I'm sorry but I would have to disagree. You did reduce your overall tax bill by deducting your property taxes.
In my 50 years of property ownership and investment I have only lost money on 2 pieces of property and I'm still collecting money in retirement. Of course a lot depends on when you buy and when you sell. Just like any investment, buy low and sell high.
There is a difference in mindset between a real estate investor and just a home owner. Most home owners spend way more on a property than it will ever be worth. Investors will only spend up to the value of the neighborhood.
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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