[quote=AN]flu, the $425k-450k would be more likely than $400k. The 4%, like you said is not likely for an investment property. It’s more likely to be at least 5% for a no cost loan. So, assuming 5% and $450k, the P&I is $1932. If you add in HOA, Tax, MR, and insurance (~$750) and you have a total cost of around $2700. So, it’s not likely to be cash flowing positive, unless you can get 4% loan AND $400k price. Which, I think is unlikely.[/quote]
I think one could probably get a loan for a rental for this at 4.5%, maybe I’m wrong. Or you could end up putting 30% down. Half jokingly…since your interest rate in a savings or CD is effective 1% or lower, it doesn’t really matter in this environment,because you aren’t really going to be losing much of your principal “doing something else”… Well, maybe if you gamble in the stock market, you might have a chance for decent returns. But then if you were going to do that, you would be defeating the purpose of investing in a rental property versus higher risk class of investment.
But one thing to consider. The fact that rent does end up being more or at least break even in CV tells me why people are looking to buy. Either as a rental (with the expectation that things will cash flow in the future), or as a primary (because things already seem to pencil out as better than rent).
So unfortunately, I think at least in the short term there will be a floor on prices of attached homes in CV. I don’t see a 3/3 falling $400k or lower anything soon.
