit which you could use as a down payment for a home at some point down the road
- Local government adopting policies that you view as unfavorable



I can't tell you what to do because that would be extremely irresponsible of me (I don't know you or your family).

What I can say is... spend way more of your time looking at what is going on now, and spend way less time focusing on what happened 10 years ago, or on potential doomsday scenarios 10 months in the future.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Carl on September 19, 2016, 04:51:21 PM
The real question is "Do you want to relocate?"
ONE        The house must have been worth what you committed to paying for it when you bought it.
TWO       The "VALUE? of houses tends to go down as a neighborhood ages.
THREE     Your house continues to gain value(for you) from your investment in it's equity.
FOUR      It's where you live.
FIVE       The crime thing is a worry, what I would most worry about.

Just my thoughts , as random as my mangled mind can let me type. The copper in your attic must have some real value... :P
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 19, 2016, 05:09:08 PM
I'm not making any hasty decisions, mostly brainstorming out loud.

Thanks for the replies.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: archer on September 19, 2016, 05:54:05 PM
if you sell and dont buy again, i believe you will be hit hard by capital gain taxes.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: FrugalFannie on September 19, 2016, 06:31:40 PM
if you sell and dont buy again, i believe you will be hit hard by capital gain taxes.

no he will not. So long as he lives in the house as his primary residence for at least 2 of the previous 5 years there will be no cap gains tax.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: archer on September 19, 2016, 06:38:15 PM
no he will not. So long as he lives in the house as his primary residence for at least 2 of the previous 5 years there will be no cap gains tax.
ah good. i was not aware of this. thanks.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: mountainmoma on September 19, 2016, 08:49:13 PM
no he will not. So long as he lives in the house as his primary residence for at least 2 of the previous 5 years there will be no cap gains tax.

this is only true if the gain is under a certain amount, which his is, but it is pretty easy to have to pay capitol gains on a house sale, esp if you are single
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: mountainmoma on September 19, 2016, 09:04:52 PM
I would base this decision just on actual safety considerations vs. the benefits of owning your own home. When you own (vs renting) you can have pets, you can change things in the environment to fit your families needs, you have security (no one is going to give you notice to move), etc.....

So, you will need to think hard about how much you think the actual safety is changing -- tough call.

I am not in the city here with problems, if I was, I would think seriously about moving( I am outside of city limits in the county). I actual did move based on these concerns, but it was in early to mid 2008 and I rented out my house here and rented in the location I thought I wanted to move to, so I could check out the concept without as much risk. I ended up coming back here for some personal reasons at the end of the school year (my ex was laid off, the whole world felt off with the whole 2008 crash). So we came back, and then we had an uptick in gang violence in the city here and I kept my youngest homeschooling and out of being bussed into the jr high and high school in this close city. So mostly, we stay away from the drug problem stuff, but we can mostly get away with this due to being out of town, the metric could easily be way different if I was in an area of this city that is experiencing home invasions (same like you described) to get money for drugs.  The experience of renting in the other city was tough, I could not find a rental for a very long time that would allow a dog, and we have a dog. We ended up in an interesting rental because we have pets. I had to put up with energy inefficiencies that I couldt remedy, as it wasnt my house and I couldnt maek changes and I was worried at one point we would be given notice because the landlady decided we had too many cars parked there ( older 2 home from college for xmas break) so, renting is not a piece of cake either.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 19, 2016, 09:49:59 PM
I'm not in constant fear, but the area is in decline.

I was wondering about cap gains.  Lived here since 2007 and high estimate is about 30K less than we paid back then.
So while I've built up equity from paying the mortgage, I think on paper I'd have a loss, and I could reserve my one time gain for later.

I don't really want to rent, and we do have dogs.  My thinking is we could liquidate this place, horde some cash and wait for an opportunity to buy several months later as needed.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Beetle on September 20, 2016, 01:36:53 AM
Are you in Vancouver Smurf?
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: CarbideAndIron on September 20, 2016, 05:25:04 AM
I don't see anything wrong with the idea. My wife and I are planning to do something similar. I bought at the peak in '07, and it took until last year for my house to be valued back above what I paid. Luckily for us, western WA is seeing very good growth as of late. We hope to sell next spring and move to a MUCH less populated area. Then rent for a year or two to decide where we want to buy.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: FrugalFannie on September 20, 2016, 07:48:10 AM
this is only true if the gain is under a certain amount, which his is, but it is pretty easy to have to pay capitol gains on a house sale, esp if you are single

Right
$250K is excluded for individuals and $500K for married couples.

The link explains the guidelines
https://www.irs.gov/businesses/small-businesses-self-employed/sale-of-residence-real-estate-tax-tips
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 20, 2016, 08:09:46 AM
Are you in Vancouver Smurf?

No.  South King County.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: David in MN on September 20, 2016, 09:09:03 AM
First off, a house is not an investment. It's where you live and raise a family. If you want to make a return on what you believe to be a downturn in home values you can do that on paper without gambling your domicile.

If you want to move because you don't like your location, I get it. We're planning to move early next year into a more rural area where I can have orchards and outbuildings to build a shop and art studio and my wife can shoot her bow. We get it.

If you do try to sell out and buy back in there are considerable risks. Interest rates could change, legal hurdles could be introduced, and other issues could arise.

Bottom line for me: Your house is your castle, your sanctuary. You buy it because you love it not because it's an investment.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 20, 2016, 09:16:34 AM
Bottom line for me: Your house is your castle, your sanctuary. You buy it because you love it not because it's an investment.

Like changing jobs - the ideal case is you quit your current job because you love the new one more.
Leaving a job because it sucks and then finding "a" job is not the best process in my mind.

That's the pickle for me, and why the idea of renting ever came up.  We have not yet found our dream home, but I worry by the time we do and have the means, we might be stuck in our current location.

Another issue, one that's off topic is my wife and I have different ideas.  We both want an improved demographic, but she wants to downsize, but go upscale (crime is priced out), while I'm more inclined to go rural.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: David in MN on September 20, 2016, 09:42:20 AM
I feel you. Sometimes it's hard to recognize what the "dream home" is. I'm envious of my cousin's double wide on acreage in the MO Ozarks. It's one of the hardest decisions.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Richard (richard) on September 20, 2016, 10:11:59 AM
To make things worse, our mayor plans to designate our town as a sanctuary for heroin addicts.

I have to ask, what is the incentive for this? Federal money? Churches? (which might receive Federal money for this). I think this needs some serious inquiry.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 20, 2016, 10:27:04 AM
I have to ask, what is the incentive for this? Federal money? Churches? (which might receive Federal money for this). I think this needs some serious inquiry.

I'm sure if we could follow the money we'd know.  I am familiar with the major churches in town and have not heard anything. 

Here are some fun info-graphics:

(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_1.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_2.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_3.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_4.ashx?la=en)
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Carl on September 20, 2016, 10:38:12 AM
 :crazy: Are they going to do this in your house?...you should ask and get a good price for it.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: mountainmoma on September 20, 2016, 10:48:32 AM
I'm sure if we could follow the money we'd know.  I am familiar with the major churches in town and have not heard anything. 

Here are some fun info-graphics:

(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_1.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_2.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_3.ashx?la=en)
(http://kingcounty.gov/~/media/depts/community-human-services/behavioral-health/documents/herointf/heroin_taskforce_posters_Page_4.ashx?la=en)

Ok, so analyzing this : you already have a needle exchange, and it's use has only increased since inception. your use by young people has only increased since inception, and while those seeking treatment has doubled, it is a very low percentage of users, a lower percentage than intial numbers -- most users do not want to quit. They get better results of having people seek treatment if they do not ask them to quit, but substitute a legal free drug for the illegal drug they previously had to purchase. They would like to increase this distribution of the free, legal drug. In addition, they would like to make at least 2 centers where addicts can go and shoot up, out of the weather, warm, food and drink, clean water, free needles and free naproxone and associated medical care if they OD -- and best of all completely free for the rug users and paid for by the tax payers, who will STILL have rising crime to pay for the heroin, cigarettes, booze, and misc others things they want.

As far as the last box of medication treatment saving lives. Well, sure, a legal drug that has consistent doesage has less overdoses than the illegal drug of varying strength. That this treatment hs fewer overdoses than other treatments -- well, yes, if an addict keeps taking the drug they can still overdoes, so the other "treatments" they are comparing to arent real, in that they are not keeping the addict away fromt the drug ! These addicts stay on the legal drug for a LONG TIME , why not ? they basically like self medicting at least to some degree. Cheaper and very effective detox has been done and can be done by keeping the addict AWAY from all drugs, in clinic setting. Heroin actual clears they system relatively quickly, with less problems than some one getting the DT's from getting off of alcohol. Dropping alcohol cold turkey is much more dangerous. But, there is the psycological dependancy. This is where 12 steps or church groups used to get good results, substituting something for this dependancy.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: mountainmoma on September 20, 2016, 01:06:16 PM
As far as following the money

well, the drug companies make out like bandits from these programs, naloxone and methadone sales guaranteed and paid for by taxpayers.

Cetain government agencies and nonprofits get to expand their sphere of influence, their departments, job security, relevance, power
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 20, 2016, 02:36:03 PM
I started reading up on naloxone, and there's a lot of weird info.

It's patent is gone, so potentially any pharma company can make it.
There have been FDA hearings about making in non-prescription, brought on by addicts and their families.
(BTW: who legitimately gets a prescription?  Do heroine users go to their MD and say "I want this just in case I OD"?)
In recent years the manufactured supply has reduced and prices increased 10x

This is starting to feel like the epipen ordeal from last month (people have already forgot their outrage).

It wouldn't shock me to learn that some of these politicians have a financial incentive for these recommendations.
Maybe big pharma campaign contributions or similar?
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 20, 2016, 02:44:18 PM
Apparently you can buy naloxone on Alibaba:

https://www.alibaba.com/showroom/naloxone.html

Maybe we should just create a co-op or multi-level marketing scheme for the junkies.  One junkie pays for his naloxone by getting 5 others to sell it to 5 others...
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Richard (richard) on September 20, 2016, 04:55:30 PM
If you rent you simply do not own anything. You are at the mercy of an owner, they have a multitude of ways of not meeting your expectations. So your house depreciates... when full time RV owners buy a rig they know it will depreciate over time, they don't have a problem with that. You buy a vehicle, it doesn't appreciate, it depreciates. In the meantime you have a place to live that you own. Stand your ground, challenge the forces that artificially bring the value of your homestead down. You figured it was worth your money to buy it for what you paid for it, it's a done deal. Be happy with it.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Stwood on September 20, 2016, 05:22:38 PM
Yes rent money just flies out the window, never to return.
I would (already have 21 years ago) sell  out and move rural. Haven't regretted it a bit.
25 miles to the nearest real grocery store. Yea we've been stuck here for a few days (a couple of times) due to a massive snow/ice storm, but that's what preps are for, no? Lol.
We bought this place to retire on, and that's what we are doing now. (retirement is a full time job though.  :P)  ;D
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: mountainmoma on September 20, 2016, 06:09:47 PM
since they are trying to expand services in your area, shed light on the existing program, for one, ask a hard quesion, like, are needles actually exchanged one for one ? How do you count them ? Do you give more to a person than they bring back ? Hm, since we are givng away 3 times as many needles as years agao, and no see 3x as many OD's, how is that a surprise ? Has free needles nd compassion helped, or could it have helped expand our drug problem by making it easier, cheaper, less dangerous and less stigmatized ?

We have found here that our "needle exchange" is not an exchange at all, it is a give away of needles ( and related accesories). So, we are subsidizing the drug abuse, and we have had at lest 3 children pricked by used needles left lying about, even though concerned (non-addict) adults work hard at getting any they find cleaned up.



Anyways, other people in your area are more likely to be against new expansion if the facts are shown looking at them the other way, not framed as the people pushing for them are doing
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: osubuckeye4 on September 21, 2016, 12:32:56 PM
As far as the drug stuff... sometimes it's cheaper for a county/state/province to "subsidize" the use, rather than let uninsured addicts (most hardcore crack/heroin users scrap insurance to spend that money on drugs) overdose and end up in already overcrowded ER's/ICU's where they will be a much bigger financial burden on the community/state/country, or, end up committing major crimes to finance their drug habit.


I'm not saying that I'm a big supporter (or a supporter at all) of using taxpayer dollars for any of this stuff, but it's a lot more complex than "the politicians are in bed with big pharma and are running an elaborate ruse to put additional money in their pockets".


Getting off topic though, I'm gonna shut up now and defer back to my initial comment as far as the sell/rent question. Focus on the now, rather than what happened in the past or what you think might happen 18-36 months from now. I can come up with a lot of doomsday scenarios, but I could also come up with a lot of ways that things are going to end up fine as well. I will say though... if you legitimately feel unsafe for yourself or your family, trust your gut and get out of there ASAP.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: endurance on September 21, 2016, 12:58:48 PM
I guess I wouldn't leave without having somewhere you want to land more than where you are at. While I don't oppose renting and holding onto cash, leaving where you are for nothing certain doesn't sound like an improvement either.

Owning a home that could be upside-down prevents mobility. It means you can't leave if the job market turns bad without defaulting on a loan and ruining your credit. But as bad as where you are now, never doubt worse. There's always worse.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Richard (richard) on September 21, 2016, 02:02:28 PM
As far as your concern about your neighborhood going downhill, where in America aren't they? We live in a small town of 1200, nearest big city is about 50,000 and 20 miles away. The closest interstate is over 20 miles away and we are on the way to nowhere anyone wants to get to. It is 99.9% caucasian, $50,000 average yearly family income, stable job market, excellent education facilities..... across the street from us there have been 2 drug busts in the last several years involving heroin. Meth labs are a major problem in the rural county. There are home invasions..... you get the picture? This is epidemic in this country, the kind of stuff that use to happen only in the seedy parts of big cities is all over. You can't get away from it, you have to get involved in your community to rescue it. Do not keep your head down, get around town and look for opportunities to challenge decadence. Go city council meetings, join the volunteer fire department, start a neighborhood watch program. (I'm doing some of this stuff now, and more).
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Carl on September 21, 2016, 02:13:12 PM
As far as your concern about your neighborhood going downhill, where in America aren't they? We live in a small town of 1200, nearest big city is about 50,000 and 20 miles away. The closest interstate is over 20 miles away and we are on the way to nowhere anyone wants to get to. It is 99.9% caucasian, $50,000 average yearly family income, stable job market, excellent education facilities..... across the street from us there have been 2 drug busts in the last several years involving heroin. Meth labs are a major problem in the rural county. There are home invasions..... you get the picture? This is epidemic in this country, the kind of stuff that use to happen only in the seedy parts of big cities is all over. You can't get away from it, you have to get involved in your community to rescue it. Do not keep your head down, get around town and look for opportunities to challenge decadence. Go city council meetings, join the volunteer fire department, start a neighborhood watch program. (I'm doing some of this stuff now, and more).

Smurf Hunter is actually quite active with neighborhood watch Scouting ,Ham radio and as a volunteer CERT (Citizens Emergency Response Team) etc and this actually expose an observant person to a bit of overload.Few people get exposed to the level of crime in even small towns....I think it is mostly due to the man separating  the people from religion
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 21, 2016, 06:27:19 PM
Smurf Hunter is actually quite active with neighborhood watch Scouting ,Ham radio and as a volunteer CERT (Citizens Emergency Response Team) etc and this actually expose an observant person to a bit of overload.Few people get exposed to the level of crime in even small towns....I think it is mostly due to the man separating  the people from religion

It's possible I'm OVER aware of things and it's causing me undue stress.  If I had my head someplace else, I'd probably be more relaxed :D

On Monday there was a bank robbery across the street from the supermarket I frequent.

Today (Wednesday) there was a bank robbery at a different bank, that shares the same parking lot as out city EOC (emergency operations center where CERT/ham and others meet regularly), and a block from city hall and the police station.  This robbery ended in a gun battle, with the suspect shot.  I'm waiting to hear if I know the officer involved.

Neither of these events make my family necessarily less safe, but it does build up emotionally I suppose.  Maybe I should watch more TV or play Xbox?
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Carl on September 21, 2016, 06:35:19 PM
It's possible I'm OVER aware of things and it's causing me undue stress.  If I had my head someplace else, I'd probably be more relaxed :D

On Monday there was a bank robbery across the street from the supermarket I frequent.

Today (Wednesday) there was a bank robbery at a different bank, that shares the same parking lot as out city EOC (emergency operations center where CERT/ham and others meet regularly), and a block from city hall and the police station.  This robbery ended in a gun battle, with the suspect shot.  I'm waiting to hear if I know the officer involved.

Neither of these events make my family necessarily less safe, but it does build up emotionally I suppose.  Maybe I should watch more TV or play Xbox?

Try some diversion to take your mind off you areas trouble.Trouble won't go away,but you might feel better.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Richard (richard) on September 21, 2016, 07:47:33 PM
I humbly retract my advice.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: racer038 on September 21, 2016, 08:07:46 PM
Here in Kentucky  / Indiana, rental costs are higher than ownership, when comparing apples to apples.  I can really only see one universal advantage of renting:  you are not tied down.  In a recession, owning ones house can reduce versatility in looking for a job.  A family's possibilities are limitless when not anchored to a home that won't sell.  Look at this from a relocation perspective.  If you are tied to the area in such a way that you would not relocate to find work in a recession, stay where you are.  Of course, keep an eye on the # of rental homes within a 1/2 mile radius of your current home.  If more and more homes are being purchased as rentals, the writing may be on the wall. 
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 21, 2016, 08:39:40 PM
I humbly retract my advice.

No worries my friend.  Your advice is probably applicable to 9 of 10 people out there.  I'm the lone weirdo  :o
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Jeremy Downing on September 22, 2016, 04:09:05 AM
Smurf,

Do you like living in WA? Would you pick that state if you could live anywhere? I ask in part because I look at WA as a possible place to settle. From a distance their balance of freedoms, tax burdens, landscape and climate seem a potential fit for my family.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: CarbideAndIron on September 22, 2016, 07:03:31 AM
Today (Wednesday) there was a bank robbery at a different bank, that shares the same parking lot as out city EOC (emergency operations center where CERT/ham and others meet regularly), and a block from city hall and the police station.  This robbery ended in a gun battle, with the suspect shot.  I'm waiting to hear if I know the officer involved.

I work in your town, commute here from a close, small town in Pierce Co. It's getting bad around here. Between the huge population influx (which brings traffic, crime, etc...), and the very high rent rates, the family and I are planning on heading to the CDA/Spokane area after we sell. The rent is WAY higher than my mortgage, and we are sick of the area.

Smurf,

Do you like living in WA? Would you pick that state if you could live anywhere? I ask in part because I look at WA as a possible place to settle. From a distance their balance of freedoms, tax burdens, landscape and climate seem a potential fit for my family.

Jeremy,
My .02$. This is a very beautiful place to live, with very mild climate. I have lived here the majority of my life, and it's changing for the worse. Unless you move here from LA or NYC, you'll probably find the traffic and cost of living in western WA to be awful. Eastern WA is like a totally different state pretty much. Definitely come visit and look into housing, etc...before moving to western Wa.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on September 22, 2016, 09:43:38 AM
Smurf,

Do you like living in WA? Would you pick that state if you could live anywhere? I ask in part because I look at WA as a possible place to settle. From a distance their balance of freedoms, tax burdens, landscape and climate seem a potential fit for my family.

+1 to what CarbideAndIron posted

That said, there's a lot of rural/secluded locations in western WA too.  The Olympia peninsula, Kitsap, San Juan Islands...
The downside is those locations are difficult to get too, as you either need to drive around to a land bridge or take a ferry boat to get to the population centers.
There's some beautiful property with marine views and even waterfront available inexpensively.  That wouldn't work if I had to commute into the city, but if I was retired or otherwise self-sufficient, I might strongly consider something on the west side of Puget Sound.

While I favor the politics and culture of Spokane/CDL, I like the green trees and blue oceans enough to make it tough to leave this region.

"politics" is an interesting factor.  You can look at the political views of a population, and you can look at the actual laws/taxes/regulations in place.
Taxes are creeping, more so in metro areas, but for the moment WA is relatively relaxed for a lot of regulations.  Then again, my baseline is CA, so maybe I'm not a good source.

My experience has been in lightly populated areas, living around pseudo-socialists is completely different than inside an urban area.
Personally I don't need my neighbors to agree or think like me.  I only object when my liberties are threatened.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Jeremy Downing on September 22, 2016, 10:21:20 AM
Thanks Smurf and Carbide.

My wife and I are planning a trip to explore the Seattle area next summer. We explored Denver this summer and Austin a couple years before. I have a suspicion I'll fall in love with the area because it's full of stuff I enjoy, green trees, mountains, ocean, coffee...  Also, I'm a firmware/software/electrical engineer and she's an accountant so finding work there 'shouldn't' be too big a deal.

The visit will help us figure it out.

Of note, I thought I would love Denver and did not. Too damned dry. I didn't think I would like Austin and loved it. Had a blast in Austin.

Who knows?  :)
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: CarbideAndIron on September 22, 2016, 11:31:20 AM
Thanks Smurf and Carbide.

My wife and I are planning a trip to explore the Seattle area next summer. We explored Denver this summer and Austin a couple years before. I have a suspicion I'll fall in love with the area because it's full of stuff I enjoy, green trees, mountains, ocean, coffee...  Also, I'm a firmware/software/electrical engineer and she's an accountant so finding work there 'shouldn't' be too big a deal.

The visit will help us figure it out.

Of note, I thought I would love Denver and did not. Too damned dry. I didn't think I would like Austin and loved it. Had a blast in Austin.

Who knows?  :)

Lots of jobs in your industry on the east side of Seattle. Bellevue/Redmond area. 15 miles towards the Cascades from there, and you could be living in some really beautiful foot hills. You will probably like it here.
My favorite thing about here, is that I'm 30min from work, and a short drive the opposite direction puts me pretty far into the woods with no one around.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: 12th man on September 26, 2016, 01:52:45 PM
thought about renting your house?

Not sure how far north you are...i am south of Salem. I wound up renting my last house out because selling it would only let me break even. This turned out to be a great investment, or has so far. Rent is going up around here pretty fast, nothing like Portland, but still fast. Not sure what going on further north. Also property values have risen to the highest i have see yet and are predicted to keep going up. i dont think this can hold much longer, wages, at least in this area, are not going up very fast. I think we will see another downturn in the next few years. I hope to sell in a couple years before that happens, sit on the money, then reinvest after RE goes down. But, whatever happens, if i were to have sold it 4 years ago i would have gotten nothing. and that is my long winded point. What you are really risking is what profit you can get from selling the house. keep in mind that you will wind up spending 10% of the total sell price on brokers and closing costs.

Anyways here are a few things i have learned that might help you if you were thinking about renting out your place...

run through a fake tax year to see what renting will do for you. you cannot deduct your mortgage, only the interest. Depreciation is only on the value of your house, not property and goes back to the original purchase valve if it is lower than the current value. You can wind up paying to rent your house out in some cases.

you can also simply run through a tax scenario where you sell, its different if you sell  a rental. you will be subject to capital gains, but its not actually that bad. it is a sliding scale and if you income is not very high you may not pay anything at all.

Learn rental laws. there are free guides out there. its not complicated, but #1 always always always get 1st and last months rent. this is so you can get paid rent (from the last month's prepayment you got) while going thru the 30 day eviction process. And watch out for bankruptcy. theoretically a renter who declares bankruptcy can live in your house rent free until the bankruptcy is complete. I put a clause in my rental contract, hopefully i never have to see if it will hold up.

If you want to pull any money out of the house (HELOC or loan) do it before you move out. Once you rent it this is pretty much out of the question.

if you have any questions about this kind of thing, i would be happy to try and answer them.

HEROIN - truly the work of the devil. it is now the cheapest high out there. i think we are going to  see alot more young people dying from this in the near term. I have done a bit of research on it lately as a young family member of mine has gotten caught up in it. It consumes it's user. i believe the best chance is immediate inpatient care. This country is not prepared for that. there are places out there, but just try and get in. I did (not for me) it doesn't work. they are already overloaded. i think these places are like most retirement homes (senior care facilities). Glorified feed lots run for profit and staffed by underpaid, under qualified personnel that really could care less. (no offense if you are one of the few that do care)
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: notmyrealname on October 10, 2016, 12:13:34 PM
Home invasions + heroin addicts = GTFO.

Just what I would do. I would not want to stick around there.  Haven't read the whole thread, but YES, I would get out.  Find a safer neighborhood, and don't wait around to see what happens.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: osubuckeye4 on October 11, 2016, 07:38:42 AM
Home invasions + heroin addicts = GTFO.

Just what I would do. I would not want to stick around there.  Haven't read the whole thread, but YES, I would get out.  Find a safer neighborhood, and don't wait around to see what happens.

If you're trying to escape heroin OD's... good luck, that's everywhere these days  :(


The home invasions are another matter. That's definitely more concerning and shows that the police and community could be losing control of the neighborhood.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on October 11, 2016, 07:42:43 AM
If you're trying to escape heroin OD's... good luck, that's everywhere these days  :(


The home invasions are another matter. That's definitely more concerning and shows that the police and community could be losing control of the neighborhood.

In a city of 80,000 residents, a home invasion every other month is statistically nothing - but we're SO networked with neighborhood groups on social media, police apps on our phones, etc.  I literally get alerted to every serious crime, so it's very present in my mind.

Last week a 17 year old was shot dead sitting in a parked car.  They apprehended a perp.  Say it's gang related.  I guess that should make us feel better, as they don't target innocent citizens?
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: osubuckeye4 on October 11, 2016, 10:48:57 AM
In a city of 80,000 residents, a home invasion every other month is statistically nothing - but we're SO networked with neighborhood groups on social media, police apps on our phones, etc.  I literally get alerted to every serious crime, so it's very present in my mind.

Last week a 17 year old was shot dead sitting in a parked car.  They apprehended a perp.  Say it's gang related.  I guess that should make us feel better, as they don't target innocent citizens?

Yea, you need to do that balancing act of assessing legitimate risk, while not letting the ease of access to information overwhelm you.


Living on the outskirts of Chicago, I see a ton of it out here. Some of my friends choose to move into horrible neighborhoods because they figure the price is good and nothing bad could happen to them (ignoring legitimate risk). Others are living in $600,000 condos in affluent north side neighborhoods and are legitimately freaking out about the shootings on the south side (information overload, choose to create risk where little exists), which might not be THAT far distance wise... but culture/risk wise are basically a world away from where they are.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: msparks on November 28, 2016, 10:38:09 AM
I'm not in constant fear, but the area is in decline.

I was wondering about cap gains.  Lived here since 2007 and high estimate is about 30K less than we paid back then.
So while I've built up equity from paying the mortgage, I think on paper I'd have a loss, and I could reserve my one time gain for later.

I don't really want to rent, and we do have dogs.  My thinking is we could liquidate this place, horde some cash and wait for an opportunity to buy several months later as needed.

If you have the potential to move and see your current area declining then selling only makes sense. Having cash to make it through an upcoming decline only makes sense. I wouldn't call it hording though, but having 6 months to one year in cash is really just a cautions  thing to do.

Our area is actaully pretty stable and they are still building, but most of the houses in our area are 2500 sq/ft or larger. We're sitting right at 1100 and there are not that many of our type of house in this area. We're planning on a cash out refi very soon as we have about $60 in equity.
Title: Re: sell my house and rent in anticipation of declining property value?
Post by: Smurf Hunter on November 28, 2016, 11:15:06 AM
If you have the potential to move and see your current area declining then selling only makes sense. Having cash to make it through an upcoming decline only makes sense. I wouldn't call it hording though, but having 6 months to one year in cash is really just a cautions  thing to do.

Our area is actaully pretty stable and they are still building, but most of the houses in our area are 2500 sq/ft or larger. We're sitting right at 1100 and there are not that many of our type of house in this area. We're planning on a cash out refi very soon as we have about $60 in equity.

Too late.  Refinanced down to a 20 year loan (was 30).  Only save $150/month, but building equity faster.