Agree with scaredy. Well, until they change the marginal tax rates to something higher.
Realize that many props in SD will have HOA, mello-roos (these are hundreds $$/month), in addition to the “ITI” of PITI which renters don’t pay directly. Usually people buy a house bigger than they rent, and forget to scale up utilities and maintenance costs into their monthly nut.
my rule of thumb: At 6%/yr interest, which is 0.5%/month — it takes $500 for every $100,000 principal to just cover mortgage — and I roll in the various insurances (homeowners, PMI if applic) here to balance out the tax advantage (at today’s low rates). Property tax in SD is about 1.2%/yr, so 0.1%/month, or $100/mo per $1000,000 principal. So about $600/mo carrying cost per $100,000 house. Haven’t been too far off yet.
