Quote:
Originally Posted by MAXUM
Actually they are not. Most property owner end up on the loosing end, secondary properties are by far the worst.
Towns don't just take all the appreciation of a piece of property they actually take MORE than that. Example, my primary residence has a little more than doubled in value over the last 20 years. 100% increase in value means I'm a rich guy huh? Um NO! While my property value may have increased by 100% if I add up all the property taxes I have paid over the past 20 years I have forked out the equivalent of 137% meaning I am in the hole 37% JUST IN TAXES. Now if I were to sell I'd be out another about 9% off the top between RE transfer tax and real estate commission.
Secondary homes are far worse as using the same numbers... add in an additional 15% tax on cap gains. LOL yes the gains you have already paid the equivalent out to the town in the form of taxes.
Bottom line real-estate is a terrible investment to hold - in fact I wouldn't call it an investment at all - it's a way to park money that is relatively safe, and the town via property taxes gets all the interest earned and then some.
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I bought five years ago, I'm pretty sure that if I sold now I would come out ahead financially after 5 unbelievably great years of enjoyment.
But I pretty much agree on all of this. I would not describe a second home as a good investment or even an investment at all. I would describe it as a magnificent luxury that a few lucky and/or hardworking people are able to afford, and just maybe, due to appreciation, might not cost very much in the end or might even make some money.