How Much You Make Vs. How much your House Is Worth

Combined income: $110,000.

Bought: at $200,000 and then did $40,000 in renovations.

House value: Who knows these days but wishfully high $200s?

House is 2,500 sq. ft., on a lake, w/1.1 acres. Never thought I would live in such a nice house/location.

Pre-Tax Income: $160,000

Assessed Value of Home: $240,000

asdfasdfas wrote:

I don't know where you live, but in general that is BS. In my state, you will pay about 2k in property taxes for a 500k house. In a place like CA, you will pay about 5k. The highest state (there will be some localities with higher rates) rate is about 1.8% or less than 10k a year.

Not in ithaca. In Ithaca, I believe the property tax rate is closing in 4% a year.

On a $500,000 house, you would pay $20,000 a year in property taxes. I know that sounds crazy for people who don't live in NY but it's true.

Proof is here:

and here:

rojo I don't think you're reading those tables properly if you come up with $20K on a $500K house. The highest I see, based on a mill rate of ~ 20, is about $10K.

I may be reading the tables wrong, but I expect not.

random guy who knows stuff wrote:

rojo I don't think you're reading those tables properly if you come up with $20K on a $500K house. The highest I see, based on a mill rate of ~ 20, is about $10K.

I may be reading the tables wrong, but I expect not.

You're not.

I feel your pain, man. Americans have dealt with that in the past. The first house I ever bought was mortaged at 12.5% interest, bought down from 14.0% (early 80's). $85K mortgage and I made $25K/year, pre-tax. It sucked - heavily.

random guy who knows stuff wrote:

random a hole wrote:He was speaking of his particular home. ... Learn that that not all circumstances fit nicely into your generalities.

Exactly, he was speaking of his own particular home. YOU were speaking in generalities.

Clearly this toic is beyond your grasp. Don't worry, you're not to blame. It's your parents' fault.

he said his home didn't drop in value because it is in a good location / good schools. the value could have been bid up into the stratosphere because it had good location / good schools. i don't want people to continually spread misinformation about how prices work (like i live in a good location so there is protection from falling home prices).

in fact, price volatility in high end markets tends to be more extreme

really don't care, most simple asset pricing concepts are difficult for people to grasp but people need to stop being sold the idea that house prices, no matter what the market, can't go down

Earn: 300k

House: mobile home that my parents purchased.

FoghornLonghorn wrote:

Make about 250K, house is worth about a mil give or take a hunnert-K (Bay Area, Ca - 5br/2.5bath 2500sqft). Bought it a long time ago and have no mortgage. Hmmm, I've learned that I can't afford it. Shit, thanks for telling me that.

Do you have 4 kids or did you just buy way too much house?

schmuck wrote: town has little-to-no crime, luxury cars at every intersection, luxurious golf courses, and over 100 miles of horse trails that have been in place for over 75 years. It's what the rest of America wants to be.

I love it.

Sounds kinda douchey.

rojo wrote:

asdfasdfas wrote:

I don't know where you live, but in general that is BS. In my state, you will pay about 2k in property taxes for a 500k house. In a place like CA, you will pay about 5k. The highest state (there will be some localities with higher rates) rate is about 1.8% or less than 10k a year.

Not in ithaca. In Ithaca, I believe the property tax rate is closing in 4% a year.

On a $500,000 house, you would pay $20,000 a year in property taxes. I know that sounds crazy for people who don't live in NY but it's true.

Proof is here:

http://www.tompkins-co.org/assessment/taxrates.html

and here:

http://www.city-data.com/forum/new-york/101367-ithaca-new-york-3.html

I bought my house in SoCal 8 years ago when I retired early from high tech and went into coaching. Houses in the neighborhood are presently listed for ~$700K. Mine has a taxable value of $550K and taxes are $5600.

And contrary to what you might hear, the value of my house has gone up by about 40% during this period.

My primary source of income is investing. You obviously can't afford a house in this neighborhood on a D1 coach's salary.

obviousquestion wrote:

We just bought an investment property for 10K. You don't need a fortune to buy a house.

.

Yes, maybe you can take advantage of someone else's misfortune and pick up a foreclosed piece of property cheap.

i currently make 0 per annum. house is worth 1.3mil.

I make less than 30K a year and my mortgage is 133K. Bought the house for 169K. The crazy thing is that without rental income I make barely 20K a year. Somehow, I do just fine.

Mortgage is 840

Rental income 820

Paycheck 1600-2200

Utilities 50-100

Food 400

The New UncleB wrote:

obviousquestion wrote:

We just bought an investment property for 10K. You don't need a fortune to buy a house.

.

Yes, maybe you can take advantage of someone else's misfortune and pick up a foreclosed piece of property cheap.

You are taking advantage of the entity that made the loan, not the person who lost it. This foreclosure mess has been like hitting the lottery for me. I have bought about a dozen rental properties in the 10k to 15k range and another half dozen that I have remodelled and sold.

I probably make about 40k a year. (midwest)

Home is converted 4,200 sq ft. commercial property I bought for 43k. Added a 2,000 sq ft garage for 35k a couple years ago. (paid cash so no mortgage at all)

A quick google (and your document) suggests a tax rate of between 1.9% and 2.9% (i.e. not close to 4). A quick zillow2009 $13,958 -- $540,0002009 $12,133 -- $450,000 Also sugests that the rate is less than 3%.I definitely don't know the exact taxes in Ithaca (i.e. in a lot o places you don't pay taxes on the full price of the house, there are discounts for certain residents,...), but I see zero evidence that the tax rate is close to 4%. So the OP has the choice of paying 14k a year for his house in taxes or he can pay a mortgage/rent on some place else. If he buys a 250k house (I have no idea what the house market in Ithaca is ), He will pay ~7k in taxes+ leaving 7k to pay his mortgage. I doubt that is a net win. Hell if some gives you a free house, you can do a reverse mortgage to pay the taxes if you don't have the cash. Living rent free/tax free for 25+ years will really help your finances.At the end of the day, you will always find some one willing to live live super cheap. That is fine. But you have to decide if you will be happier with money in the bank versus spend on goods. My current house is about 1/3 of my income. If I bought a house in NYC, it would be 2x my income. I see no reason to buy a 20k sq ft house where I am living but I would be unwilling to live in a 800 sq ft living space right now.

rojo wrote:

asdfasdfas wrote:

I don't know where you live, but in general that is BS. In my state, you will pay about 2k in property taxes for a 500k house. In a place like CA, you will pay about 5k. The highest state (there will be some localities with higher rates) rate is about 1.8% or less than 10k a year.

Not in ithaca. In Ithaca, I believe the property tax rate is closing in 4% a year.

On a $500,000 house, you would pay $20,000 a year in property taxes. I know that sounds crazy for people who don't live in NY but it's true.

Proof is here:

http://www.tompkins-co.org/assessment/taxrates.html

and here:

http://www.city-data.com/forum/new-york/101367-ithaca-new-york-3.html

Had three kids. All three kids are launched and it's just the wife and I rattling around in too big of a house. Still, it WAS too big of a house. I grew up with 9 brothers/sisters in a 1400 sq foot 4BR house. We all somehow survived.

Strange to see no one mentioning the old standby of approx 27% of monthly gross as monthly mortgage payment. Secondly, interesting to see vast differences in house values posted by LetsRun group. Certainly indicates that location is a key factor, along with income in that location. On the east and west coasts, I would venture to guess homes under $250,000 are hard to find (especially near metropolitan areas, even hard to find decent homes in the $300,000 range. Property taxes are also all over the place. A house in NJ valued at $450,000 has an annual tax of $10,000, while the same house in De near the beach area is less than #2,000. So goes the world.

The old ways of single incomes being able to afford buying a house is all but gone in most areas of the country, thus making it difficult for single people to own a house, unless their income is over $100,000.

3-4x income is easier for most people to do that math on than 27% works out the same.If you want to live on the coasts, 100k doesn't cut it if you want to be a homeowner unless you really want to extend your self. For 95% of the country by area, 60k is enough for you to buy a decent house. 60k is not an unreasonable salary anywhere if you have been working for a couple of years.