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Old 11-07-2015, 07:11 AM   #21
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Originally Posted by NW-Bound View Post
The total cost to operate and maintain my 2 homes runs about 4%/yr of their total values, as averaged over the last 5 years.

The above includes all utilities, taxes, insurance, and also maintenance and updates. I am not in a high RE tax state like Texas.
This is helpful. I think I am more about 3% at my weekend house and .75% at my DC row house. The DC house is about twice as valuable as the weekend place (that .75 would be more like 2 or more for an equivalent house in a more reasonably priced area) but the weekend place is way more expensive since it is free standing (more exposed) has a lot of grounds and a pool, and requires more hired help to maintain. It is more valuable than an equivalent house that wasn't waterfront so I suspect NW's 4% is a better rule of thumb.
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Old 11-07-2015, 07:22 AM   #22
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Originally Posted by RunningBum View Post
Not sure which I find most entertaining:

- The notion that the answers to the questions give one any useful information whatsoever, especially since many don't list their location (and also that the question somehow only applies to those who have paid off their house);

- ERD's response, which I agree with;

- or the number of people who dutifully respond with their own numbers
what I find interesting and baffling is the number of people who when they don't like a question respond rudely instead of moving on.


Is there an entrance test on this site?? lol you have to verify that your question are deemed important before posting??

If you don't think the question is useful, why insult those of us who wish to participate.

Any plans on kicking old ladies today?
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Old 11-07-2015, 07:27 AM   #23
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Op,
Ignore the nasty people. this is an internet chat spot, feel free to ask any ole thing you wish. as long as you are not breaking moderator rules, you're free to do so.




Anyhoo, my expenses on my last house which I sold to relocate.


These are monthly


1,000. Property taxes
100.00 home insurance
75.00 on minor upkeep (not big repairs like roof or appliance replacement)
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Old 11-07-2015, 07:31 AM   #24
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Wait a second...why pay off the mortgage? My CPA told us we NEED to have this large of a mortgage or we will jump up in tax rates, we're in Illinois.

So...doesn't being mortgage free have to do with how to get the lowest tax classification when in retirement?

Thanks
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Old 11-07-2015, 07:43 AM   #25
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The link posted by REWahoo was instructive for me. GA is apparently right in the middle, #25/50. The following information is not a big secret.

Atlanta suburbs
All numbers are approximate.
The tax bill prices the house at $310K.

Tax $320
Ins $80
HOA $50

I think house maintenance has many other costs but this is what OP asked for.
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Old 11-07-2015, 07:58 AM   #26
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Originally Posted by donheff View Post
This is helpful. I think I am more about 3% at my weekend house and .75% at my DC row house. The DC house is about twice as valuable as the weekend place (that .75 would be more like 2 or more for an equivalent house in a more reasonably priced area) but the weekend place is way more expensive since it is free standing (more exposed) has a lot of grounds and a pool, and requires more hired help to maintain. It is more valuable than an equivalent house that wasn't waterfront so I suspect NW's 4% is a better rule of thumb.
The housing operating cost indeed varies greatly from place to place, even if expressed as percentage of the home value. If my homes were in Southern CA, their values would be about 3x more, but I doubt that the maintenance cost would increase that much because the labor and material costs do not go up by that ratio.

The 4%/yr I quoted for the last 5 years included some expensive maintenance and updates on both homes, which should not be recurrent (siding replacement, roof repair, kitchen counter replacement). I just pulled it off Quicken and did not classify these further than that, but together it runs about 5% for the last 5 years (1%/yr for the 2 homes together).

For reference, my urban home is in the metropolitan Phoenix, while my 2nd home is in the high country of AZ. RE taxes are not bad here. They run about 0.6%/yr of the home market values.

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Originally Posted by FUEGO View Post
... $3000/yr utilities...
You made me look. My urban home electric+water bills run $4K/yr. My high country home costs $700/yr. The 2nd place needs no AC cooling, uses little water (no pool, no vegetable garden), and we are not there much in the winter, else it could cost a lot more for heating.
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Old 11-07-2015, 08:05 AM   #27
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Indiana house assessed @ $200k and $250K market price
Prop tax $2,100
Ins $950


Florida house assessed $190K and $300K market price
Prop tax $ 3,900/year
Ins $25/year Liability only


Michigan boat slip assessed $30,000 and $45,000 market price
Prop tax $1,200/year
HOA $980/year


My own assessment is that I seem to have the good fortune of under-assessing assessors.
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Old 11-07-2015, 08:50 AM   #28
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1,443 Electricity
_ 897 Water, Sewer, Trash
_ 983 Natural Gas
2,506 Real Estate Tax
_ 779 HO Insurance + Umbrella
1,780 Major Repairs/Replacements
-----------------------------
8,388 Total

CPI adjusted average for last 8 years.
1,250 sq ft house, appraised for $150k in Iowa.
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Old 11-07-2015, 08:55 AM   #29
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I gave you our numbers above.

I think the average from the Consumer Expenditures Survey is interesting.
This is the average for 600 older couples who are homeowners.

1,633 Electricity
_ 660 Water, sewer, trash, ...
_ 740 Heating fuels
3,071 Property taxes
_ 611 Homeowners insurance
1,806 House maint, repairs, flooring
_ 282 Major appliances
-----------------------
8,803 Total
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Old 11-07-2015, 09:04 AM   #30
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Paid off $50,000 864 sq.ft. house in small town ND:

taxes - $50 per month
insurance - $60 per month
utilities - $300 per month
routine maintenance - $70 per month

There is a picture of my home in my "misc" photo album.
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Old 11-07-2015, 09:28 AM   #31
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SE Arizona, $250K home, property taxes $2600/yr, insurance $450/yr, HOA $125/yr.
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Old 11-07-2015, 09:30 AM   #32
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Originally Posted by bclover View Post
what I find interesting and baffling is the number of people who when they don't like a question respond rudely instead of moving on.

Is there an entrance test on this site?? lol you have to verify that your question are deemed important before posting??

If you don't think the question is useful, why insult those of us who wish to participate.

Any plans on kicking old ladies today?
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Originally Posted by bclover View Post
Op,
Ignore the nasty people. this is an internet chat spot, feel free to ask any ole thing you wish. as long as you are not breaking moderator rules, you're free to do so. ...
Seriously, who is being 'nasty' or 'rude' here - posters who try to dig a little to find out what the OP is really looking for, and how the question being asked probably won't help them in their search, and offer constructive alternatives - or someone who categorizes those posters as 'nasty', and 'old lady kickers'?

I routinely find that here, and in real life, people ask questions to learn something, but often the question is misdirected. It happens often with me and people who ask me tech questions about their computers and/or gadgets. Their question may strike me as rather odd, and would require a very complex and convoluted, and maybe $$$ answer. When I probe further, and try to find out what problem they are trying to solve, it often turns out the answer is very simple, and often at $0.

That is 'rude' and 'nasty', and worthy of 'old lady kicking' accusations? Not in my book.

-ERD50
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Old 11-07-2015, 09:37 AM   #33
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Originally Posted by Cheesehead View Post
Wait a second...why pay off the mortgage? My CPA told us we NEED to have this large of a mortgage or we will jump up in tax rates, we're in Illinois.

So...doesn't being mortgage free have to do with how to get the lowest tax classification when in retirement?

Thanks
I'd suggest you do the math yourself. It should be easy to back the mortgage interest (only interest, the principal portion of the payment is not tax deductible) out of your tax form, and see what effect it has on your total taxes.

Remember, only the amount above the higher tax bracket is taxed at the higher rate. The mortgage interest isn't going to effect anything other than the mortgage interest. It doesn't 'push' other income into a higher bracket (though a higher taxable income might affect some phase outs of other credits/deductions?).

So if you are in a 25% marginal tax bracket, you get 25% of the mortgage interest back in the form of lower taxes. Probably not a reason to hold a mortgage or not by itself, but it might be a factor.

-ERD50
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Old 11-07-2015, 10:07 AM   #34
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I would agree with ERD50 on the whole mortgage issue. Paying off a mortgage may help with cash flow in retirement, but if you are close to paying off a mortgage and/or have a very low rate you aren't paying much in interest rates anyway, and paying on principal is not going to change your overall net worth. Whether you have $100K in a CD or home equity it doesn't change your total net worth. And in some states it may be better for asset protection to have the money in a CD in a retirement account instead of home equity.

If you have a $100K mortgage at 3% tax deductible interest and $100K invested in a CD in an IRA at 3% tax deferred interest, why would paying off your mortgage be a milestone event?

However, if rates go up to 6% you can pocket the difference and if they go down you can choose to pay off your mortgage or refinance again at that time. I think when interest rates are low, statistically the odds are in one's favor of keeping a mortgage over the next 10 - 30 years and pocketing the difference in interest rates as the mortgage rates will stay fixed and the investment returns will likely rise.
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Old 11-07-2015, 10:09 AM   #35
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Originally Posted by Cheesehead View Post
Wait a second...why pay off the mortgage? My CPA told us we NEED to have this large of a mortgage or we will jump up in tax rates, we're in Illinois.

So...doesn't being mortgage free have to do with how to get the lowest tax classification when in retirement?

Thanks
Um, hold on... If you are drawing a paycheck anyway, then sure the mortgage deduction might help lower your income and change your bracket. But if you are in withdrawal mode, the mortgage is extra income you have to produce and pay out which increases your income needs and could increase your tax bracket.


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Old 11-07-2015, 10:11 AM   #36
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ERD50 is a big boy who doesn't need me to defend him, but I will say that I don't read harshness or rudeness into his posts. He is just very matter-of-fact.
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Old 11-07-2015, 10:12 AM   #37
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Uh-oh, are we turning this into a "whether to pay off the mortgage" thread? I don't think the OP meant for it to go that way....
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Old 11-07-2015, 10:14 AM   #38
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Seriously, who is being 'nasty' or 'rude' here - posters who try to dig a little to find out what the OP is really looking for, and how the question being asked probably won't help them in their search, and offer constructive alternatives - or someone who categorizes those posters as 'nasty', and 'old lady kickers'?

I routinely find that here, and in real life, people ask questions to learn something, but often the question is misdirected. It happens often with me and people who ask me tech questions about their computers and/or gadgets. Their question may strike me as rather odd, and would require a very complex and convoluted, and maybe $$$ answer. When I probe further, and try to find out what problem they are trying to solve, it often turns out the answer is very simple, and often at $0.

That is 'rude' and 'nasty', and worthy of 'old lady kicking' accusations? Not in my book.

-ERD50
Ok, then I will take my own advice to my children and assume the best of people.

My apologies
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Old 11-07-2015, 10:20 AM   #39
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Not sure this info is useful unless you are willing to move to my neighborhood.

Insurance, this depends on location, and even location within a state. Insurance for wind and water is different on the coast vs inland, and can very by over $1,000 a year.

HOA, in some HOA's there is little or no benefit, in ours it covers 24/7 ambulance, garbage disposal, 24/7 security, common area maintenance and other smaller benefits. A great deal for only $400 a year. As you may guess there is more to this also. (our HOA reserve account generates well over $300,000 a year in income)

Proprety Tax. Would appear to be straight forward, but here again not so. In Tx, there is not income tax. The difference is made up largely by property tax. Also many Texas subdivisions are developed using bonds. These are paid off through property tax. If the subdivision builds out, the tax is fairly low. If it does not, then the tax is higher. Again, the difference can be thousands of dollars in two neighborhoods that are side by side.

My point is there are far too many variables that make up the foundation of 'additional home expenses' to compare using anecdotal evidence.
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Old 11-07-2015, 10:21 AM   #40
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SF Bay Area home 2050 sq ft valued at $950K.

Prop Tax: 5,460/yr
Insurance: 1,020/yr
HOA: 575/yr
Maintenance Budget: 1,200/yr
CA Fire fee: 120/yr

Total: 8,375/yr
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