1. Big houses (or more to the point Big VALUE houses) frustrate the heck out of me due to tax bills, and other ancillary expenses that tend to track house value. The recurring costs are what can truly derail FIRE if one isn't careful.
2. Folks who bank on 'big gains' from their house appreciation also tend to get squeezed for equally BIG tax payments by the government year over year. We did a recent cost assessment of what our house has sucked up over the past 10 years. Ouch! I can tell you where ALL our 'appreciation' (and far more) actually went! At least we had an OK place to live, but our house is NOT making us rich. At best, we are ahead of renting...but not crazy ahead. That's actually good enough for me and about what I expect out of a personal residence.
3. Our property tax just went up 70% this year because our house is supposedly worth 70% more than last year. That sucks big time and its making us think about running for the hills.
4. Most would think they were richer because... 70% gain!!. That's great if we could list and sell this minute and find a sucker...err buyer.
5. Unfortunately, today our NW growth just tanked as now we have 70% extra in tax to pay per month for...absolutely nothing in return.
6. House VALUE can definitely be a FIRE killer.
7. Ours is 1600 s.f. We could have saved some decent taxes had we bought a 1200ish one.
1. Yes! Our fucking expensive clown house costs nearly 12k per year in property taxes.
2. I respectfully disagree. In the nearly four years we've owned it, our ten-year-old, custom built (not by us, we bought it on a short sale) 2600 sf palace has needed a major furnace repair, built-in microwave replacement ($1500 microwave? WTF? DH found one for "only" $600, argh!), extensive repairs to shithead 36" $5k stove's oven, plumbing work, landscaping, blah x 3. Fortunately, DH is a very smart and handy guy. None of this will break us, but it could get really spendy if we called someone for repairs every time something craps out. Shockingly, our Homeowner's Insurance has dropped like a rock since we've owned it, go figure. It now costs less than our car insurance and our cars are probably worth <5% of the cost of the house. Oh, and our utilities dropped by an order of magnitude once we registered DH's C-PAP.
2a. Our house may be expensive, but we can math. It's gained almost $100k in value for every year we've owned it, which is more than DH grosses, let alone brings home. That covers a lot of taxes and repairs. When our next door neighbor finishes replacing his old 850 sf dump with his DIY 3000 sf forever home, and they finish the 5 custom houses down the street, the new comps are going to give us at least another $100k boost. Sorry, this just wouldn't happen in a rental.
3. God, I love California and Prop. 13! This can't happen here. It's based on the purchase price, which is a completely different kind of pain, but you know what it will be (and stay) going in. The new comps mentioned above won't change our taxes at all, only our tax-sheltered resale value. It's a boon for us, to be sure, but you don't get that if you're renting the property, all you get is rent increases with nothing to show for it. We can change or replace anything we want. Plus, it can't be sold out from under us.
4. Do you want to sell yet? How you know you wouldn't get a buyer at that price?
5. Pfft, only on paper. If you don't believe the new tax assessment is correct, make your case and challenge it. You don't have to accept this without a fight. Make it a case study on the RE thread and you'll get plenty of guidance. Go for it!
6. Excellent reason not to include home equity in your NW calculations.
7. Sweet! That's about what we'll look for or build when DSS, MIL + her pal Al Z. Heimer, 2 rescue dogs and 1 rescue cat are no longer living under our roof. We're even going to downsize our bed. What mustachian needs to sleep in a damn king size bed?
