Author Topic: These Homeowners Decided to Rent Again  (Read 1479 times)

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Offline irvinehomeowner

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Re: These Homeowners Decided to Rent Again
« Reply #15 on: June 29, 2022, 04:05:53 PM »
California renters could save $112,000 vs. owning over 5 years

https://www.ocregister.com/2022/06/29/california-renters-could-save-112000-vs-owning-over-5-years/

I know some won't agree with me but the principal repayment portion of the loan should be excluded from this calculation as it's paying yourself in the form of building equity but then add a repair/capital improvement budget per month (amount depends on the age of the home).

Something rarely considered in these rental parity comparisons.
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Offline CalBears96

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Re: California renters could save $112,000 vs. owning over 5 years
« Reply #16 on: June 29, 2022, 04:22:13 PM »
California renters could save $112,000 vs. owning over 5 years

https://www.ocregister.com/2022/06/29/california-renters-could-save-112000-vs-owning-over-5-years/

It's laughable that the author of the article just assumes 1.5% property tax across the board for owners.

Why is that laughable?  I think the more egregious assumption is that owners can save 20% of interest and taxes as a deduction on their income tax.  With the higher standard deduction, SALT cap, and 750k cap on mortgage interest, most buyers aren't saving 20% as a deduction.

Because property tax is ~1%. Most areas don't have MR, so assuming 1.5% is laughable.

But I do agree that 20% tax deduction is also not right.

Offline Liar Loan

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Re: California renters could save $112,000 vs. owning over 5 years
« Reply #17 on: June 30, 2022, 07:11:26 PM »
California renters could save $112,000 vs. owning over 5 years

https://www.ocregister.com/2022/06/29/california-renters-could-save-112000-vs-owning-over-5-years/

It's laughable that the author of the article just assumes 1.5% property tax across the board for owners.

Why is that laughable?  I think the more egregious assumption is that owners can save 20% of interest and taxes as a deduction on their income tax.  With the higher standard deduction, SALT cap, and 750k cap on mortgage interest, most buyers aren't saving 20% as a deduction.

Because property tax is ~1%. Most areas don't have MR, so assuming 1.5% is laughable.

But I do agree that 20% tax deduction is also not right.

A lot of OC is between 1.1-1.2% when you add in the bond measures and other assorted fees they tack on.  My IE rentals included trash service for two units (basically 2x what an SFR would pay), which pushed the rate above 1.5%. 

One reason I wanted to sell was because a large sewer project was being proposed that would have pushed my tax rate even higher as they planned to bill for the upgrades on a per unit basis.  That would have been detrimental to the monthly cashflow and would have lowered the property value for prospective investors in the future.

 

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