Will i get a case of the regrets?

[Blonde Granny]

I can't help with much, but I do have one thought. You want a house with more space, better commutes, workshop space etc. How does a view increase your actual living space? Does the view give you a bigger kitchen or another bedroom? How many hours a day would you actually stand there and "view your view"?

Just me, I'd skip the view and go for the more of everything else you would get. That is what would enhance your daily life...the view? Not so much.

[Ava]

I say you go for it. It has very important features such as garage, good schools for the kids, good commute.
It would very difficult to nail everything in your list; it happens to all of us.
When I was shopping for a home I settled for this condo. It had some musts (garage because of the tough winters, and HOA that accepts cats, just look at my avatar). 
It was a long commute from work and didn't have hardwood floors.
Guess what; I transferred my job and now I have a five minute commute. 
I was going to put hardwood floors, until I realized carpets are so easy to clean and so comfortable because I like to be barefoot at home.
So, you give up some things. This particular house doesn't have a view, maybe another house will have a great view but a bad commute.
You have to decide what's more important for you and your family.

[Deleted]

You want a house with more space, better commutes, workshop space etc. How does a view increase your actual living space? Does the view give you a bigger kitchen or another bedroom? How many hours a day would you actually stand there and "view your view"?

[cronewitch]

Probably get it. If you spend a lot of time looking out the window a view would be good but otherwise maybe not as much.

I have a little over half an acre in Seattle area and my back yard has stuff to watch a little, birds, cats, plants, squirrels so pleasant but not special. A view like a mountian is nice but doesn't do anything, I would prefer a view of the sound with ships and boats or Lake Washington.

We have a river front property on the Cowlitz river and it is nice but we don't spend a lot of time watching water go by. Someone caught a fish in front of the house last week so that was nice.

[Deleted]

Just how important is a view to you? You listed it first. If it is truly at the top of your list, I would keep looking. It sounds like a great house, but a view is not something you can add later.

[Deleted]

If it's possible to have that great commute and perfect school district AND a great view, hold out. Seattle is like Vancouver, it's all about the view. Well I guess I should qualify my advice, if your house is just an investment go for it. If your home is your oasis, hold out.

[Deleted]

living space - would be much larger once renovated/expanded

btw, that isn't "nailing" it. You can renovate anywhere.

[Deleted]

I swore up and down that my next house would have central air. Well, this house doesn't...but it had so many other things that we wanted that not having a/c wasn't a dealbreaker for me.

If no view is a dealbreaker then pass. If you go through the house again and want it even without the view then take it. 

As for regrets? We usually have a week or two of unbearable humidity and I regret not having the air then. But I get to complain to DH that "I" wanted a house with a/c so it evens out, I guess.  

[Deleted]

Almost everything you want on 1/2 an acre, assumably that you can afford, in Seattle... Grab it up.

Make your back yard into an oasis. Go to all the great outdoor places in the area and you won't be limited to one view...

[Deleted]

My sis and BIL have a house in Seattle and a cabin in the mountains... It starts with an L... Anyway, if you really need both...

[yogiii]

Apr 8, 2014 12:36:13 GMT -5 alwaysbeoptimizing said:

For example, here is a house with a view, good commute, good schools, but it has no workshop, no privacy and is pretty pricey

If it was me, I'd want to minimize the stuff I'm not getting.  So if there is a house with no view but everything else vs a house with no workshop, no privacy, more $$ but everything else, I'd choose the first one.

[The Walk of the Penguin Mich]

Oh cool! That house has a washer and dryer in the bedroom! It took me a minute to figure that one out.

[Deleted]

It is possible to get it all, supposedly. It would have a little longer commute, less workshop space, and we'd probably not get our ideal architectural style, but could probably get everything else.

LOL you do understand the contradiction in that sentance right?

[sesfw]

I would go with the home without the view. How often will you stand and look at the view vs being in your man-cave?

A home with everything else except the view would be great. You can always look for a view in your 'home up north' (vacation home), or in your next home.

Make your back yard into an oasis

[HoneyBBQ]

PM me the house and I'll help you decide.

We basically gave up on the view space as it was such a limiting thing. I don't think you'll be able to find all your wants in one space. That said, it sounds like you have time to wait til the perfect one comes along if you want.

I seriously want to know where your houses are! I live in Green Lake, so you can imagine the competitiveness of the market in this area... sounds like you live on the hill or QA.

[HoneyBBQ]

Apr 8, 2014 12:36:13 GMT -5 alwaysbeoptimizing said:

Apr 8, 2014 11:37:12 GMT -5 laterbloomer said:

If it's possible to have that great commute and perfect school district AND a great view, hold out. Seattle is like Vancouver, it's all about the view. Well I guess I should qualify my advice, if your house is just an investment go for it. If your home is your oasis, hold out.

It is possible to get it all, supposedly. It would have a little longer commute, less workshop space, and we'd probably not get our ideal architectural style, but could probably get everything else.

For example, here is a house with a view, good commute, good schools, but it has no workshop, no privacy and is pretty pricey

www.redfin.com/WA/Bellevue/4638-133rd-Ave-SE-98006/home/235560

The house i'm looking at would be far more property, has workshop space, and would end up with the same $$invested (as the house i'm considering needs work/addition) and would be crazy close to downtown, but would have no view.

HOA dues are 5$ a month?? LOL.

[HoneyBBQ]

Apr 8, 2014 12:36:13 GMT -5 alwaysbeoptimizing said:

Apr 8, 2014 11:37:12 GMT -5 laterbloomer said:

If it's possible to have that great commute and perfect school district AND a great view, hold out. Seattle is like Vancouver, it's all about the view. Well I guess I should qualify my advice, if your house is just an investment go for it. If your home is your oasis, hold out.

It is possible to get it all, supposedly. It would have a little longer commute, less workshop space, and we'd probably not get our ideal architectural style, but could probably get everything else.

For example, here is a house with a view, good commute, good schools, but it has no workshop, no privacy and is pretty pricey

www.redfin.com/WA/Bellevue/4638-133rd-Ave-SE-98006/home/235560

The house i'm looking at would be far more property, has workshop space, and would end up with the same $$invested (as the house i'm considering needs work/addition) and would be crazy close to downtown, but would have no view.

Am I looking at this right or does that house have TWO laundry rooms??

[kittensaver]

Is Olympic Ridge available to you (financially)? Single family homes with yards, awesome views, great schools, "decent" commute to the eastside . . .

[kittensaver]

Apr 8, 2014 15:03:51 GMT -5 alwaysbeoptimizing said:

Apr 8, 2014 14:46:03 GMT -5 kittensaver said:

Is Olympic Ridge available to you (financially)? Single family homes with yards, awesome views, great schools, "decent" commute to the eastside . . .

Kitten, do you mean down in Newcastle (Renton)? I just want to be sure, as there are a lot of "Olympic..." neighborhoods up here.

The commute for DW would be so-so and we'd be in Renton schools, but there are some nice houses/views there for sure. I've been trying to stick to Bellevue School District as my southern border, but perhaps should look a bit further south.

I meant Olympic Ridge as in, the hilly neighborhood at the very north end of Ballard.

[HoneyBBQ]

Apr 8, 2014 15:11:11 GMT -5 alwaysbeoptimizing said:

Apr 8, 2014 14:17:10 GMT -5 HoneyBBQ said:

PM me the house and I'll help you decide.

We basically gave up on the view space as it was such a limiting thing. I don't think you'll be able to find all your wants in one space. That said, it sounds like you have time to wait til the perfect one comes along if you want.

I seriously want to know where your houses are! I live in Green Lake, so you can imagine the competitiveness of the market in this area... sounds like you live on the hill or QA.

Sent! please don't share, as I don't want to compete for it if we go for it.

We're in Laurelhurst now, so not far from you.

compete with whom? I'm never moving again lol.

[HoneyBBQ]

Apr 8, 2014 14:46:03 GMT -5 kittensaver said:

Is Olympic Ridge available to you (financially)? Single family homes with yards, awesome views, great schools, "decent" commute to the eastside . . .

I would think Olympic Ridge would be a huge PITA for a commute. I know I nixed it and I only commute to downtown. Beautiful views though.

[Deleted]

I think my sister is in Lakewood? Is that a thing? 

[Bonny]

alwaysbeoptimizing,

Think long and hard about turning your home into a rental. One thing you may not realize is that your cap gains status will change. Under the current rules since you and your wife are married you can exclude up to $500k in cap gains on the sale of your principle residence.

In 2009 the rules changed. Once you convert your home into a rental you now must bifurcate those gains. So let's say you put your home into rental service  for 3 years and have $100k gain.

Estimated cost basis $500k from 10 years ago. Land value $250k You're going to depreciate your $250k over 30 years or

$8333/yr

Sell now no cap gains tax $400k gross gain

Sell in 3 years gross gain $500k. Gain is bifurcated $500k x 70% $350k excluded $150k x .15 $22,500 taxes +

25% on the recaptured depreciation $8333/yr $25k = $6250

I don't think there are State income taxes in WA so your net gain in the above scenario is about $70k. You'll also have to deal with AMT and the new medical tax.

 But what will it take for you to get ready to sell now? I know that we will put in over $150k into this house by the time we're finished. We are spending more than originally planned due to tenant neglect.

I'd be thinking about whether it would be a lot easier to just harvest those gains now and keep them invested? What would the cash flow be?

Do work with your CPA so you get real numbers.

[bookkeeper]

How many hours per week are you and your wife home to appreciate your view? How many of those hours are dark?

I would jump at a private wooded lot for a backyard. I would appreciate the privacy of not having backyard neighbors or a street on the back of the house.

[Deleted]

hm... i think i'm wrong then. he works for the city and i'm pretty sure works downtown and bikes.... I don't know. I know how to get from the space needle to the market! ...

[Bonny]

Apr 8, 2014 16:57:50 GMT -5 alwaysbeoptimizing said:

Apr 8, 2014 15:43:11 GMT -5 Bonny said:

alwaysbeoptimizing,

Think long and hard about turning your home into a rental. One thing you may not realize is that your cap gains status will change. Under the current rules since you and your wife are married you can exclude up to $500k in cap gains on the sale of your principle residence.

In 2009 the rules changed. Once you convert your home into a rental you now must bifurcate those gains. So let's say you put your home into rental service  for 3 years and have $100k gain.

Estimated cost basis $500k from 10 years ago. Land value $250k You're going to depreciate your $250k over 30 years or

$8333/yr

Sell now no cap gains tax $400k gross gain

Sell in 3 years gross gain $500k. Gain is bifurcated $500k x 70% $350k excluded $150k x .15 $22,500 taxes +

25% on the recaptured depreciation $8333/yr $25k = $6250

I don't think there are State income taxes in WA so your net gain in the above scenario is about $70k. You'll also have to deal with AMT and the new medical tax.

 But what will it take for you to get ready to sell now? I know that we will put in over $150k into this house by the time we're finished. We are spending more than originally planned due to tenant neglect.

I'd be thinking about whether it would be a lot easier to just harvest those gains now and keep them invested? What would the cash flow be?

Do work with your CPA so you get real numbers.

HI Bonny, I know this isn't a tax thread, but can you help explain?

Assume we bought for 800 in 2007, and could sell today for 900.  Obviously, that 100k gain would be totally tax free.

OR, we can keep it three more years, while renting it, and sell it for 1.1M.  Would we pay taxes on the 200K, the 300K or some combination of them?

You have to pro-rate it over the ownership. So if you bought in 2007 for 800k put into service 2014 and sold in 2017 for $1.1M  the ratio would be 70% (7 of the 10 years) of the $300k gain would be excluded or $210k(assuming of course the 3 out 5 year rule) and 30%  or $90k would be taxed.

You must also pay a 25% recapture on your depreciation while it was in service as a rental.

This a really, really over simplified example whereby we're not including sales costs or capital improvements. Do talk to a CPA so you know what you're getting into.

 

[cronewitch]

Lakewood is a town south of Tacoma and a neighborhood in Seattle.

[Bonny]

I thought about your situation some more alwaysbeoptimizing and here are some other thoughts;

How confident are you about a price increase of $200k in 3 years? I ask because what we think here in the SF Bay Area is that things are going to keep increasing but at a much, much lower rate. Perhaps as low as 3%or 4%. The reason is that most of the areas here hit their peak in 2007. Those folks who didn't bail when values plunged in 2009 & 2010 have been patiently waiting for values to recover and will be putting a lot of inventory on the market over the next couple of years.

I don't know your market but how would the decision look if you only saw 3% increases over that 3 year period of time?

I'll ask again about your projected cash-flow; will the rent cover PITI, a gardener or other special service you require? What about repairs?

Have you talked with some lenders about how they will qualify you? It's been a year since I've refied so I don't know if things have changed but a year ago no FNMA underwriter would count rent on a rental until you could provide two years of tax returns documenting that rent. They also average those numbers on the schedule E and only take 75%. So in other words the underwriter may qualify as if you are making payments on both of those houses.

I don't want to discourage you. If you think this is a good rental house by all means put it into service. Just go in with both eyes open.

[milee]

I'm not familiar with that area's real estate at all, so these could be totally off base points, but...

Using that view house you linked as an example, what type of guarantees do you have that the views will stay that way? Are there height restrictions on the buildings immediately downhill? (I ask because those homes are OK but hardly architectural gems, so it's not unreasonable to think at some point people will scrape them and build something taller to maximize views.) Also, given that the HOA fees were listed at some nominal amount - $5? - does that mean there's no HOA or that the HOA is from the '50s and may not have all the provisions and protections of a modern one? For example - does the HOA prevent the neighbors downhill from growing trees or hedges that block your views?

Just asking because around here, water views are prime but in older neighborhoods there aren't always good protections to keep the views. So you can buy a house with a view but discover a few years later that you lost it because someone built or grew something in the way. With a fairly shallow slope on the hill, that might be a risk with some of the view homes you're looking at.

[tallguy]

I don't know.  I have a Sound and mountain view.  There are days that you absolutely can't beat it.  Other days you don't notice.  Most days you take a look now and then.  But pretty much every single day, you're glad to know it's there.  Up to you.