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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (61292)	3/24/2005 8:30:21 PM
From: No Mo Mo	Read Replies (4) of 74559

"short an amount equal to the perceived value of my California property" Hi Jay, I have been struggling with a similar "hedging" quandary. I am currently short a number of mortgage lenders and insurers for just this reason. The below is a question I posted earlier today on another thread. Would you have any insight to share? Any input from others is appreciated as well. Thanks in advance. In September, I am leaving to travel/live in Asia for at least two years. I have owned a house here in San Francisco for 7 years. The question is whether to hold onto the house and rent it or sell it now. The particulars: Mortgage = $174,000 Most recent assessed value = ~$600,000 (possibly as much as 15% higher) Taxes = $2766/yr Insurance = $743/yr (no earthquake ins.) RENT what-if's: Rental income = ~$2100/mo (+/-) Storage of personal property = ~$325/mo Property management fees = ~$200/mo Tax on rental income = $??? Additional Insurance = $??? SELL what-if's: Capital Gains tax = ~$??? Replacement cost = ~$??? Income from invested capital gain = ~ $400,000 x 4% = ~$16,000/yr Tax on interest income = ~$??? What other financial factors do I need to consider? The biggest hitch, here, is emotional. I love this house. Selling it is going to break my heart. I have put a LOT of work into it. This was my first purchase and, until about two years ago, I never thought I would sell. It is a work of unique craft in many respects and holds a value that I would be hard put to replace elsewhere. That said, I come from a working class background and I think I have a very acute appreciation for my financial good fortune of buying where and when I did. I understand the downside for holding could be very painful. Any suggestions would be very much appreciated. Thank you.

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