My wife and I are moving once again. Right now we own a house in Hawaii which should have renters moving in right as we move out, after the property manager fees, and any other expenses, I should be paying out about $200/month as a loss. My wife is also going to take on a job which will raise our income significantly. Do I take the risk of buying another house to use as a primary for the time being to get the mortgage write off? As it stands, without any deductions we will fall into the 25% federal tax rate, with the standard deduction we will fall into the 15% federal tax rate. With a house in maryland for the price we want, we will still be n the 15% federal tax rate but at 10s of thousands less taxed. Havent done the total math, but it should only be taxed 15% on ~$30k as opposed to 15%on $72k. Additionally, im sure I could somehow find some other deductions through my IRA/401k/goodwill donations to get it down to 10% federal tax rate. Should we buy a house and take on the responsibilities once again? Or rent a place and save $800/mo for the 2+ years we will be in Maryland? Keep in mind that we have a house in Hawaii which if not rented for a whole month adds up to $2200/mo out of pocket for us. Then when we move out of Maryland, we will also have somewhere near the $3,000 morgage + $2200 from Hawaii which we could be liable for excluding any repairs or natural disasters (cross fingers). Ive pretty much made up my mind, just wondering what you all think?
Unless you plan on retiring in Hawaii, why go through the hassle of dealing with tenants in your home?
Make money when the market goes back up? No I dont plan on retiring in Hawaii, its got it's perks but I miss the northwest. Looking at all this housebuying as investment, I plan on buying another when we settle down more temporarily permanent after Maryland. Also the tax benefits while we reside in that place is just amazing from a house.
But you also have to take into consideration: deadbeat tenants that damage the property; utilities if it is empty, insurance on the rental property.... If you don't plan on returning there to live, I would suggest looking at selling the property and purchasing land in the northwest so when you do retire you already have the place to build your retirement home. Buying the land now will be a lot cheaper than 10-20 years down the line.
Ive thought about that and have taken into consideration those tenants. My property manager has assured me that the ones he rents out, has very little cases of bad tenants ; ) I thought about the land thing, and ill give it some more thought. I love the northwest and want to settle back down there, but I dont know if thats where we will end up. Im also trying to get in the housing market while it is low to sell when it rebounds higher.
Also, another big driving force is taxes. That house would drop my tax requirement by probably over 10,000/year
Unless you plan to retire in Hawaii, I'd sell that thing ricky tick and put it towards land and a cabin.
It can take months to evict non paying tennants if you end up with a tennant who can't make rent for what ever reason.
I cant sell the house, the market dipped even after buying it mid 2010. Id actually gotten over my fear of bad tenants and letting that house get rented until you all started bringing it up! But my thread was about buying a house in maryland, not Hawaii! As for buying land/cabin, I can't do that right now. I dont have the money to buy an investment house. Im in the military so if I bought a cabin and land, I would most likely not have a large rental market as few want to live out in the country, and secondly it would be an investment house which incurs more fees when buying and all than buying one for a primary home.
Personally I think I'd take the hit and sell the house in Hawaii. I wouldn't want the hassle of trying to rent a house that far away.
Well I hired a property manager and from all my friends who have rented out houses in Hawaii it hasnt been too bad on their end. Also the hit we're talking about is like $50,000 so there is no way I am taking that hit.
I don't want to rain on your parade, but a property manager wanting to drum up more business for himself is not going to tell you if he has a high number of bad tenants. That would be counterproductive to him making money off of you.
BTW, thank you for your service. When I first went into the military, I thought about buying some land. I was young and uninformed and passed on several good deals. Now in hindsight, wish I would have bought then. Would have been paid off by the time I retired.
thank you, ive met so many supportive people its been great. Ive been in for a few years, never knew that I could grab pref points while I dont reside in my state of residence. Found out this year and now im accumulating them! I did consider buying land, but the interest rates are higher and out in the NW which is where I want to be, Leasing is not big so ill be forking over alot of money for land. Though now that I think about it, 50-75K should get me some good acreage. If I dont buy this house, I may buy some land. I can only imagine how good of deals you had back in the 30s.
I just did the math. I would be paying ~$21,000 in federal taxes/year with buying no house and keeping mine in Hawaii Or ~$9000 in federal taxes/year with buying a average priced house in Maryland. My wife isn't totally sold on buying another house, but I think at $10,000/year + the investment I kind of want in. If we rented, we would be saving about ~$6000/year + the lower insurance cost and liability but no future investment.
