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Old 04-30-2014, 08:27 PM   #61
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Well that is my point, although if you bought before 2006 I am curious if you would have made out better buying Apple stock and just renting.

I did not get lucky in our house, probably worth 50k less than we paid 13 years ago.
In Seattle? That seems hard to explain. There was a pretty good run-up to maybe 2005-2007. Although the mortgage induced crash knocked that for loop, many areas have recovered, though not to the speculative highs right before the downturn started. If you have owned for 13 years, taking you back to 2001, I would have thought that you would have a reasonable profit. Is your particular area not participating in the recent job and population growth?

Ha
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Old 04-30-2014, 10:00 PM   #62
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In Seattle? That seems hard to explain. There was a pretty good run-up to maybe 2005-2007. Although the mortgage induced crash knocked that for loop, many areas have recovered, though not to the speculative highs right before the downturn started. If you have owned for 13 years, taking you back to 2001, I would have thought that you would have a reasonable profit. Is your particular area not participating in the recent job and population growth?

Ha
Well outside of the Seattle area (takes about 50 minutes to get to downtown from our house with no traffic). I guess that is why they say location location location.

It is ok though. Unlucky in house, lucky in stock market, everything balances.
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Old 04-30-2014, 10:42 PM   #63
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Yep, and we just bagged Toyota's U.S. headquarters.
Nice...and we bagged Exxon's:

A helicopter tour of the Woodlands and Exxon Mobil's new campus (Video) - Houston Business Journal
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Old 05-01-2014, 12:36 AM   #64
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Maybe renting is like putting your money in CDs. Safe and predictable. You will not get the big capital gains nor take any capital losses..
More like a bond than a CD. -you could be forced to move at the end of a lease, which is like a bond being called early. Or Rent can be increased, sort of like rising interest rates lowering your bond's value...
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Old 05-01-2014, 05:50 AM   #65
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In my opinion it's a lifestyle choice. To me there's no choice, even if owning is a little more expensive. I'm not even sure about that. When we paid off our mortgage our mortgage payment was much less than what rental rates were at the time. Even factoring in capital improvements and maintenance I can't find much difference. It only makes sense that the costs are there whether your a renter or owner. The only difference is that I can sell one my houses when I'm done with it. I can't say the same for the condo's I've rented over the years. Good investment or bad it's still cash in the end.
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Old 05-01-2014, 07:11 AM   #66
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I don't have any data, but I've always felt that the cost of owning a house goes up exponentially with the size.

A 3000 sq ft house doesn't cost twice as much to run as a 1500 sq ft house...more like 3X when you factor in heat, maintenance, landscaping, snowplowing, extra TVs, etc etc etc.

Secondly, I've never viewed my main residence as an 'investment'. I believe you end up making bad decisions as a result. A friend once wanted a swimming pool so badly...his wife insisted it would bring down the resale/property value so he never got a pool. He died unhappy but his 'investment' value stayed high.
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Old 05-01-2014, 08:34 AM   #67
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On owning vs. renting... Two hypothetical cases covering mom and dad at age 80. In both cases, their expenses are $40,000/yr. They are living on Social Security, and a dwindling nest egg of $200,000.
They plan to withdraw $20,000/yr from capital savings to supplement their $20,00 in Social Security. This means they can live to age 90.

Dad has Dementia to the point that mom can't take care of him and he must be hospitalized. He will live on for three more years @ $100,000/yr nursing home costs.

Case #1... Mom and dad, are renting their home.
They will have to pay for dad's nursing home costs out of their savings, until they have spent the nest egg down to $50,000, at whcih point the state medicaid will pay for the nursing home care. When dad passes away, mom will have social security (for one person) and $50,000 in assets, to last her the rest of her life.

Case #2... Mom and dad own their home, valued at $150,000. The state will take all but $50,000 of their nest egg, before paying for the nursing home. The state will not take their home. This means that when dad passes away, mom's net worth will be the home... $150,000, plus the $50,000. A total of $200,000.

just sayin'
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Old 05-01-2014, 08:43 AM   #68
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On owning vs. renting... Two hypothetical cases covering mom and dad at age 80. In both cases, their expenses are $40,000/yr. They are living on Social Security, and a dwindling nest egg of $200,000.
They plan to withdraw $20,000/yr from capital savings to supplement their $20,00 in Social Security. This means they can live to age 90.

Dad has Dementia to the point that mom can't take care of him and he must be hospitalized. He will live on for three more years @ $100,000/yr nursing home costs.

Case #1... Mom and dad, are renting their home.
They will have to pay for dad's nursing home costs out of their savings, until they have spent the nest egg down to $50,000, at whcih point the state medicaid will pay for the nursing home care. When dad passes away, mom will have social security (for one person) and $50,000 in assets, to last her the rest of her life.

Case #2... Mom and dad own their home, valued at $150,000. The state will take all but $50,000 of their nest egg, before paying for the nursing home. The state will not take their home. This means that when dad passes away, mom's net worth will be the home... $150,000, plus the $50,000. A total of $200,000.

just sayin'
This is an excellent point that should not be overlooked. We are all concerned about long term planning and need to factor in the numerous advantages of an owned primary residence.
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Old 05-01-2014, 08:52 AM   #69
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What if dad had $150,000 in gold and silver coins in a safety deposit box?
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Old 05-01-2014, 08:56 AM   #70
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I hope dad remember where he hid the gold despite his Alzheimer, or left instructions behind for his offsprings ("X marks the spot").

See: California couple strikes gold after finding $10 million in rare coins - CNN.com.
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Old 05-01-2014, 10:16 AM   #71
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I don't have any data, but I've always felt that the cost of owning a house goes up exponentially with the size.



A 3000 sq ft house doesn't cost twice as much to run as a 1500 sq ft house...more like 3X when you factor in heat, maintenance, landscaping, snowplowing, extra TVs, etc etc etc.



Secondly, I've never viewed my main residence as an 'investment'. I believe you end up making bad decisions as a result. A friend once wanted a swimming pool so badly...his wife insisted it would bring down the resale/property value so he never got a pool. He died unhappy but his 'investment' value stayed high.

I would have to agree based on Fermions post of $5,000 a year in maintenance. I have spent about 12k over 10 years and that includes a new roof a few months ago, outside a/c unit, and water heater last summer. Not much left to go wrong for several years... I hope.


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Old 05-01-2014, 10:31 AM   #72
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What if dad had $150,000 in gold and silver coins in a safety deposit box?
...couple of points here:
Dad would have had to make the decision 5 years before he went into the nursing home. Have to understand the 5 year look back, and criminal liability.

The example was a $150,000 home... Depending on the state, that could have been more than an $800,000 exclusion.

Five years in the nursing home would have diminished your inheritance by $500,000.

somethin' to think about...
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Reflecting on this...
Old 05-01-2014, 10:52 AM   #73
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Reflecting on this...

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The example was a $150,000 home... Depending on the state, that could have been more than an $800,000 exclusion.

Five years in the nursing home would have diminished your inheritance by $500,000.

somethin' to think about...
That is something to think about. So, if it seems one of my parents may go into nursing care, one strategy to protect their assets for the other spouse, is for them to purchase a home prior to going into the nursing home of at least $500K value? Then when the parent in the nursing home passes, the surviving spouse could sell the house and live off that money? Can the state take the money upon the sale of the house to recover costs?

Just curious. My parents have LTC insurance that is pretty good (I think). They are both retired from the fed govt. Just wondering about this strategy in general.
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Old 05-01-2014, 10:55 AM   #74
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Interesting thread. For our house Quicken has the following expenses for the last 15 years:

Property taxes..... 57,485
Insurance........... 15,568
Appliances.......... 10,049
Improvements..... 25,909 (things not required but we chose to do, e.g. finish basement)
Maintenance........ 14,888 (regular/preventative maintenance actions)
Repairs............... 12,279
Supplies.............. 12,853
-------------------------
149,031 (9,935/year, 828/month)

We are planning slightly higher ($900/month) for retirement. Add in our mortgage ($620/month), and the total is $1520/month for our housing.
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Old 05-01-2014, 11:20 AM   #75
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That is something to think about. So, if it seems one of my parents may go into nursing care, one strategy to protect their assets for the other spouse, is for them to purchase a home prior to going into the nursing home of at least $500K value? Then when the parent in the nursing home passes, the surviving spouse could sell the house and live off that money? Can the state take the money upon the sale of the house to recover costs?

Just curious. My parents have LTC insurance that is pretty good (I think). They are both retired from the fed govt. Just wondering about this strategy in general.
A little too complicated to go through here, though we've had a older thread that posited different viewpoints. It's an arguable legal subject. In fact, up until now, most states have not elected to sue to recover medicaid costs. My personal experience, with stepfather's estate (he continued to live in the home when my mom went into a nursing home)... .(I was not an heir) there was no attempt at recovery, and my stepsister's family inherited the house when he died. The current value of that home is about $800K, though not at the time of his demise.
one site that has many more links on the subject:
Protecting Your House from Medicaid Estate Recovery | ElderLawAnswers

There is much written on this, and an hour of poking around the web could be worthwhile. Other than that, an eldercare lawyer.
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Old 05-01-2014, 11:25 AM   #76
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I would say that often the very best way to keep some funds on ice between husband and wife is to get divorced. Then you have to keep an eye on all the gotchas where you can be deemed to be married in fact. I think that is likely pretty easy and safe.

Ha
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Old 05-01-2014, 11:26 AM   #77
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That is something to think about. So, if it seems one of my parents may go into nursing care, one strategy to protect their assets for the other spouse, is for them to purchase a home prior to going into the nursing home of at least $500K value? Then when the parent in the nursing home passes, the surviving spouse could sell the house and live off that money? Can the state take the money upon the sale of the house to recover costs?

Just curious. My parents have LTC insurance that is pretty good (I think). They are both retired from the fed govt. Just wondering about this strategy in general.
There is a five year lookback - so they have to buy the house five years before entering the nursing home.

If there is a relocation - it must be for the same price or less - or it's deemed to be hiding assets from the medicade point of view.

In Imolduru's example - he added $150k in assets to the example of the owned home. It's apples to oranges.

Depending on the state - the "community spouse" (the one not in the nursing home) can get some of the SS and/or pension of the person in the nursing home - it depends. And depending on total assets - a little more than $100k can be set aside for the community spouse - that's the max and assumes they have more than double that.

Very few assets are excluded from the medicade spend down. Jewelry is included if it was purchased during the 5 year lookback. The gold coins ARE definitely included. Burial parts, 1 car, and the primary residence, furniture and older jewelry are about the only things excluded. Even gifts to kids/grandkids will be looked at during the 5 year lookback. So if Mom or Dad gives you a chunk of $ - be prepared to give it back or use the equivilant to pay the nursing home.
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Old 05-01-2014, 11:52 AM   #78
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More specific Q & A's that might be helpful in considering the benefits and pitfalls of medicare.
Medicaid Planning | ElderLawAnswers
Quoting numbers and legal factors is difficult, as they are subject to state laws, and not uniform.

While the spend-down could be to as high as $120K, it could also (dpending on state laws), go down to as low as $25K... That would be the cash amount that the stay home spouse could keep before Medicaid would pay.

Rodi...
I didn't understand the apples/oranges comment... did I miss something/
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Old 05-01-2014, 12:42 PM   #79
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What if you buy an annuity for your spouse before you go in the nursing home (say 5+ years before). Can they force your spouse to cash out the annuity or claim all of the future income from the annuity against the nursing home costs?
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Old 05-01-2014, 01:06 PM   #80
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What if you buy an annuity for your spouse before you go in the nursing home (say 5+ years before). Can they force your spouse to cash out the annuity or claim all of the future income from the annuity against the nursing home costs?
I believe the answer is yes. Also for cash value insurance. But not term life. But check my info.
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