jamin wrote:
whateverdude11 wrote:
Twenty years ago I bought my house for 119,000. Today it is worth 800,000. Horrible investment
* The amount of money you put into taxes and maintenance was about $(800,000 + 119,000)/2*0.04*20=$367,660, likely more
* If you sell it, you will have to pay about 6% of its value, or $48,000, in various closing costs
* Your capital gain is therefore $265,000 or just over a 100% return in 20 years
* If you invested that $119,000 in the stock market you would have $1,147,908. That's with $0 carrying cost, sales cost, etc., so your return would be 864%. Now it's true that you would have paid rent for those 20 years, but the cost of renting your house probably would add up to only $200,000. That leaves you with $1,147,908-$200,000=$947,908 or a 696% return.
- The taxes are low in the town I live in and they have been deductible so I have recovered 1/3 of the cost. The house value is where it is located. You really think I have paid 367,000 in maintenance and taxes. That's hilarious!
- So, not a big deal. Cost of a transaction. Keep in mind that the house value increase over that time is not actual money I had to work for like the money you burn on rent.
- Sure, right. When you sell off stock you pay major taxes on the capital gain. When I sell my house I can exempt 500,000 federally and all of it on the state level.
You're out of your league kid