Here is the 20th conversation I had with money manager Andrew Horowitz…. new insights for anyone who invests in anything. What to do? This chat is presented as-is for anyone who wants to listen in. We discuss the market conditions with some unique insights.
More importantly we look at the current opportunities at the bottom. We also discuss our in-depth coverage of specific stocks with the new Drill Down series to be released shortly.
Right click here and select ‘Save Link As…’ to download the mp3 file.
Why Home Ownership over renting?==its a tax advantaged leveraged appreciating capital investment. Heh, heh, and consumer protection turns out that if we had any of it from our State and Federal Governments we ALL would have been protected.
If you have a job and are going to be in one place more than 5 years = buy.
About the 19.99 podcast — John, if you and Andrew are going to do these for pay, you MUST include recordings of what you are looking at as part of the show. It’s stupid to have a “radio” show on the internet where you are discussing so and so and oo look at this number here, but -I- can’t see it — your listeners will be pissed with you after a while.
If I were you, I’d record one or the other of you on the desktop, showing what you want to show, edit it and provide it as a secondary download for your podcast.
Or better yet, make it an actual hd show where you are both linked in to the recording desktop so that you can both collaborate better, with your camera pics on the corners of the display. Why the hell won’t people actually use the internet media to the max??? I swear.
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As for home ownership, the truth is that it’s largely better to rent unless you plan to stay in one place more than 5 or 7 years OR your property is partially rentable so you can recoup some of your investment.
However, without regular increases in equity owning tends to stay at a par with renting on tax benefits. Keep in mind that the “benefits” are largely going to your bank and tax authorities. You still have to pay $$$$ to get back $$$ at the end of the tax year.
So of COURSE the government wants you to own — they get much MORE tax revenue during the year if you own a house because you have to continue to pay your payroll taxes as is (unless you do estimated tax, of course.) Once you get locked into the XX exemptions, you give the government their free loan.
I just sold one of my houses last Friday. I took almost a 50% loss on the property according to the “basis value” of the house when I turned it into a rental. I also spent about %5k on it last year just to clean up part of it to even get any offers on it. My last renters painted and took down cabinets and stole things and in general hosed me. So I sold it.
By the time I get to show the loss next tax season I’m sure Obomba and Congress will find another way to screw me. The new owners get all kinds of breaks to buy and people like the 95-98% of people who made their mortgage payments don’t get shit.
For you idiots that think taxing the rich is a good thing just remember Capital Gains doesn’t apply to just “so called” rich people.
#3–Diesel==you sold a house for 50% of its (depreciated?) basis and still face a capitals gains tax issue?
Wow. You are right. Much better to be poor.
Thanks for the reminder.
#3, Diesel,
From your description, you either made a poor investment or can’t manage your investment.
Remember the *new* mantra of the right wing nuts, PERSONAL RESPONSIBILITY. Don’t be blaming others for what you screwed up.
Welcome back, Carter
http://videos.newsobserver.com/index.php?a=player&id=1950747
#5 and 6
No, I made the payments for 23 years. Rented it for 7 and made the basis 89k and it sold for 45k. It was due to the market downturn so that wasn’t due to my mismanagement.
As for losing money on it last year due to no renters that was by choice. I had people calling or writing letters wanting to rent it every month.
By not renting it I didn’t have to show any income and wrote everything off as a loss against my normal income. Even renting it I showed a loss every year which is the way I wanted it.
I’m just pissed because Porkulous puts in all those items to make it easier for first time buyers and help them in every way but the rest get screwed. We are going to end up with another real estate bubble by helping all the next generation of buyers get into houses they can’t afford (although it is getting a little tougher).
To top it all off people are lying on their taxes now saying that they bought a house to get the $8,000 credit and then using that money to go out and buy a house. Sweet deal for the low-lifes doing it. the same ones that helped get us into this crap in the first place.
New Rules:
If you work for any company involved in a bail out of any kind, immediately cancel all projects that can conceivably be associated with luxury, entitlement or perk.
Although Horowitz doesn’t understand Ownership, use this as an indicator of how dense he can be on various issues. Like all commentators, he is a balance of right and wrong information.
Save money. Don’t spend it unless you must.
Diesel,
I think the fumes might be affecting you.
In #3 you complained,
I took almost a 50% loss on the property …
After we accused you of bad management you wrote,
No, I made the payments for 23 years. Rented it for 7 and made the basis 89k and it sold for 45k. It was due to the market downturn so that wasn’t due to my mismanagement.
As for losing money on it last year due to no renters that was by choice. …
But then in #3 you had written
By the time I get to show the loss next tax season I’m sure Obomba and Congress will find another way to screw me.
So your own management provided no income and had you sell at a loss. By choice. You could afford NOT to rent it out and claim to gain financially by that. But you want to blame Obama for your problem?
Typical Liebertairan. No Personal Responsibility for your own actions and very quick to blame someone else, especially the Democrats.
I take responsibility for what I did or did not do. I did it this way to show a loss and not pay the pinheads in DC any taxes on a profit.
I blame Obomba for the current situation and not the 50% loss on the house. That was everyone who supported banks making bad loans.
Since Obomba is going to raise everyone’s taxes (don’t bother with the lame ass argument that he won’t) and really hammer “the rich” I take it to mean that he will go after capital gains and my “rich person” tax deductions.
So no, the blame will go squarely where it should be, the current administration and Congress since everything is happening on their watch. Just like it has always been.
Just so we are straight I said next tax season….
To stocks, I would still aim for services..
Kmart, Walmart, Winco, restaurant chains, …
And I still think that Poor people shouldnt be harmed for a rich persons gain/loss. Its incomprehensible the the GOV. hasnt gotten the point of protecting the Citizens of this nation. From INSIDE and outside.
And I agree that the corps are pulling strings, like a small child throwing a FIT, to get the toy he wants.
Ownership of property, is fine. AS long as you PAY for what its worth. and those PAYING MORE, are stupid.
“What kind of company needs that kind of moeny to stay afloat?” – a big time loser at the casino
I found it ironic that Andrew questioned home ownership, then in the next breath forecasted high inflation. Owning your home is a far better place to be in times of inflation. You are protected from inflation driven rent increases, and your asset should generally keep pace with inflation.
14,
except your taxes go up, accordingly, and NEVER GO DOWN..even when the value drops.
#15 ECA
Funny, we are fighting that exact problem on another rental. I wish I could just send my boss a letter telling him I am going to double my salary and you have to pay me until you can overturn it on appeal.
Real estate taxes more than doubled (almost tripled) in a down economy and market. We have to fight it and had to pay to get appraisals done. You know, real ones, not the drive by at 60Mph picture taking these county assholes did.
Mr. Diesel,
I would still take the profit and pay the tax. I think there was something in the bible about “cutting off your nose to spite your face”.
In the past couple of years our whole State has re-evaluated property taxes. Ours went down about 25% but others I know had theirs go up considerably. When they complain I explain my higher taxes were subsidizing theirs all these years.
I believe that PROPERTY tax should be on the LAND only, NOT the house on the lot.
It would solve Lots of problems, and Raise the housing market.
It would also decrease the value of these BUILD and SELL house projects..
#17 Mr Fusion
Yeah, the nose face thing…..
just listened to the show..
interesting podcast as always.
-however.. IMHO…you guys are still being “logical and legit” (?) about “the why” in owning a house being drummed into your head from birth.
whats that big percentage GDP buzz again…70% of it is “produced” (ha!) by consumerism??
they needed to get the credit bubble pumped up
to get that 70% GDP consumer buying power going.
only good reason they want you in a house is so
the government can help feed *its* credit and expansion habits by borrowing against your homeowner taxes. -and as a nice thank you to the banks, get you to turn that overvalued house into an uber credit card/credit line by refinancing it a few times.
they hit the trifecta: fuel a housing/tax bubble
a credit/tax bubble and fantasy income/tax bubble
a beautiful plan to destroy our wonderful country,
don’t ya think?
now, -just just figure out where we were when these bubbles were started -and you’ll know how low we have to go to reach the “true bottom” when these bubbles pop! (and how low the resultant “GDP Bubble” has to go as well, i guess)
(wow..a GDP bubble..i think that almost makes sense if you step back far enough and squint!)
i suck at figuring that part out, so i’ll leave up to you guys.
-s
Why no update for the podcast in iTunes?
Whatever happened to that ETF project that JCD and Andrew were working on?
Dude please try and remember to update the itunes feed