[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
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I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).