Since there is soooo much real estate discussion in here.....

[cnj]

How 'bout this situation.......The wife and I have an exit (from CA) strategy when I retire in 3.5 years (when I turn 55). We'll move to our home in AZ, which we own outright. Our house in Corona just appraised for $568K, and we owe ~$348K. My better half turns 55 in December this year. My thought is to sell our primary home after she turns 55 in order to avoid capital gains taxes, and rent until we are out of here. I don't think I want to retain the Corona house as a rental.....way too much hassle, and I just want to cut all ties with CA.

Any good strategies or advice from the experts here????

 

[HOOTER SLED-]

Why not hang on to the house and hassle with the rental to see if it peaks a lil more? 100k should be worth a short hassle for an even better nest egg since you are retiring at 55.

 

[shintoooo]

You can sell today and not pay any taxes up to the first $500K of capital gains if you've lived in your house for the past two years.

Age doesn't have anything to do with capital gains taxes.

 

[HOOTER SLED-]

It's age that can help with keep the lower taxes on a other house right?

 

[shintoooo]

It's age that can help with keep the lower taxes on a other house right?

Not if they're moving to AZ

 

[rmarion]

subscribed:thumbsup

 

[37 boat]

How 'bout this situation.......The wife and I have an exit (from CA) strategy when I retire in 3.5 years (when I turn 55). We'll move to our home in AZ, which we own outright. Our house in Corona just appraised for $568K, and we owe ~$348K. My better half turns 55 in December this year. My thought is to sell our primary home after she turns 55 in order to avoid capital gains taxes, and rent until we are out of here. I don't think I want to retain the Corona house as a rental.....way too much hassle, and I just want to cut all ties with CA.

Any good strategies or advice from the experts here????

That has been our plan for the last 30 years, I retired 2 years ago and turned 55 a couple months ago. We built our house in Havasu 13 years ago and planned on retiring there but for some reason we can't seem to pull the trigger and leave Mission Viejo. We have been spending one week a month in Havasu for the last 2 years and I'm sure we are gonna go full time eventually. I'm also considering hanging on to my O.C. house as a rental but with the capital gains exemption it would have to increase $150,000.00 just to break even with what we would walk away with tax free. Needless to say its tempting to just take the money and run.

 

[brgrcru]

If you can rent the Corona house out for a positive cash flow, after taxes and any other bills, that Go along with being a landlord , I would keep it.
Get a property management outfit to deal with it.
Eventually it will be paid off, and that extra income, might be nice, later down your life.

 

[OldSchoolBoats]

Sell now. Bank your money. Rent an apartment close to work until you are ready to live the dream in AZ.

 

[OldSchoolBoats]

Big question I have here is why retire at 55? Must work for the government I assume?

 

[HOOTER SLED-]

Not if they're moving to AZ

Right.....not applicable to their scenario. But I meant if they were to downsize to another purchased home.

 

[JBS]

You can sell today and not pay any taxes up to the first $500K of capital gains if you've lived in your house for the past two years.

Age doesn't have anything to do with capital gains taxes.

Thank god you finally posted. The knowledge about gains and exchanges on primary residences has been lacking

 

[HOOTER SLED-]

Big question I have here is why retire at 55? Must work for the government I assume?

Maybe he landed a union gig when he was 20.

 

[shintoooo]

Thank god you finally posted. The knowledge about gains and exchanges on primary residences has been lacking

I'm on the clock from this point on [emoji51][emoji3]

 

[37 boat]

Big question I have here is why retire at 55? Must work for the government I assume?

Nope...worked my ass off at UPS for 35 years and retired at 53 Also did a lot of side jobs...everything from selling boats to building pools...and made a few good investments along the way :thumbsup

 

[the510]

If you need to sell because your going to use the money to buy a new boat that's one thing. However, I was always told to never sell any real estate unless you absolutely have too. Move full time to havasu and rent out the Cali pad. Prices in Cali traditionally alway have gone up.

 

[Cray Paper]

Big question I have here is why retire at 55? Must work for the government I assume?

I read through the entire thread before responding to your post. Just for your information, a Union Carpenter can take full retirement at age 55. Need to have 30 years of vested work in the trade though. I will have that covered easily, as do most. Our bodies are shot and we have to maintain a specific amount of hours worked each year to be able to retire. I know a lot of the posters on this site are at our above 55 YO, but can you imagine trying to keep up with guys in their 20's performing physically difficult work. I bet you have zero experiences with this for a year let alone 30 years.

 

[COCA COLA COWBOY]

You can sell now and avoid capital gains of up to $500k since it's your primary residence. The question is can you rent for 3.5 years? Some people would have no problem doing so and others may not enjoy that at all. I do believe we are near the top of the market as I follow most Socal economists and professionals which are saying we are months away with all condition remaining the same. However, I think if Trump was to win, we may get another large bump, but that's another discussion. In fact, I have a large number of clients that are just waiting for the election to make drastic changes to their portfolio if he does win. Many look at past numbers thinking we haven't attained those yet, but they need to remember that those numbers got so high because banks were literally giving loans to anyone and some that weren't actually people. With such demand, prices attained astronomical high numbers that i don't believe we will see in this cycle unless they replicate them...who knows could happen. Also, people have less net income because we are being taxed to death.

There are cheap rentals to be had if you shop, but I may recommend if you do that you look at outlying areas and just live cheap. I'm very biased as I love the beach, but I would personally sell and rent a condo near the beach and live an amazing 3.5 years. You could also do some shopping and find a beater 2-4 unit property near the beach and rent the other units and/or VRBO them and create some extra income. Historically, if you look at the numbers near the beach they are not nearly as volatile as inland properties (Again, I'm biased).

I would think if you did rent, I would have some foresight in where you would put that equity and I would require a return on that investment to help with the rental.

 

[elcajones]

How 'bout this situation.......The wife and I have an exit (from CA) strategy when I retire in 3.5 years (when I turn 55). We'll move to our home in AZ, which we own outright. Our house in Corona just appraised for $568K, and we owe ~$348K. My better half turns 55 in December this year. My thought is to sell our primary home after she turns 55 in order to avoid capital gains taxes, and rent until we are out of here. I don't think I want to retain the Corona house as a rental.....way too much hassle, and I just want to cut all ties with CA.

Any good strategies or advice from the experts here????

That's a good plan..Because you're dealing with your retirement it's a bad time to speculate. Also, something happens when you rent a house, even to a good tenant. It will never look as good as it does when you leave it.. All the money you'll need to spend sprucing it up to sell in a few years will eat into any profits.. I'm taking some money off the table myself.

 

[LHC Kirby]

We built our house in Havasu 13 years ago and planned on retiring there but for some reason we can't seem to pull the trigger and leave Mission Viejo.

. Dang.... We should carpool we have a house in LHC for past 13 years and live in MV..... LHC house is near college Street.
.
We live Alicia and Marguerite area... Should hook up for a beer sometime.

 

[El Rojo]

How 'bout this situation.......The wife and I have an exit (from CA) strategy when I retire in 3.5 years (when I turn 55). We'll move to our home in AZ, which we own outright. Our house in Corona just appraised for $568K, and we owe ~$348K. My better half turns 55 in December this year. My thought is to sell our primary home after she turns 55 in order to avoid capital gains taxes, and rent until we are out of here. I don't think I want to retain the Corona house as a rental.....way too much hassle, and I just want to cut all ties with CA.

Any good strategies or advice from the experts here????

What happened that you have to cut all ties with CA?

 

[BHC Vic]

Big question I have here is why retire at 55? Must work for the government I assume?

I'm in the union. Started at 20 The day I hit 30 good years in out. I have too much I want to do to keep going to work

 

[BHC Vic]

Maybe he landed a union gig when he was 20.

Yup that's my plan.

 

[riverroyal]

Maybe he landed a union gig when he was 20.

like the guy that typing this right now

 

[BHC Vic]

Oh yea... And when I say retire I mean from the union everyday. I'll still do side work and would love to work the booth at lake mohave [emoji41]

 

[AFUEL7067]

Sell it now and do not rent it .If you rent it for 2.1 years you loose your tax free gains exemption .

 

[Spudsbud]

JM2C here....
do you have any experience as a landlord?
If youre thinking, just take the rent check to the bank every month?????
we owned 4 rental homes. 25+ yrs of it.
Trust me. Dont do it.

Jim

 

[TCHB]

I would be more concerned about the the total financial picture and where the income is going to come from. Living in Arizona is nice but it was also good for us in Huntington Beach.

 

[boatpi]

You can sell it take the capital gains transfer the property tax one time live in that place for a little bit but it would be destined as a rental .

Buy your new house in orange county that has a hot market for rentals which is almost anywhere right prices are through the roof because there's very little new housing being constructed other than Irvine . Then leave that place even if it's a townhome retire and enjoy the tax free capital gains.

Or keep that new place in orange county as a rental you've got your tax-free money from capital gains and lifetime income and deductions for your new rental.

But if it was me , I would:

If you don't want to commit that type of money to a rental I might be able to give you a little insight into buying a rental in Las Vegas that will bring $1,300 to $1,500 a month in your pocket additional retirement money and a much greater return on investment than orange county .

There is no major employment area that I'm aware of that you can be within a few hours of Southern California lake havasu that will give you a larger return on your investment on a newer house then in the Las Vegas Valley. I've been preaching this for years a few have taken my advice and everyone is doing well even with the price increases over the last few years now rents are on the rise. I have a trusted rental agent or you can manage it from your cell phone

 

[Dettom]

You don't have to pay capital gains on your primary residence. We're selling our Calif house in January and moving full time into our AZ house. We'll bank the money for a while and after two years sell the AZ house. We'll have to pay capital gains on that one but its not that much. Of course, all that could change for you because you're 3.5 years out and it depends on who sits in the White House. If it's a dem, you're screwed.

 

[TCHB]

You don't have to pay capital gains on your primary residence. We're selling our Calif house in January and moving full time into our AZ house. We'll bank the money for a while and after two years sell the AZ house. We'll have to pay capital gains on that one but its not that much. Of course, all that could change for you because you're 3.5 years out and it depends on who sits in the White House. If it's a dem, you're screwed.

Politics have never guided my investment thinking. The last 7 years has been great in the stock market and a time to pick up a couple of nice homes as a investments.

 

[RodnJen]

If you can rent the Corona house out for a positive cash flow, after taxes and any other bills, that Go along with being a landlord , I would keep it.
Get a property management outfit to deal with it.
Eventually it will be paid off, and that extra income, might be nice, later down your life.

This, and he and I don't agree much. Even if you aren't positive cash flow, it may still make sense with the deductions and related travel expenses.

How 'bout this situation.......The wife and I have an exit (from CA) strategy when I retire in 3.5 years (when I turn 55). We'll move to our home in AZ, which we own outright. Our house in Corona just appraised for $568K, and we owe ~$348K. My better half turns 55 in December this year. My thought is to sell our primary home after she turns 55 in order to avoid capital gains taxes, and rent until we are out of here. I don't think I want to retain the Corona house as a rental.....way too much hassle, and I just want to cut all ties with CA.

Any good strategies or advice from the experts here????

I wouldn't sell, if that is what you decide, until you are ready to leave. Capital gains doesn't appear to apply here.

 

[Bobby V]

Maybe he landed a union gig when he was 20.

I was 22. Already have 34 years in. If I was still in the field I would have gotten out at 55. Being in the office will add some years to my 401 and pension.

 

[Paul65k]

You don't have to pay capital gains on your primary residence. We're selling our Calif house in January and moving full time into our AZ house. We'll bank the money for a while and after two years sell the AZ house. We'll have to pay capital gains on that one but its not that much. Of course, all that could change for you because you're 3.5 years out and it depends on who sits in the White House. If it's a dem, you're screwed.

As long as you live in the AZ house a total of 2 years out of the previous 5 it will also be subject to the exclusion (no capital gains to $500K filing jointly) even if you purchased it as a second home initially :thumbsup

 

[mbrown2]

I would keep the cali house if you don't need to sell it and can rent it to cover or make a bit of money. Although you lose your capital gains you can always move back in for 2-3 years and sell it and avoid them again....but I would rather look at it is an income vehicle particularly where it is at; it will be worth some significant coin in 10-15 years...do the math...will make more off the 200K+ invested you walk away with or the income from rental and possible sale down the road after further appreciation.

 

[Abc123]

Great plan. Reinforce it with security.

With the current climate of the market, sell now start renting or make the move now. If there's one blip in the market, it could send a lot of other home owners and investors into panic. You don't want more competition (inventory) when you go to sell, as it will cost you big money. People can say what they want about the future of the market. Many are very optimistic and that's fine, but you're approaching retirement and must be wise and careful. If you wait a few years, you could be fine. However, if a down turn in the market happens, this could alter your chances to move to AZ.

If you want to do something and you're able to do it now, then do it now. Think security. If the market declines, you'll be glad you made the move sooner than later. If it stays where it is, you'll still be glad you made the move to AZ with your wife. It's a win/win. If you wait, the outcome could vary into other, not so favorable scenarios. Again, security.

Shintooo is correct about capital gains.

I tend to be a little philosophical at times, so I'll add this. DON'T RETIRE! When you get to AZ, use that time to do something you've always wanted to do. Keep giving your life meaning, a reason to get out of bed in the am. Most people I know, who retire, didn't live longer than another 5-10 years. People that keep going, live longer. I'm not saying go slave for the man. Just go do something.

 

[COCA COLA COWBOY]

I've had a couple people move to AZ thinking it was their dream only to get tired of the heat and move again. I grew up in Palm Desert and at 30 moved to Dana Point for a few years. When the economy shifted, I moved back, but never could re-acclimate. I absolutely hate the heat now. Went to the river last weekend and couldn't take it. Selling both boats and gonna spend the summers at the beach until I decide to give it another try.

 

[Mandelon]

Once you sell the OC property, realize you probably can't afford to buy it back.... LHC is fun for trips, but I am not sure I could handle it full time.

Unless you NEED the money out of it, I would say to keep it, hire a Property Manager and rent it out. That way you could always come back if the desert doesn't work out for you.

 

[Singleton]

Once you sell the OC property, realize you probably can't afford to buy it back.... LHC is fun for trips, but I am not sure I could handle it full time.

Unless you NEED the money out of it, I would say to keep it, hire a Property Manager and rent it out. That way you could always come back if the desert doesn't work out for you.

This. My plan is to pick up a place in Havasu that will turn into our residency (winters, weekends, etc) in the next 5 years. This will allow my tax basis to move from CA to AZ. Once my youngest is out of High School, we will sell the house in Carlsbad and pick up a condo in the Carlsbad Village to use as a weekend / summer retreat.

 

[OutCole'd]

Once you sell the OC property, realize you probably can't afford to buy it back.... LHC is fun for trips, but I am not sure I could handle it full time.

Unless you NEED the money out of it, I would say to keep it, hire a Property Manager and rent it out. That way you could always come back if the desert doesn't work out for you.

X1,000! I so wish I kept my Ca house...:thumbsdown

 

[69 1/2]

OK, so here is a dead serious question. How much money does it take to retire at 55? It's right around the corner for me and I have no idea what it takes. They used to say spend 3% of your investments but that means you would need $3.3M to have $100k per year on top of your home. Jeez!

 

[BHC Vic]

I'm really hoping my pension is there because that will make for a nice retirement on top of what I save [emoji4]

 

[69 1/2]

I'm really hoping my pension is there because that will make for a nice retirement on top of what I save [emoji4]

With people retiring at 55 and living so long I wouldn't hold my breath. Here in the Midwest the Teamsters are taking a 60% pension cut starting next year. That can be pretty tough on a guy that's been retired for 10 years.

 

[BHC Vic]

With people retiring at 55 and living so long I wouldn't hold my breath.

True. Not a lot of carpenters make it the full 30 years though.

 

[HOOTER SLED-]

I was 22. Already have 34 years in. If I was still in the field I would have gotten out at 55. Being in the office will add some years to my 401 and pension.

I was 42........20 years later than you. I guess I'm never retiring. :yikes

 

[TCHB]

Living here in Havasu has been very easy. We actually like the warm weather and great pool nights. My wife and I have not missed living in HB. I am not sure what I would do there being retired living in a track home with a small garage. Just today went out into the garage and started getting the RZR ready for dune season. Drove it around town to charge the battery. In HB I would have went to jail.

I have found out one thing being retired. There is a group of people that do nothing but complain and the other group stays busy boating, golfing, sand dunes, travel trips, grand kids, kid and projects around the house. Some days it is great to down to the channel and just hang out with a lawn chair and watch all the boats/people.

Yes you do spend money being retired!!!

 

[Mandelon]

OK, so here is a dead serious question. How much money does it take to retire at 55? It's right around the corner for me and I have no idea what it takes. They used to say spend 3% of your investments but that means you would need $3.3M to have $100k per year on top of your home. Jeez!

The retirement guys seem to think you can withdraw 4% a year. But safe returns are pretty low.. So every million you have invested gets you $40,000. How much do you need to live on is the question. You can move to Thailand and live well on $1000 a month.

There are some decent annuities but they charge a hefty management. My Father in law was getting $1500 a month for a $250,000 investment.

I have purchased several small multi-unit residential rentals. Once they are paid off we will have plenty to retire on. The tenants are paying the mortgages and the values go up year after year. I think you need to sacrifice a bit when you are younger to enjoy yourself when you are older.

 

[Abc123]

Living here in Havasu has been very easy. We actually like the warm weather and great pool nights. My wife and I have not missed living in HB. I am not sure what I would do there being retired living in a track home with a small garage. Just today went out into the garage and started getting the RZR ready for dune season. Drove it around town to charge the battery. In HB I would have went to jail.

I have found out one thing being retired. There is a group of people that do nothing but complain and the other group stays busy boating, golfing, sand dunes, travel trips, grand kids, kid and projects around the house. Some days it is great to down to the channel and just hang out with a lawn chair and watch all the boats/people.

Yes you do spend money being retired!!!

LOL.

 

[TCHB]

LOL.

In HB we lived in a track home about one mile back from the beach. No view and house to house. Now we open space with no airliners noise, and great open views. Feels like we can breath again. The hardest thing about living here is getting rest. Busy little town with lots to do.

 

[Abc123]

In HB we lived in a track home about one mile back from the beach. No view and house to house. Now we open space with no airliners noise, and great open views. Feels like we can breath again. The hardest thing about living here is getting rest. Busy little town with lots to do.

I feel you. I'm a mile and half from the beach, which is nice, but the congestion, noise and amount of people has become old. I look out my windows and see buildings. I frequently hear ambulances going to/from Hoag Hospital. I don't think humans were meant to live this way.

Moving to AZ is in my future plans. I'm considering Prescott.