Hello everyone, sorry that I've been MIA. Work has kept me busy. Usually around this time, I have to prepare financial statements to be sent out to all our clients. Before the release, all financial data has to be checked for accuracy. This is a long and tedious process so it's kept me from blogging.
I came across this article in our local news about a raffle winning of this $2 million home a few miles away from San Francisco. It is actually located across from the famous Golden Gate Bridge in a very expensive upper middle class community. The person who won this is only 26 years old. I heard from a friend who knows of this winner that he only purchased 2 raffle tickets for a total of $300. Can you imagine the luck he had a few hundred dollars into a couple million dollars? I knew about this raffle from advertisements and commercials, but never did I imagine that this was a legitimate contest.
He has the choice to either move into this $2 million house which would require him to pay $22,000 in property tax a year. Which is not bad if you think about it as being $1,833/mo which is far less than a monthly mortgage on a single family home. His other choice is to redeem the cash prize of $1,600,000.
If you were him, which choice would you make?
I would highly consider the sweeping view of the SF Bay in this nice and secluded neighborhood. Moreover, the monthly payment is less than 1/2 of my $3500/mo mortgage which is a plus. However, it would cost me $6 every time I cross the Golden Gate Bridge back into the city. Alright, Mrs. Bee can dream!
Click here for more reading: $2million Larkspur Home
10 comments:
Cash prize, for sure!
It seems a little excessive for my tastes. (the house, not the money - hehe)
I'd go with the cash option too. After all, what kind of taxes would the 26 year old have to pay on the house? And who would he come up with that money?
Your area is 2 to 3 times more expense than where I live... My Mortage payment was only $!500 (and that included the excrow)!
I personally know someone who won a house (I blogged about it at my site!
I'd want to take the house, however would probably be forced to take the cash.
There is the question of taxes - I'm figuring that regardless of whether the house or cash were taken, taxes would need to be paid on it. For a $2+ million home, the tax bill due would be equivalent to a fair sized mortgage. Taking $1.6 million, probably 40% to 50% will be due in taxes - so at least you'd still have close to $1 million in hand.
I don't think I'd be able to handle the $22,000 property taxes on top of a $600,000 mortgage. If it were just the property taxes, no question - in that area, take the house, it's worth more than the $2 million once the market rebounds. In the mean time, while waiting for the rebound, in that area, what can you get paying $1800 a month - a nice size 1 bedroom apartment in a good neighborhood?
I'd take the cash and make it work for me. Who is to say that the house is going to appreciate in value? I would take the cash, invest a portion of it in the market, max out my IRA, and maybe buy a smaller condo and rent that out!
If you look at that house, and know the San Francisco area, you are well aware it is worth significantly more than $2 million in anything but a market torn to pieces. You could easily rent it out for $5000+ a month and just wait.
Cash is king! I'd take my $1.6 million, put $1 million in investments, then take the rest $600K and do fun things - traveling, starting charitable projects, maybe putting a 50% down payment on a $500K condo. :) Who needs a $2 million house when you can have CASH?
Huh. Well, assuming this happened to me, and I was offered a similar house in my city - I would still take the cash. I don't want or need a house that big and expensive! Think of all the other things we could do with that - travel, buy a boat, invest...
I would take the money and run! The house is gorgeous, but with that large of a house, I can't imagine the upkeep. Just cleaning and dusting would be an enormous task. Unless this person can afford a full time housekeeper, the money sounds much more tempting!
I would take the cash and run! 1.6 mil for a twenty something would be a lot more practical (and fun!) than an expensive house.
Wow. I guess the majority would take the cash and run.
I still haven't heard from the source as to what this Tommy Toy person would do.
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