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Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: SaintM on January 19, 2015, 07:54:37 PM

Title: My brother-in-law vs me
Post by: SaintM on January 19, 2015, 07:54:37 PM
I visited my sister, brother-in-law, and niece for Christmas.  They just built a house in a guarded (not just gated) community near Tampa.  The house easily exceeds $1M.  The county assessor has not updated the property taxes on it yet, but their neighbors' houses run about $30k a year in property taxes.  I have no idea how much the HOA fee is, but they are paying for at least 3 guards.

My brother-in-law has a general contractor's license, and he did a lot of the work himself.  One would think this saved him a lot, but he put every conceivable upgrade into the house.  Every room has its own AC unit, and there is a climate-controlled attic room that protects the six routers that connect every light, outlet, faucet, appliance, grill, AC unit, exterior insect repellent system, pool, and more.

They make a lot, so they can afford the place if they continue to work for the rest of their lives.  But what really got me was my brother-in-law's statement, "This house is our retirement plan.  In ten years when [my niece] graduates high school, we will sell it and live off the proceeds.  There are always rookie professional ball players coming to town."

I about shit my pants.  Our families' philosophies could be no further apart.  I have two rental houses that generated $25k in tax-free profit last year.  Plus we have $75k in portfolio income.  We paid cash for our live-in home.  The combined expenses for all three of my houses is less than what I expect they will pay in property taxes.

I will take my retirement plan over their's.
Title: Re: My brother-in-law vs me
Post by: Fishingmn on January 19, 2015, 08:15:10 PM
How do you get $25k in tax free income from your rental property?
Title: Re: My brother-in-law vs me
Post by: SaintM on January 19, 2015, 08:35:45 PM
The $25k is the net cash in my pocket. The depreciation on the houses offsets the net cash.
Title: Re: My brother-in-law vs me
Post by: LiveLean on January 24, 2015, 12:35:02 PM
I live in the Tampa Bay area. We have a lot of clown houses like this, in part because we attract a disproportionate share of professional athletes. I've seen houses go on the market for $20 million and sell for $5 million, $10 million and sell for $2.5 million, etc. If you're really curious, google the real estate holdings of Matt Geiger, Hulk Hogan, or Vince Naimoli -- all of whom had massive castles that they ended up selling for 1/3 their asking price or less. All three, however, can absorb such losses. Not sure about your brother-in-law.