Should I sell my house

NEW -> Contingent Buyer Assistance Program
<p><em>"Please correct me if I am wrong. Is it not paying tax (25% rate) on the recaputred depreciation a must, regardless of whether depreciation was taken or not? Thank you."</em></p>

<p>Only if the troop decides to rent out the property.</p>

<p>Upon reading troop's original post, it seems she is already renting out the property, so yes, tax liability is incurred on the <strong>allowable</strong> depreciation, whether it is claimed as an expense or not. I think troop and I went over this in some whispered comments, eh troop?</p>
 
<p>Good morning all! Many whispers have come my way asking for hard numbers....so here they are. And if you are at all interested, the property is located a 11 Ferry Road, Chester, CT 06412 ! </p>

<p>Yes, I took out two loans to buy the property. I put down 55K and my first was for 192,500 @ 6.0 %....the 2nd was for 27,500 at 9.5 %. ..............= Total of $ 220,000.00 I made sure to get in writing that there is no pre-payment penalty on either, so that's not a problem. The first is 30 yr fixed, the sencond is also fixed, due in 15.</p>

<p> No, I held out cash in order to pay for the reno. I did not finance the reno, paid all cash. I have no other debt than these two mortgages. I just finished paying off my car loan 3 months ago, and have now been trying to pay off the 2nd (paid $2600.00 this month).</p>

<p>My balances remaining are: 1st $ 187,250.00, 2nd $ 22,225.00 = Total $ 209,475....so say 210K.</p>

<p>My 1st payment is $ 1565.00 PITI.....2nd $231.23 = Total $1796.23 Rent I charge is $ 1375.00 Loss now = $421.23, Loss after paying off 2nd mtg $ 190.00. I will raise her rent $ 25.00 next year so loss will then be $165.00 a month.</p>

<p>The property is in Connecticut, it is a 3/1 SFR on an acre. Zillow currently has it at 281,000...but that's just an interesting fact. I could probably only get about 270K for it right now. </p>

<p>Yes, I did the refi scenario on the *now* outstanding balance of 210K @ 6.5 %. I don't remember what it is, but it jacked up the payment. I hope to pay off the second in cash (if I'm going to keep it) in order to get myself down to that 190.00 loss number. I should be able to do this by next years tax return time.</p>

<p>Stable job, 100K-125K salary, no debt save mortgages, 780 fico. </p>
 
<p>Maybe you should find some good calculators.</p>

<p>Suggestions anyone?</p>
 
<p>Eff....yes, but what the hell will that buy me ?! sigh. Perhaps I just wasn't meant to buy a home here ! One income makes it hard.</p>
 
<p>An extreme simplification:</p>

<p>Using the high-end of your salary (?) of $125,000 x 36% (a safe back-end ratio - using back-end, since you have no debt. Others would argue 28%) puts your budget at a maximum of $45,000 annually.</p>

<p>The $45,000 divided by 12 gives you $3,750. This would have to include principal, interest, taxes, insurance, mello-roos & association fees.</p>

<p>This will not get you into your dream home, barring a total collapse here.</p>

<p>Therefore, this is a factor to weigh when you consider your long-term plans.</p>
 
<p>Oh no, new construction is totally out of the question for me here...perhaps in Palm Springs it MAY become an option...but I was only looking at resale. At this rate, I imagine I can pick up a sweet place in South Central....bars on windows included. </p>

<p>I'll be patient. We'll see what shakes out for me. Thank you all for your comments.</p>
 
<p>Eff,</p>

<p>I, for one, am skeptical about the 3x number.</p>

<p>I think it's far more important to work with debt/income ratios.</p>

<p>The reason I don't like the 3x number is that life is different now from decades past. </p>

<p> In past decades people retired much earlier, and switched into pension living, and needed to be set by the time they were 55.</p>

<p>It's certainly prudent, but I wonder if not too much.</p>

<p>What is your rationale?</p>

<p> </p>
 
<p>Trooper, do you have someone managing your property while you are here on the west coast? We rented our Boston house for a year when we were in CA. It was difficult - even with a relative overseeing the property. I always got nervous during the winter months with pipe freezing, trees tipping over in storms, etc. There's definitely a sigh of relief not having to worry about that house any more. Although I do miss it </p>

<p>On the bright side, we were able to write off a lot because of the rental property. </p>
 
<p><em>Eff....yes, but what the hell will that buy me ?! sigh. Perhaps I just wasn't meant to buy a home here ! One income makes it hard</em></p>

<p>Hey, I'm capped at the low 200's. That'll get me a 1/1 with a so-so commute and no garage. Yes, a flyover state is looking attractive right now.</p>
 
<p>My neighbor keeps an eye on it for me and my renter is simply perfect. I have had only one minor glitch come up so far....ok, it was kind of major....the basement flooded during those torrential rains we had this spring (6 inches in ONE hour ). I've actually commented on this in a previous post. Neighbor came to rescue, other neighbors pitched in the next day and voila....fixed. And don't you know, after 3 phone calls for a bill to be sent.....nothing. They refuse to charge, even though the guy that dug the 5 ft ditch is in that line of work. I sent them all gift certificates. Ah, the East Coast.....</p>

<p>We'll have to talk about those write offs...I'm a newbie to this.. Awgee has helped me a lot.</p>
 
<p>Janet, I like 3x because it's conservative and proven. It stands the test of time across continents and centuries. I agree with you that the world is a different place and it's probably not as credible today as it once was.</p>

<p>However, I'm not ready to conclude that we are on a "whole new economic paradigm" and that paying down a house at age 55 is prudent. Personally, I would like to be semi-retired at 55. I don't want to be a old gray-haired man still doing the 8-5 cubicle asshattery grind, and I'd speculate that Trooper would prefer to not be running after perps at that age, either. </p>
 
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