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rwsinmissionhills
Posts:356

07/15/2008 8:56 PM	Alert
Happy Owner: Do you have a house in Chicago or a condo? What's the sales tax in Chicago? Our sales tax in San Diego is 7.75 % Just for the record for anyone else trying to make use of this info, 75 is probably the forecast at Limbergh field--pretty much on the coast. Inland, the temperatures are more extreme and therefore the need for climate control is greater. I would expect a condo to need less climate control on average than a house, since it might have less exposure to the climate.

Happy Owner
Posts:39

07/15/2008 9:07 PM	Alert
RWS: I have a house in the suburbs and work in downtown Chicago. I spend an average of two and a half to three hours day on my round trip commute. Sales tax rate in Chicago is 10.25%. My condo is on the coast (92106 zip code). The temperate climate was the big draw and major selling point for me.

lonnyzone
Posts:57

07/15/2008 9:44 PM	Alert
I feel sort if afraid to post here...My first one stirred up too much dust at least one too many Marie Antoinette references. To those who tried to clarify what I meant to say, thank you. You articulated positions better than I could have. But, lets see if I can dig myself out of this hole a little more. Real Estate is a weird asset/investment combination. It goes up and down like stocks or bonds. Unlike stocks, bonds, cash or metals, you can also enjoy it. The enjoyment you derive from real estate is almost completely reliant on its location. San Diego has more going for it than almost any other city. The climate is better than Maui, and you don't have to sit on a plane for 5 hours. The city is clean, safe and offers world class food and things to do. And right now, San Diego is having a 30% off sale, compared to a couple of years ago. Will it be another 10%, 20% off in a couple of years??? Maybe. But I could be dead in a couple of years, so why wait? For all the intolerant types who think I am deriding those who can't afford a 2nd home, I am not....up until recently, combined with this 30% off sale, I couldn't afford one either. This downturn, however far through it we are, has brought the prices within reach for me. San Diego has been and will continue to be a great 2nd home destination because of all it has to offer.

wilson
Posts:680

07/15/2008 10:20 PM	Alert
Happy Owner, Chicago real estate has done very well over the years. A college buddy of mine has a home in Arlington Heights that he's had for many years and the equity he has is pretty amazing. A good example of buying and letting time work for you. Nice to have numerous points of view. There are buyers/sellers out there, each with their own story & motivation. Not all buyers are knife-catchers and not all sellers are real estate speculators gone bust. Reminds me of a school friend who once said: "You guys are all the same. Don't you know it's unfair to generalize!"

MJ
Posts:9

07/15/2008 10:25 PM	Alert
Posted By lonnyzone on 07/15/2008 9:44 PM I feel sort if afraid to post here...My first one stirred up too much dust at least one too many Marie Antoinette references. To those who tried to clarify what I meant to say, thank you. You articulated positions better than I could have. But, lets see if I can dig myself out of this hole a little more. Real Estate is a weird asset/investment combination. It goes up and down like stocks or bonds. Unlike stocks, bonds, cash or metals, you can also enjoy it. The enjoyment you derive from real estate is almost completely reliant on its location. San Diego has more going for it than almost any other city. The climate is better than Maui, and you don't have to sit on a plane for 5 hours. The city is clean, safe and offers world class food and things to do. And right now, San Diego is having a 30% off sale, compared to a couple of years ago. Will it be another 10%, 20% off in a couple of years??? Maybe. But I could be dead in a couple of years, so why wait? For all the intolerant types who think I am deriding those who can't afford a 2nd home, I am not....up until recently, combined with this 30% off sale, I couldn't afford one either. This downturn, however far through it we are, has brought the prices within reach for me. San Diego has been and will continue to be a great 2nd home destination because of all it has to offer. Well put!

613867
Posts:62

07/15/2008 10:26 PM	Alert
As an ex-Chicagoan (came to SD in 1989) I think the only thing that is really high in San Diego is the housing price and gasoline. Cars last longer because no salt corrosion due to winter snows. Everything else is cheaper because of the weather. Gave away all of my pinstripe suits and wingtip shoes long ago and now wear grunge like 90% of everyone else. No winter coats or garb. Heat and ac costs are less than Chicago because of the moderate weather. Prop 13 makes real estate taxes about equal with Chicago (1.25% vs 2%) for the first year because of higher real estate prices but become stunningly cheap the longer you own your house. Thus the crappy educational system. Work ethic here compared to chi is lousy. Lots and lots of whining to put up with. But the ocean, weather and scenery is great.

Brian
Posts:2667

07/16/2008 1:43 AM	Alert
Posted By lonnyzone on 07/15/2008 9:44 PM But I could be dead in a couple of years, so why wait? San Diego has been and will continue to be a great 2nd home destination because of all it has to offer. I agree that San Diego is a good destination. BUT, you get a lot more for your money when you buy a leasehold estate as opposed to a freehold estate in San Diego. If, as you say, one should enjoy the present to the fullest, then buying a leasehold makes even more sense since that would leave you with more free cash to pursue other endeavors before you pass away. It would certainly be stupid to buy if you expected to be dead in two years. Whatever happened to building equity for the long term (like years down the road)? Isn't that what amortizing a mortgage is all about? There are different ways to purchase the use and enjoyment of real estate. Buying a leasehold estate is a great way to do that, at this time. By definition, buying a freehold estate (especially on credit) is planning for the future, not enjoying the present to the max.

dchestney
Posts:300

07/16/2008 8:25 AM	Alert
My wife and I had/have a situation very close to that stated by Happy Owner. We are not wealthy or business owners. I worked for the same employer for 34 years and retired 1-2 years before I had planned because of an early retirement incentive, and my wife did the same 8 months later. We were savers more than spenders (a situation which has surprisingly continued in retirement, although with a reduced margin), never considered leasing our SD second home during the time before we retired and moved here, and carefully selected the neighborhood and building we bought in even though the cost, even in 2002, exceeded what we had been expecting to pay. I could not be happier (we had considered Pacific Beach, Ventura, and Oxnard) and read/post messages here for detached amusement and another slant on what is happening around me.

dchestney
Posts:300

07/16/2008 8:56 AM	Alert
Oops!! FWIW, the reference to "Pacific Beach" in my previous message should have been "Pacific Grove" near Monterey.

613867
Posts:62

07/16/2008 9:02 AM	Alert
Brian-you do get a lot more for your money when you buy a leasehold estate. Just ask your tenants. I am sure they can't believe their good luck at how they have exploited the equity buildup of the fee owner.

Brian
Posts:2667

07/16/2008 9:38 AM	Alert
Posted By 613867 on 07/16/2008 9:02 AM Brian-you do get a lot more for your money when you buy a leasehold estate. Just ask your tenants. I am sure they can't believe their good luck at how they have exploited the equity buildup of the fee owner. 63867, you are very correct, at this time, in this current market, you do get a lot more housing when you buy a leasehold estate. For the same monthly payments, my tenants could not buy the same quality house in the same quality neighborhood. They are enjoying a nice house while they save liquid cash. That's why they are buying their leasehold from me. :) If only one has only a couple of years to live, one certainly wouldn't want to take on all the non-recurring costs and transaction costs of buying a fee estate since one wouldn't have the time to recoup them, in enjoyment or otherwise.

dchestney
Posts:300

07/17/2008 3:10 PM	Alert
Why does Brian (allegedly very comfortable with renting) need to "upgrade" the idea of renting into "buying a leasehold estate." Isn't that just a 20-dollar phrase for "renting/leasing"? What, exactly, is he"buying"?

Andrew Jensen
Posts:70

07/17/2008 3:57 PM	Alert
I've rented in the US and rented outside the US in a few other countires. In the US, you can't ever totally relax because of some idiot landlord. Also leases are short here compared to other countires. In other places there are institutional owners who don't have issues. My point is that renting here is diiferent from renting elsewhere. I'd rent forever in europe or s america, but here? No. Maybe it's a control issue and if I got some more tats I'd feel a lot better about renting.

Brian
Posts:2667

07/17/2008 4:02 PM	Alert
Posted By dchestney on 07/17/2008 3:10 PM Why does Brian (allegedly very comfortable with renting) need to "upgrade" the idea of renting into "buying a leasehold estate." Isn't that just a 20-dollar phrase for "renting/leasing"? What, exactly, is he"buying"? For the benefit of others who maybe reading this. It's about about how you look at it. Simply put, a leasehold is purchasing real estate for a defined period of time. A fee estate is purchasing real estate for an indefinite period. So, by definition, a fee estate is paying now, for all the future benefits of that real estate. The problems is that you're making assumptions, now, about what the future benefits will be. If you're wrong with your assumptions then you stand to lose a lot of money. If you only need to use the real estate for the near future, then you're better off buying a leasehold (rent) to minimize risk and mazimize cash flow.

Brian
Posts:2667

07/17/2008 4:15 PM	Alert
Andrew J, I agree about renting in other countries. 1) It could also be that when we, Americans, live in other countries, we never think that we'll stay there forever. So we don't mind renting. 2) Since rent generally provides more immediate housing benefits, we get to enjoy the serviced apartments for a very small percentage of the purchase price. When we live in other countries, we generally want to be in the in the center of the business or tourist districts. It's much less expensive to rent because of location. 3) Good point about the more stable institutional owners in other countries. Institutions don't have raving emotional issues.

rwsinmissionhills
Posts:356

07/17/2008 5:07 PM	Alert
The tax systems in foreign countries can be very different from what we are used to and many of these systems do not abet ownership. Philosophically, ownership of any kind is not a big thing. For instance, in some european countries the tax man (at least used to ) tax anything you own that was in sight. If you notice a lot of places in foreign countries more or less conceal the interiors or are kind of fortress-like, that is one reason (Many foreigners are different from Americans. For a variety of reasons, I suppose. But not long ago, a basic philosophy in countries I have lived in and visited has been "Our standard of living is none of anyone's business, THANK YOU VERY MUCH!!! OFF you go.) Also, there are considerable variations in tax policy regarding transfers of property, inheritance, etc, etc, etc. There have been traditionally very big differences in what you get when you rent (or buy, too). In some countries, rentals do not come with cabinets, appliances, or anything else. Also, at least in European countries with generous social welfare, no one needed to worry about using a residence as a nest egg. Housing and health care were are all provided for and you really don't need a nest egg to the extent we need it or it is desired here. In many countries, the house is a place to live and be with your family and friends. That is it's primary function. It is not an investment, tax write-off, showcase, or place to express your good taste to the world. I see a lot of this changing. Europe, in particular is becoming much more similar to the US in all many ways including business and policy and ideas relative to homes and real estate. At least they can sort of hold off for a while and see which of our policies tends to work and where there are disasters waiting to happen! My big question is: Who traditionally have been the people who own everything that gets rented out and what is THEIR story!!!

dchestney
Posts:300

07/18/2008 8:34 AM	Alert
Brian, you missed my point. You wrote, "If you only need to use the real estate for the near future, then you're better off buying a leasehold (rent)." I just wonder why you refer to "renting" as "buying" something. It is a legal term that is very misleading to the typical person--even those knowledgeable enouigh to monitor this site--who understands "buying" and "renting/leasing" as totally dissimilar processes. Oh well, I'll go to the video store and "buy a few leasehold estate" DVDs to view over the weekend. Right?

wilson
Posts:680

07/18/2008 9:09 AM	Alert
dchestney, You missed the point. Using legal terms that are not in the vernacular makes someone look smarter, eh? Or does it?

Caligirl43
Posts:148

07/18/2008 9:29 AM	Alert
Since I don't know how to start my own topic I hope all of you very smart people won't mind if I ask this question here - Does anyone know of a trustworthy and knowledgeable real estate agent in the Inland Empire?

dchestney
Posts:300

07/18/2008 9:50 AM	Alert
Hello Wilson-- Not our beloved Brian!! How could you??

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