Quote:
Originally Posted by chassis
AlpineWhite_SJ What is the total return of your house in the example above (price appreciation less property taxes, maintenance expense, HOA fees and capital improvements inclusive of any tax benefits), compared with total return of the S&P including dividend reinvestment?
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Bought at 599k, sold at 1.15M. Put roughly 100k into it while owning it for capital improvements (roof, hvac and some foundation work). No tax benefits for the improvements, No HOA, and very little maintenance since I did a lot of it myself instead of hiring people, outside of big projects in the capital improvement area.
To clarify, my numbers were napkin math on the raw appreciation of the asset, since I think some think that the Bay Area real estate market is solid gold but fail to realize just how much a passive investment can appreciate. A more thoughtful analysis takes into account tax bracket, barrier to entry (ie 20% down), tax savings for deductions, tax outlay for property tax, how much you spend on maintenance, loan interest rate, insurance expense, and more. Also, our gain was under the taxable threshold so you’d also have to compare to long term gain on the index. All in, we made much more than the numbers I put up, so likely better than the same amount placed in an index. But it’s tough to communicate in simplistic terms to someone who doesn’t have the same variables.