Only the profit from selling would get taxed as a capital gain. I'm not sure about the exact time frame.
When my parents bought their first home in 1976, they got a 14% interest rate and were THRILLED. I guess that was a couple percent below average at the time. Of course, this was on a $10,000 house. There's a hell of a lot of people out there with a bigger balance on their credit cards with a higher interest rate than that nowadays. On the flip side, it evened out somewhat because you could put your money in the bank and collect like 7 or 8% interest as well. Whenever home loan interest rates are high as hell, you can generally get great returns on safe/simple investments too. It's all relative. Beats the hell out of the .1% interest that my bank gives me on a savings account. I'd honestly rather get no interest and not have to worry about the income come tax time, it's completely negligible in the grand scheme of things, but I'm always paranoid about getting audited if I just flat-out don't record it.
Yeah no shit. My boss's house in Oak Park, IL she bought for $26,000 in 1979 with a 19.5% interest rate. . It's worth like 750,000 today. I'd glady take that interest rate at that price too.
Yea thats an insane amount of housing appreciation, even adjusting for inflation. Don't think you're going to see that type of appreciation for a while, a lot of the massive inflation in "desirable" suburbs has been driven by white flight.
Thats an interesting suburb, although the median incomes don't seem particularly high. The property values aren't crazily high for a major metro area like that either. The average listing price in Oak Park IL is $243k. I was thinking something more along the lines of Wilmette with an average listing price of 579k or Highland Park with an average listing price of $700k...
If the home turns into a rental it makes things more complicated, since you'll have to recapture any depreciation you take. Unless you plan to keep it a rental property long term, you're getting insane rent, or you think the market will skyrocket and sitting on it a little longer will result in a much better sales tag, short term renting doesn't make much sense to me - too much pain, not enough (if any) gain.
Oak Park is really split into two very different areas. The Southern and Eastern Parts of Oak Park are much poorer than the Northern Parts and around the Frank Llyod Wright houses. That's where you get the lower average property value.
Even the lowest average rate was 2.56% on a 15 year the week of 5/3. Those rates are the ideal rates though. That's a $200k+ loan with 20% down and top credit. Most people don't qualify for the best rate. The rates have jumped quite a bit in the last few weeks though. Almost all the way up to 3.5% on a 15 year.
Ive got relatives in Oak Park and think you cant take that suburb as an example to any other in the US when it comes to real estate prices.
Seriously mortgage insurance at this point, to me, is bullshit. Banks should not over lend or offer more than a person can afford (they still do it). The amount of principal paid or amount down to forgo PMI should be reduced, as it is becoming more unfeasible for families to actually put that amount down. Shit is an outright scam at this point it seems like.
