Lake Home Advice

I built a lake home which I live in. I bought the lot in 02 or 03 for 55000. Moved in 2004 on New Years Eve. My mortgage is 200,000. The home is on Norris lake in TN. It is in a subdivision that boomed after I bought my lot. Its close to the interstate also. The guy across the street is building a 500,000 weekend home. The lot next to mine just sold for 150,000 and it is smaller than mine. He is going to build something giant. My home is not the smallest in there but is being dwarfed by these new ones. TVA announced it would sell no more land for development. When I had the home appraised for the mortgage I thought it was a mistake when they said 280,000. I looked on zillow last night and it said 375,000. I know that may not be accurate but if lots cost that much the math makes sense.
I am not rich, in fact with a new baby and medical bills and associated things I have been tapping into my saving account every month for over a year. I am afraid to see what my next tax appraisal will look like.
If I was to sell it I could buy a non-lake home and have no mortgage. I would like to become an investor, and get away from working for others. Anyone have any advice? Sorry so long.

  1. I think Zillow has less credibility than tax appraisals do for putting real values on property - and I have just about zero confidence in them…get an appraisal from a real appraiser.

  2. If you sell now, it’s been over 2 years and you will have no taxable gain (I assume that when you say there is “a new baby” that you mean it’s yours and you’re married)…you and your wife can sell your principle residencce without paying capital gains as long as the gain is less than $500K…

  3. Your taxes are going nowhere but up…



Sell that mother.

You’re in a market that has vanished for most of America. The fact that money is a little tight for you tells me the best thing is to sell.

BUT… Do yourself a little favor here. Put a for sign up on your front lawn with your phone number. If things are that good where you are word will spread like wild fire that your selling. Then wait for the offers to come in. Play them against each other and you could very well end up with an offer you will not believe. I live in a lake front home. The market for these houses is like nothing else. It’s in a world by it’s self. I left a forsale sign from another property in front of my shrubs after unloading my truck. Never knew it was there. That weekend I received 20 phone calls. Lake front communities are very tight. If yours is like mine, every friend you have is down on weekends and they ALL want to live on the lake. Your neighbors will call these people so fast your head will spin. Not a single house in my neighborhood has been sold by a realtor in 8 years. they have all gone by word of mouth.

Good Luck!

I know a place like that in CT. People are paying tons for older cottages and houses and bulldozing them to make way for very large million plus dollar homes. Lakefronts do tend to be hot places.

I think they are all giving you accurate and wise advice.
My new guru is Dave Ramsey. While they rest of the world is going crazy on borrowed money he preaches just the opposite. Pay off everything you can then buy only with cash.
Most investors argue to use opm, so I know I’ll get slammed for even suggesting to pay cash for investment property but any way… If you can pay off your primary residence You should go for it, thats freedom!!!

Thanks for all the advice. I think I will have it appraised. I can’t help but think the guy that spent 150,000 may have paid too much. Not to step on anyones’s toes here I am from Buffalo myself but people are known to move from the north to TN and pay way more for property than the locals are used to. I am married so is it true there is no capital gains even if I trade down to a less expensive house ? I don’t know if I can get the wife to go along with selling. Her brother was general contractor on the build and built it for cost as far as I know. I will offer him some cash if I sell and maybe he will build for me again. (I doubt he would build for free next time though).

Funny that you bring up Dave Ramsey. I have read his books and heard him on the radio a bunch. The story I want to hear is how it all went bad for him, so I won’t do the same thing. You are correct about freedom. I can’t help but think how my life would change if my home was paid off.
What is the best way to play offers against each other? Do you think the market will turn to crap for lake homes as well? I don’t think Tennessee had as much speculating going on compared to some places.

The tax code no longer ties gains from the sale of one property to the purchase of another…if you have owned and lived in the property was your primary residence for two of the last five years, you don’t pay capital gains…period. You can only use this exclusion every two years.

Pretty good deal for the Feds…I actually look for that to change as the Democrats move to pay for everything for everyone…


You know your market better than I do. Lake front homes are less prone to big drops because they are limited in number. However, anything can drop in price.

As far as playing offers against each other, what I’ve done in the past is simply state “ya know I just put that sign up to see what types of offers I would get, If I get the right number I’ll sell” That way you can take offers from different people and tell new callers “well I’ve been offered $450,000 I’m going to make a decision here by the end of the month, so if your really serious get me something in writing” This way YOU are in the drivers seat, you never said you were GOING to sell, you said you wanted to see what type of offers you would get. This can also aid in your wifes decision. If you guy’s get a number that is too good to pass up, don’t pass it. If you don’t get a great offer…

YOU LIVE ON A LAKE MAN!!! Most people have to go on vacation to do what we do EVERYDAY!

Remember though, you may never be able to afford a Lake front home again if you sell. So think about what your doing.

You make excellent points. I agree that I will probably not be able to afford another lake home(especially if I keep making money for other people IE a job) Living on a lake sure is nice. I never dreamed I would be in this situation. My wife is about to go from a LPN to a RN so I figure we can make it ok with the bills, but it sure is tempting to go debt free in Tennessee. I will get an apraisal and go from there. I may put the sign out to see if I get an unrefusable offer based on the appraisal.

There is something very cool about owning and living in a property that, if you had to buy at market value today, you could not afford.