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Re: How much does that paid off house cost you?
Old 04-11-2005, 04:11 AM   #21
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Re: How much does that paid off house cost you?

You know, this "travel" thing is interesting. So many retirees (early or traditional) list "travel" as their no.
one goal. I have traveled quite a bit but have no real
strong desire to do much. I used to like long motorcycle trips, but that was more for the biking than the travel. The PT lifestyle has absolutely no appeal.
We really need a home base (or in our case, 2 of them).
"Travel" generally is of no interest, and I don't think it is just an age thing. Believe I would feel the same way if I was 20 years younger.

JG
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Re: How much does that paid off house cost you?
Old 04-11-2005, 05:47 AM   #22
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Re: How much does that paid off house cost you?

Quote:
I have been wrestling with this topic as well. My scenario is that I have a motorhome, which I intend to drive a lot around the good ol' USA. DW requires some form of stabilty - which she defines as some place to leave life's accumulation of (junk) treasures. I on the other hand, prefer to travel as light and as constantly as humanly possible, and explore this beautiful world.
Have you checked out www.escapees.com for any ideas? One option for lower maintenance is a condo. But you might not want to buy a condo that gets used only a couple of months a year. Once we rented an apartment to a couple of retirees that only used the apartment for two or three months in the summer. What wonderful tenants! We charged them less because we could keep the heat down in the apartment in the winter. You might be able to negotiate for a lower rent.

We also have looked into full time rv life. Like your wife I am hesitant to give up the roots in case it doesn't work out. I would play it out for a year and see how it goes. Kind of off the topic, but be sure to look at the issue of state residency, whether there is a need for a street address, and health insurance coverage. I know of a couple who bought an RV with intentions of fulltime travel and found that their retiree health plan really only covered them in their home state of Michigan.
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Re: How much does that paid off house cost you?
Old 04-11-2005, 06:35 AM   #23
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Re: How much does that paid off house cost you?

I can't put my finger on it - but the 'travel bug' died off rapidly in ER - down to stay at home sticks in the mud.

Rv'ing, travel/long distance vacations to get outta Dodge were big during working years and the first few years of ER.

Since we live in an area where people 'outta the city' come to spend summers - used to get razzed by friends on 'why we were going somewhere else on vacation?'
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Re: How much does that paid off house cost you?
Old 04-11-2005, 06:49 AM   #24
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Re: How much does that paid off house cost you?

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I can't put my finger on it - but the 'travel bug' died off rapidly in ER - down to stay at home sticks in the mud.

Rv'ing, travel/long distance vacations to get outta Dodge were big during working years and the first few years of ER.

Since we live in an area where people 'outta the city' come to spend summers - used to get razzed by friends on 'why we were going somewhere else on vacation?'

I grew up in NoLa and used to consider it one of the two best large cities in USA, with the other being San Francisco. Hey, that might be a good new topic, best big city in USA, and why. Anyway, my old man used to work on A Streetcar named Desire, no kidding. I still think New Orleans is wunnerful, and return often to see relatives and the city.

It is true that your city's residents don't travel very much. They always seem to have a party going on, sorta like living in the Caribbean. The Cajuns know how to live. Hunting, fishing, trawling, beer, crab boils, and the French Quarter. Only problem is their lifestyle seems to take them out too early.
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Re: How much does that paid off house cost you?
Old 04-11-2005, 07:33 AM   #25
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Re: How much does that paid off house cost you?

Re. "Best big city in USA?" Yeah, that would be interesting. Although I have visited a great many, I can
only claim to be well acquainted with a few, namely

Chicago
Milwaukee
Detroit
St. Louis
Dallas

Man, from that list, Dallas wins in a walk..................

JG
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Re: How much does that paid off house cost you?
Old 04-11-2005, 07:45 AM   #26
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Re: How much does that paid off house cost you?

Addressing the two topics that have morphed here:

Paid off house costs:
For our paid-off house in Arizona: $9000 per year with everything (prop. tax, utilities, cable/internet, insurance, minor fix-ups, no sewer because we're on septic). So $4500 per year per person versus close to $15,000 I was/still am paying by myself for my unpaid for house in Sacramento.

Re: Fulltime RVing and options.


A lower-cost option for folks looking to "have it all" (RV and a bricks and mortar base) is to think about RV residential parks where you can buy a parking pad and also put a casita up on site. There are several parks like this in Yuma that cater to snowbirds and I believe the pads sell in the $30K range. If you're fulltiming you'll probably want to head south for the winter and plant yourself in the sunbelt. Arizona, Southern California, parts of Texas and Florida are the logical locations and these RV parks with building options are worth looking into.
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Re: How much does that paid off house cost you?
Old 04-11-2005, 08:21 AM   #27
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Re: How much does that paid off house cost you?

I've got about 15 years of rental data for the 6 free n'clear property's I maintain. Below are the average % of rent used to keep them up:

Maintenance: 15%
Taxes: 12%
Insurance: 3%
Water/Sewage: 2%
Vacancy: 5%

So a little less than 40% of the rents go to keeping it up. Of course this will fluctuate in any given month. This is why I maintain that only 50% - or less - of the rents should be allotted to a mortgage.

Enjoy!
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Re: How much does that paid off house cost you?
Old 04-11-2005, 10:09 AM   #28
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Re: How much does that paid off house cost you?

But part of the mortgage goes into equity, so depending on amortization, you aren't paying, your "investing" that portion, so that needs to be deducted. Right now I'm paying about 1100 a month in interest, 400 a month in taxes/insurance. My last apartment was 1300 a month plus 50 bucks renter's insurance. Now, four years later it's renting for 1800/mo. Since my house is new, I'm still under warranty (5 years on a ten year warranty left) so my maintenence cost has been pretty low, but I have spent money on upgrading my homestead. Still, it's good to have these things in perspective, homeownership may not be as good of a deal as it seems. But it's the only way I could have added 300k to my net worth in 4 years.


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Re: How much does that paid off house cost you?
Old 04-11-2005, 10:11 AM   #29
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Re: How much does that paid off house cost you?

If anyone is interested: Although not a "pure" investment, here are the numbers
for our condo (% of rent) as if it were rented out 100%
of the time:

Maint/assoc dues/utilities 32%
Taxes 13%
Management 8%
Insurance 8%
Vacancy 8%

Not that exciting, except it was "bought right" as they
say.

JG

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Re: How much does that paid off house cost you?
Old 04-11-2005, 03:55 PM   #30
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Re: How much does that paid off house cost you?

Quote:
*But it's the only way I could have added 300k to my net worth in 4 years. *
Not really. SInce it was a pure stroke of luck, you also could have won the lottery, or invested in a stock that produced out of range returns, or any other three sigma events. Your reasoning reminds me of people I met in the late 90s who explained that tech/dot-coms were the "only way I could have made so much...."

One difference with house is that the Fed will probably sacrifice the country before it lets homeowners go down, so any bust will be softened whenever possible.

Mikey
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Re: How much does that paid off house cost you?
Old 04-11-2005, 04:10 PM   #31
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Re: How much does that paid off house cost you?

Quote:
I've got about 15 years of rental data for the 6 free n'clear property's I maintain. *Below are the average % of rent used to keep them up:

Maintenance: 15%
Taxes: 12%
Insurance: 3%
Water/Sewage: 2%
Vacancy: 5%

So a little less than 40% of the rents go to keeping it up. *Of course this will fluctuate in any given month. *This is why I maintain that only 50% - or less - of the rents should be allotted to a mortgage.
Thanks Tryan for this very useful info. And, John, thank you for yours.

One thing I draw from this is that in normal markets prices will often be bid beyond where a single-family or a condo for rental will make sense- except as a speculation on future appreciation in rents and/or selling prices. This is because most people will not be as conservative as Tryan is- they just aren't organized enough to know what the costs really are, or they are too optimistic to believe it if they are told.

Another thing is more subtle, but perhaps also true. Since 40 to 50% of rent goes to cash costs, the renter doesn't give up much relative to a *condo owner for example. *The renter is exposed to the full brunt of rental increases- but the condo owner is exposed to 40 -50% of increases. Better for sure, but perhaps not worth the opportunity costs, and the considerable loss of freedom.

Personally, I would only want a condo if it were in a concrete building, in a quality urban area. In an apartment, if your neighbors are annoying or the neighborhood is undergoing negative change, you are out of there with minimal costs. Not so in a condo. IMO, condos combine most of the disadvantages of owning with most of the disadvantages of renting.

Mikey
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Re: How much does that paid off house cost you?
Old 04-11-2005, 04:48 PM   #32
 
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Re: How much does that paid off house cost you?

I just ran my report out of Quicken for 2004 and my costs for Staying in my paid off house were about $10,350.

This includes Taxes, Utilities, Association Dues (which includes Mowing, Shoveling, Exterior Maint, Ins.,Garbage). No Phone Just Elec, Heat, Water.
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Re: How much does that paid off house cost you?
Old 04-11-2005, 05:19 PM   #33
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Re: How much does that paid off house cost you?

Well, maybe Mikey, but Southern California real estate has been a pretty good bet for some time. I would count winning the Lotto as a pure stroke of luck, but investing in real estate far from it. The fact that I had a better than usual run meant there was some luck involved, but that wasn't the only factor. I meant "the only way" as a manner of speaking, just like when someone says, "every time I...." ...it's not literal. Thus, the smiley face. I wouldn't let statistics paralyze you from taking advantage of outliers.

I agree Condo living could well be the worst of both worlds, but I haven't done it so can't say. Obviously this debate has left out some intangible benefits of house ownership, like potential for better crime rates, freedom of action with your dwelling (not asking permission to paint the walls etc.). A personal desicion, buy vs. rent, that can't just be decided on a cost analysis.
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Re: How much does that paid off house cost you?
Old 04-12-2005, 06:40 AM   #34
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Re: How much does that paid off house cost you?

Quote:
or they are too optimistic to believe it if they are told.
The RE "professionals" are a well oiled machine to keep the buyers head in the clouds. Buyer realtors, home inspectors, appraisers and loan officers looking after they're own interests to keep the deal "on" so everyone gets paid.

Enjoy!
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Re: How much does that paid off house cost you?
Old 04-12-2005, 08:16 AM   #35
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Re: How much does that paid off house cost you?

The wifes ex-house (as of this morning!!!) ran us about $2000 a year...most of that property tax, homeowners and flood insurance. The utilities were almost negligible. If you consider that she did nearly nothing to the place for 14 years and then we did a full exterior and nearly full interior remodel for about $50k, that would make the cost about $5500 a year.

Our new place runs about $2500 a year excluding utilities. I do all of the maintenance myself. Like several other california dwellers, I took the stucco exterior/concrete tile roof option. No exterior maintenance except a little painting and caulking for the rest of my life.

As far as gains, I guess I should buy a lottery ticket as I've made big money on all four homes I've owned since 1985. In fact, I've made over $450,000 in tax free capital gains in the last 2 years on homes owned for ~7 years, and I'm sitting on a ~$100k gain increase in my current home.

To hell with the stock market
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Re: How much does that paid off house cost you?
Old 04-12-2005, 08:27 AM   #36
 
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Re: How much does that paid off house cost you?

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As far as gains, I guess I should buy a lottery ticket as I've made big money on all four homes I've owned since 1985. In fact, I've made over $450,000 in tax free capital gains in the last 2 years on homes owned for ~7 years, and I'm sitting on a ~$100k gain increase in my current home.

To hell with the stock market
Can you say Irrational exuberance?
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Re: How much does that paid off house cost you?
Old 04-12-2005, 08:45 AM   #37
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Re: How much does that paid off house cost you?

You do have to love it when you find it...

Not a lot of complications in the formula...pick a region where real estate tends to rise, find an area in that region where prices are either depressed or they havent kept up with the rest of the region due to some factor that is soon to be resolved, be value conscious in your choice, and dont put too much money into the place. I broke that last rule on the wifes old house, but we got more than our money back.

Place I'm living in now ought to keep going up. The main downsides are a lot of welfare folks living in the area and no clean commute into the big city. I bought it for the cost of construction, landscaping and other improvements plus about $5-10k for the land (quarter acre in the back of an 8 home cul-de-sac).

As far as the community goes, real estate prices have tripled and quadrupled in the last 5 years. A nice 3 bedroom 1 bath on a .33 acre lot like my wifes old house could have been had for $60-80k 5 years ago. All of a sudden one out of three homes in that area have seen a major remodel and renters have been moved out for a new buyer. So I imagine over the next 3-5 years the welfare renters will move to less expensive areas and be replaced with buyers.

For the lousy commute options to "the city" (couple of one-lane-each-way meandering roads that go through a half dozen town centers full of red lights), one of them is being currently widened to 3 lanes each way from the heart of the city to...3 miles from my house.

I expect the current area to drive up another $100k+ during the next 2-5 years as people realize that they can either buy $1M homes east of the city or the same house for half that to the north where I live, and get the same or better commute.

Given the disparity between rents and owning in this area, I'd love to move into a rental. I couldnt stand moving again right now though, and rentals with 3 cats and 3 dogs can be a real problem. So we'll stick around a while longer and then maybe look for the next buying opportunity...
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Re: How much does that paid off house cost you?
Old 04-12-2005, 10:52 AM   #38
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Re: How much does that paid off house cost you?

TH: Those capital gains do take the edge off of living in Yuba City, Huh?
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Re: How much does that paid off house cost you?
Old 04-12-2005, 12:42 PM   #39
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Re: How much does that paid off house cost you?

Boy oh boy - you California cats just suck!

Can you hear me grinding my teeth? I worked with aerospacers who got substantial boosts to their retirement funds in the 80's, and 90's from Ca RE - when will it end?

Now - just where in Ca do I move after the next hurricane wipes me out?

Heh, heh, heh, heh.

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Hale Nords expenses.
Old 04-12-2005, 05:55 PM   #40
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Hale Nords expenses.

Here's the 2004 data (no gas, no heat, no air conditioning):
$592 Insurance
$1572 Property tax ($2026 in 2005)
$957 Electricity (solar array will drop this below $700)
$297 Community association dues
$345 Telephone-- land line
$388 DSL
$230 CATV
$847 Water/sewer

$5228 TOTAL
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