How do I protect real estate profite until the market comes down?

[dixion]

Thanks in advance for any help. My wife and I sold our house 19 months ago, and after paying off all bills, auto loans etc., we came out with about $80.000. We look at this money as a savings account. The only thing that we did with $20,000, is buy some gold and silver, which has done OK and I still look at as savings.

We bet back then that the real estate market would crash and I feel that the worst is yet to come.Our plan was to rent, sit on this money and use it for a down payment on our next house.

The problem is that between the two of us we make about $170.000 a year and at tax time this year, on top of what we already paid, we owed $9,000 more. We maxed out our defered comps, changed our deductions, but I think we will still get killed next year because we don't own a house.

I am worried that if the market takes a couple of years to deflate that I could lose my seed money to buy another house to the IRS. Someone at work said that I need a losing bussines. This sounds fishy. Other than one of us quitting our jobs, what can we do to defend our money?

[technologic]

wtf does defending your money mean? you're taking a gamble in renting instead of buying, paying extra money due to lack of home ownership should've entered your valuation calculations.

[DcifrThs]

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wtf does defending your money mean? you're taking a gamble in renting instead of buying, paying extra money due to lack of home ownership should've entered your valuation calculations.

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dude, he's invested in gold...gold only goes up!

seriously though, why is this 9k a worry if one has invested a good 20k in gold and silver which have both perfromed exceptionally well recently.

im mostly joking here... as doug said, you should obviously consider the tradeoffs and it doesn't sound like you have.

Barron

[dixion]

You are correct, I did not plan very well when it came to this issue. But also playing into the decision to sell the house was the constantly barking dog next door,the kid down the street who started a band in his garage, an hour and a half drive to work, and a three year, upcoming caltrans project on the road I took to get there. Quality of life was close to zero. One day I just stopped at the hardware store and bought a for sale sign. I took very good care of my house and priced it to sell, so things happened pretty fast after that. I guess in the same way some people impulse buy, I impulse sold. Now I'm curious as to what other people who rent do to legally gain tax write offs.

[ilikeaces86_]

The reason you were getting these so called "tax write offs" is because you were allowed to deduct the interest you payed on your mortgage. When you rent you don't pay that interest in the first place so you are actually saving more money. Also when you rent you don't have to pay property taxes which you had to when you owned your house.

[chalk7]

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The reason you were getting these so called "tax write offs" is because you were allowed to deduct the interest you payed on your mortgage. When you rent you don't pay that interest in the first place so you are actually saving more money. Also when you rent you don't have to pay property taxes which you had to when you owned your house.

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well said. i can't understand how people don't take your points into account. the main benefit to owning the home from a financial standpoint is the potential appreciation. the op has indicated that he doesn't project there to be any, thus he is doing what he should at this point.