I would start to consider buying a SFR for investment purposes at 150x rent. (For a principal residence it makes sense maybe even slightly higher than this) Forget the HELOC. You want the best terms on the mortgage with 20-25% down.
Condos, I would want a bit lower because of HOA.
Example: 350K SFR would be 2333 monthly rent at 150x.
Assume 233 per month property management, and you roughly break even before maintenance.
Assume maintenance averages $200 per month (typically it’s more like $0 per month, then $500-$3000 periodically).
Depreciation is equal to about 150-200 per month in tax benefit depending on your circumstances.
So, after tax this is about break-even cash flow.
Your benefit is that you get principal pay down of about $250 per month.
Your risk is that the value of the home declines, rents decline and vacancies.
Somewhere less than 150x starts to work for me for SFR.
IF annual condo HOA fees are 0.6% or less than the value, it might start to make sense there as well. Also, strength of the specific rental market is key.
