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Housing Madness

Housing Madness

Old Sep 20th 2007, 3:21 pm
  #1  
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Default Housing Madness

Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
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Old Sep 20th 2007, 3:25 pm
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Default Re: Housing Madness

you are right roland, it's the taxes and other hidden costs in home ownership that peeps living overseas don't realise
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Old Sep 20th 2007, 3:30 pm
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Default Re: Housing Madness

Originally Posted by Roland Hulme View Post
Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
are the specs turning a slightly different shade of rose?

America is 100,000 different housing markets. You live in new jersey and would not have the same issue in the mid-west or south

renting for 5 years does not offer the benefit you discuss since property taxes are deductible on your federal return, as is mortgage interest.

And high interest account very shortly is not likely to offer more than 4.5% before tax

thats ignoring also that across 5 years you could reasonably expect you house to appreciate somewhat, especially since its in a crappy state of repair now
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Old Sep 20th 2007, 3:31 pm
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Default Re: Housing Madness

Originally Posted by Roland Hulme View Post
Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
Everything you've said is 100% true..... for New Jersey.
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Old Sep 20th 2007, 3:37 pm
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Default Re: Housing Madness

we were seeing house in ohio for twice that value and taxes were only $8k per annum.
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Old Sep 20th 2007, 3:42 pm
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Default Re: Housing Madness

NJ's property taxes are the highest in the country...that's one of the main reasons people don't stay here to retire...along with auto insurance rates, healthcare, utilities etc etc etc. That's the price you pay to live so close to NYC.
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Old Sep 20th 2007, 3:45 pm
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Default Re: Housing Madness

Hmmm...I'm a new home owner myself. We just bought our first one in July. Our house is a nice 3 bd/3ba, in a decent subdivision. Put us back a nice $179k. As a new homeowner, I'm still learning all the ins & outs, and benefits. We are in the South (sorta) so taxes and housing cost isn't as bad as up in New England area. We only pay about $1800/yr (less than 1%).

The first thing that our mortgage broker (who's a friend of my mom) said was "do not choose a house that you will become a slave to."

Good luck in your decision.

Last edited by Bluegrass Lass; Sep 20th 2007 at 3:49 pm.
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Old Sep 20th 2007, 3:51 pm
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Default Re: Housing Madness

this is quite a useful website regarding property taxes etc ~

http://www.propertyshowrooms.com/usa...operty-tax.asp
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Old Sep 20th 2007, 4:03 pm
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Default Re: Housing Madness

Originally Posted by sunflwrgrl13 View Post
Hmmm...I'm a new home owner myself. We just bought our first one in July. Our house is a nice 3 bd/3ba, in a decent subdivision. Put us back a nice $179k. As a new homeowner, I'm still learning all the ins & outs, and benefits. We are in the South (sorta) so taxes and housing cost isn't as bad as up in New England area. We only pay about $1800/yr (less than 1%).

The first thing that our mortgage broker (who's a friend of my mom) said was "do not choose a house that you will become a slave to."

Good luck in your decision.
That's similar to us, I think we pay .7%.
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Old Sep 20th 2007, 4:09 pm
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Default Re: Housing Madness

Originally Posted by Roland Hulme View Post
Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
Depends what you want. We bought because we wanted somewhere to live in the town we are in and rents were about the same as the mortgage and property tax we pay, our mortgage and tax come to about the figure you quoted and our mortgage is definitely higher than $250,000 (iwe were paying over $1500 a month for a one bedroom apartment - admittedly a so called luxury apartment in the next town over). The house gives us stability - we don't have to worry about rent increases (in our last year of renting they increased the rent by over 5%) and we plan to live here for a long time.
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Old Sep 20th 2007, 4:12 pm
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Default Re: Housing Madness

Originally Posted by Roland Hulme View Post
Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
Come to California, $250,000 gets you eemmmm nothing.
$500,000 gets you a tiny house in the sticks with a long commute
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Old Sep 20th 2007, 4:16 pm
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Default Re: Housing Madness

Originally Posted by another bloody yank View Post
That's similar to us, I think we pay .7%.
I pay 2.5% here in Chicago. :curse: Although, the parks, schools and public pools in my area are so nice, they have to be seen to be believed.

What enrages me about property taxes is that they are taken on an after tax basis. In other words, you're paying them out of your take-home pay rather than out of your gross pay. I thought double taxation was illegal? I guess not.
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Old Sep 20th 2007, 4:19 pm
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Default Re: Housing Madness

Originally Posted by Roland Hulme View Post
I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.
I remember when you were just a young whippersnapper saying that America was wonderful and England was shit and we were all wrong.

Roland man.........it sucks don't it, you never get ahead no matter how hard you try. call me cynical if ya want, but life is tough no matter where ya live.
It makes me laugh when welders from Leeds seem to think by moving to Australia they'll be able to live in a great house with a pool and a couple of 4x4's on the driveway..........

it's delusional.

life is a struggle.
in New York, Sydney, Manchester, Darfur...........(ok, the last one maybe a bit more of a struggle)
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Old Sep 20th 2007, 4:27 pm
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Post Re: Housing Madness

Originally Posted by Roland Hulme View Post
Getting new ideas and concepts into my head is kind of like teaching a suet pudding to do long division - i.e. pretty much impossible and very frustrating.

However, my stodgy old opinions do change from time to time and one of the things I'm realising you lot have been right about the whole time long is HOUSES.

I sat down with the missus to look very seriously into the question of buying a house in New Jersey and no matter how it adds up, it just doesn't make any financial sense whatsoever.

The house opposite - a nice little four bedroomed place in a pretty crappy state of repair - is going for $250,000. BARGIN, says I. But the property tax is about 6k a year. Roughly $500 a month.

So on top of the $2,000 mortgage a month (twice our current rent) you'd have to pay $500 in taxes. That's pretty much put us in a pasta-for-dinner-everynight-of-the-week and domestic-beer-only-and-not-during-the-week-even-as-a-treat kind of situation and after living like that in England for four years (although we were renting at the time - thanks Gordon Brown) methinks: Screw that.

Seriously. Let's just rent for 5 years and stick that $1,500 a month into a high interest account. At the end you'd have $75,000 saved up whereas if we'd bought the house we'd have paid $30,000 in taxes and sure-as-shite not paid off $75,000 of our mortgage.

I mean, am I missing something here? Is home ownership really so insane in America? In England $250,000 might have barely bought you a terraced shoebox with indoor plumbing, but at least property tax was only £1,200 a year instead of nearly three times that.

At least then, your hard earned wages would go towards paying off your mortgage instead of paying for garbage trucks to run down your mailbox every week.

I would LOVE to have any thoughts or opinions - I defer to your experience and knowledge.

We live 18 miles west of Manhatten and the letter from the town hall estimates our housing tax for 2007 to be $12,287... (for a small 3 bedroomed house!). However, we do live in what is considered a stellar school district.

If the realtors fees weren't a whopping 6% I would happily move as our son is no longer in high school....

I do know of a few people who are about to retire and they're all moving to North Carolina where taxes are much cheaper.

To the O/P; buy or borrow the book 'House Buying for Dummies' or similar (they have a large selection of house buying or renting books in B&N or Borders) and maybe you can glean some info.

If you're thinking of having children (I'm assuming you don't have them already) then you will need to consider living in the best possible school district that you can afford. We had to do the trade-off between house size and school district so we are in a small house. You can always put an extension on a house but you can't move the location of it and if you are in a crap school district the house price will never appreciate as much as one in a better school district, even if one is never going to have kids.....this was remarked on in the 'Dummies' book.

It is alarming how much housing taxes can cost though.....there are some houses for sale in our town where the annual tax is in excess of $90k!
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Old Sep 20th 2007, 4:28 pm
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Default Re: Housing Madness

Originally Posted by another bloody yank View Post
That's similar to us, I think we pay .7%.
think ours is 6.25% with some local counties adding on a further 2%.
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