Quote:
Originally Posted by stacey
Do the math, the place they are staying in would be valued around $400,000.00
If they say their mortgage payments would be around $2500.00/month before property tax's, I doubt there is much equity there...
"They pay $1,700 per month for a 1,600-square-foot, three-bedroom home in Rocky Ridge in the city’s northwest. To buy the equivalent home, they figure they would need to spend about $2,500 per month on a mortgage plus property taxes"
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Not sure what you are trying to say here.
They are renting because they figure that buying the same house would cost them $800 + $200 tax + insurance/maintenance etc. more every month.
The article illustrates how bad of an investment this house if for their owners.
In a normal market renting is more expensive than ownership or at least close to break even.
Here, the owner of the house gets 5% return on their $400K house. Negative cash flow and they get taxed for income at highest rate. They are left with 12K after tax and that's when they have no vacancy.
Getting 12K a year on a 400K investment is not a good return.
At the same time, the renters here are saving the 15K extra they'd be spending as owners. They are the winners here.