Real estate - Buy high, sell low

[Stagleton]

Recently I sold my apartment in Stavanger, Norway. http://www.finn.no/finn/realestate/homes/object?finnkode=58123199 <-listing

I bought it when oil was booming and there were only 350 properties for sale on Norwegian Craigslist and sold when there is an overwhelming 1100 properties for sale. I would have held onto it and waited to sell but I got offered my dream job (ironically thanks to Oil tanking) and so now I can move to Oslo near my girlfriend. I would like to buy some property in Oslo and keeping track of renters in a town that requires a 1 hour plane trip is a pain in the ass. So I sold.

The real estate market in Stavanger is really cold. I had only 2 people interested in my apartment at first and only one willing to put in a lowball offer about 60k$ under the asking price. I could have put in a counter offer but I felt like "f this guy" Im not going to bother. A day later a woman came for a private showing and was interested. She put in an offer for like 20k$ under my asking price and then they battled their way to 15k$ under and so I made her an offer for 10k$ under the asking price and about 17k$ under what I paid.

I don't know if all that made sense. Anyway, I had been renting out the apartment and it has a separate rent out unit that I have earned pretty well on and the place takes nothing in maintenance. Also there are basically 0% realestate tax in Norway and the document fees don't exist for this kind of apartment. So, I feel I have done a pretty decent job and end up in plus. I have been paying down my mortgage like a mad man, but my money would have been better off in Index funds.

Well, I hope to one day buy real estate in the US; either Boston/NYC/SF/San Diego. I imagine you are all scoffing at this, but whatever. The current market in the US reminds me of when I bought my property in Stavanger. Everyone needs to buy now and you hear stories of people earning massive amounts of money. "You never lose money in Stavanger", was the general market sentiment. I was not desperate to sell my apartment since I was only paying about 400$/month in interest to own it and living at my girlfriend's place for free, but I know there are lots of people in a bad position and if you have some capital, you can get a really good deals in Stavanger.

If you had a bunch of USD lying around, I would buy something in Stavanger now and sell it in 1 to 2 years. The current exchange rate is shit for NOKs and properties in that town are cheap. Not to mention some big fields are starting production in 2019 and a lot of work will be created as a result.

So, I am interested in building a position so that I can make a good move in the worst of times when some good opportunities present themselves in the US in the next 5 years. Still investing heavily in index funds in various markets and planning to buy a place in Oslo. Hopefully with a separate rent out unit so I can earn tax free money every month or an extra bedroom that I could rent out on AirBnB.

Does anyone else have any interesting real estate stories? Happy/Unhappy with purchases you have made?

[Scandium]

The NOK>USD exchange rate is pretty fantastic at the moment (for us with USD income at least). So it's an interesting thought. It's complicated, but I will get some "early inheritance" payment in norway this year so I was thinking of ways to invest there. But in the end I think I'll take the exchange hit and transfer it to the US and my vanguard account. Just too much of a PIA otherwise, the 27% capital gains tax sucks too. And imagine managing a rental unit that's 12 hr+ away!

Also, I owned and sold my mutual funds in Norway last year, and some other dividend payments, and just turned in a 40+ page tax return that took me several hours in the evenings over several weeks. (ended up owing over $9k. You're welcome obama!). I shudder to think of the tax complications of rental unit in Norway, which would be taxes to both countries.

[Stagleton]

The NOK>USD exchange rate is pretty fantastic at the moment (for us with USD income at least). So it's an interesting thought. It's complicated, but I will get some "early inheritance" payment in norway this year so I was thinking of ways to invest there. But in the end I think I'll take the exchange hit and transfer it to the US and my vanguard account. Just too much of a PIA otherwise, the 27% capital gains tax sucks too. And imagine managing a rental unit that's 12 hr+ away!

Also, I owned and sold my mutual funds in Norway last year, and some other dividend payments, and just turned in a 40+ page tax return that took me several hours in the evenings over several weeks. (ended up owing over $9k. You're welcome obama!). I shudder to think of the tax complications of rental unit in Norway, which would be taxes to both countries.

Hmm, sounds like you are the opposite of me, Scandi working in the US? I know for me I don't get taxed twice when I earn money in Norway from the US so it might be the same for you? It sucks getting that 27% tax on money you have earned, but since I lost some money on the sale price and I rented it out for more than 12 months in the last 2 years, I get the 27% of my loss back. Capital gains tax sucks but nice that it works both ways.

Definitely a pain managing a rental unit even 1 hr away!

I was thinking about opening up a Forex account or something and buying a bunch of nokies in USD. The account stays in the US; but oh man would have been sweet to do that when the exchange rate was at 8.4 NOK/USD!

Youre not planning on closing all your accounts in Norway, right? I like having accounts in both countries and just use Skandiabanken to buy funds that are basically Vanguard mutual funds with an operating cost of ~.3%. Seems like a good way to diversify. I used to feel like a rich man in the US, but now I feel like a rich man here :P

[Scandium]

Correct, I grew up in norway and moved to the US. More or less permanently. At least have no plans to move back anytime soon. I have some bank accounts there for very rare use, but got rid of my mutual funds. Just much easier to manager here, and the taxes are a pain. Could add some diversification, but I could also just buy a Nordic ETF here..

The US taxes residents on wordwide income, so anything earned in norway is first taxed there, then the US want it's tax share, with some crock of foreign tax credit which barely covered 1/3 of what I paid ("hey we'll count your foreign income 100%, but taxes are only counted 30%, because FU"). Results is more taxes owed. Not worth it.

I'm not very comfortable trying to take advantage of the current exchange rate in a way that rely on it going back to where it was. That could be years, or more. Or could change tomorrow. I'll just earn my salary in the US and feel richer when I visit family :) "This kr. 100 beer is now effectively only kr. 70! Hurray!" lol

[CopperTex]

Another Norskie here! I was born in Stavanger and grew up in nearby Tananger. My dad worked on the oil rigs so spent the second half of my childhood up until now in Louisiana - another big oil and gas place. You guys must be in oil and gas.