Good Investment - Nevada
According to demographers, Baby Boomers (people born between 1946 and 1964) and 18-30 year-olds are the largest groups that will be moving homes in the next two decades. The reasoning behind this shift is due to domestic migration and immigration, especially with 18-30 year-olds. This shift, said to be the biggest in our country’s history, will create a major boom in real estate.
But where will they move? One of the deciding factors for locations for these two groups, as well as many others, will be affordability. Let’s look at a few examples.
Bill and Mary are two married Baby Boomers who live in California near Laguna beach where there is also a video game design training school. Even though the weather is beautiful, they want to retire to a more affordable area. Mary and Bill each have an IRA as well as a small pension plan. They have a little money saved and, fortunately for them, they’ve paid off their house in Woodland Hills. It’s now worth $800,000.
They sell their house and, after commissions and fees, walk away with $750,000. Because the basis price of the house including improvements was $250,000, they make a $500,000 tax-free profit. Since Bill and Mary used the house as their primary residence for two out of the last five years, they are entitled to a tax exemption from the capital gains. Mary and Bill now have $750,000 and do not have to give the government a penny in taxes.
If Mary and Bill decide to move to Arizona or Nevada, they can buy a newer home for roughly the same square footage or bigger, let’s say for $200-$250,000. Now they have $500,000 dollars or more to help fund their retirement and pay for a lot of nice cruises, trips, theatre, dinners out, money for charitable contributions, etc.