$2M home w/ $160k HHI?
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Anonymous
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I made $2.2M on the stock market. We have a HHI of $160k. Would it be insane to pay all cash for a $2M home? Yes, I realize there are taxes, insurance, closing costs etc. Can you still own a home with that price tag with a $160k HHI? Would taxes, insurance, etc. be untenable while essentially having no mortgage?
I don't really care about wiping out my brokerage account to $100-200k. Plenty saved in IRAs and 401ks. What else should I use the money for at this point? No other debts. Still lots more time to rebuild my brokerage account, and I actually do want to remove a lot my wealth from equities into real estate just to diversify. |
Anonymous
| Absolutely you can. Just keep making 2 mil every year. |
Anonymous
| What are the taxes on the home? At that price, they may Be like an income appropriate mortgage that will never end. So at local rates around here that’s $20k per year on taxes alone. Plus upkeep, dues, etc. Why be permanently house poor? Buy a million dollar house and keep some money in the bank. |
Anonymous
| WHo knows? This is so specific to where you buy (property taxes and insurance premiums aren't the same in every city and state) none of us can do the math for you. |
Anonymous
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Run the numbers. Talk to an accountant if you need to. Taxes in a place like NY would probably kill you. Maybe manageable here? There’s a rule of thumb regarding annual maintenance as a % of property value, but I forget what it is.
I personally think that’s too close to the edge, but you might not agree. |
Anonymous
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https://www.redfin.com/MD/Rockville/10107-Gary-Rd-20854/home/10888099
Something like this in Potomac yes. I picked this one as was all redone only 16k taxes and solid home |
Anonymous
| Yes, I would. |
Anonymous
| We have a $300k home on a $160k hhi. |
Anonymous
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I have a large expensive house in a lower income I bought in 2017. I had the money for a very large downpayment. Around 60 percent down. But carrying costs was concern.
I focused on houses with gas heat, public water no HOA and avoided new builds which can lead to “surprise” property taxes after purchase. I also avoid houses big retaining walls or huge garage lots that have issues. Avoided big older inground pools with upcoming maint. From there house had to be in really good shape. I ended up buying a house on a flat 1/2 acre. It is 4,000 sf finished upstairs with 2,000 sf basement so I have 6,000 sf. No pool, no sprinklers, all four sided brick colonial. It need a few new windows and repainting some rooms and minor things. No HOA. All the bathrooms and kitchen were new. It does not cost much to maintain. My taxes are 12k a year. I saw some houses electric heat, well water, high HOA fees or high property tax. It the thing my wife hates two acres with most it it hilly it woods yet higher property tax. 1/2 my block is retired but I think due to fact no HOA and reasonable taxes and well built houses folks stay. It is those two acre houses with pools and tennis courts, HOA fees and high taxes that look like a movie star house that are hard to maintain if a lower income so you leave I also lo |
Anonymous
| 8k sf? Can you afford to furnish it after that? |
Anonymous
| I think you probably can. Taxes will be around $20k a year here. Is the $2.2 m in stick market gains after you’ve isis taxes? If it’s short term, you will owe about $1m. |
Anonymous
| Can you tell us more about that stock? |
Anonymous
Sorry, I should have been more clear. Can you tell us more about how you made that kind of money in the stock market? I have about $135k coming in from real estate investments and I would like to put some in the market. Are you doing options trading, or anything complicated? I’m assuming that you didn’t make that kind of money in mutual funds. |
Anonymous
Once you've figured out how much you can afford to pay per month in taxes and insurance, I'd think carefully about maintenance. In a neighborhood of $2,000,000 homes people are going to pay more for landscaping, cleaning, etc. The bigger the house, the more expensive to paint, replace the roof, AC, furnace, hot water heater, etc. Overestimate how much you'll need to spend. I'd also go ahead and factor in furniture, window treatments when you're thinking about purchase price. We've lived in our house for 20 years, and are starting to need to do major renovations like bathrooms and kitchen. I'm glad we didn't overbuy for our income, it is expensive. |
Anonymous
Nothing crazy....the first $100k is the hardest. Bought Home Depot, Costco, Tesla, Match, Amazon, etc. etc. a little bit at a time all during 2010-2019. Kept putting what I could into my accounts. Was eventually able to get my account up to about $430K. I am an avid reader of Barron's, and I read the issue in the earlier part of this year where they had a special issue on sports gambling. I was entirely convinced of the outlook for that industry and bought warrants for DEAC back in Jan./Feb. I kept buying during March when the market tanked, and had about $60K in warrants (I forget the exact number I had), with an average of about $1.91. DEAC eventually reversed merged into DraftKings, and the warrants skyrocketed to about $35 when I sold. That play netted me almost 18x (about $1M). There were a lot of other picks too.....if you haven't been paying attention, it has been an absolute bonanza with SPACs and SPAC warrants. I also had $30K in SHLL warrants, and another $40k in VTIQ warrants (which turned into NKLA), and $40K in TRNE warrants. Those ended up turning into about another $2.5M....especially when NKLA went up to $80+. Sure, NKLA is garbage now, but I got out before the hype train burst. Basically, buying a lot of stocks earlier in the decade, then flipping the gains into SPAC warrants. |