Home › Forums › Housing › Houses that sold in 2004, re-selling in 2006 › I ran the numbers
I ran the numbers …
Assuming 750K purchase, 20% down, 5.5% I/O Loan.
Monthly outlays assumed: interest = 2750 Taxes = 687/mo HOA/other (mello roos) = 300 Insurance = 150 Total monthly = 3937
26 months total = 102363
In 35% combined fed/state bracket there is a tax savings of about 31K over the 26 months.
AFTER Tax outlay ~ 71K.
Grosssale (assume 7% commission and costs) = 0.93*825K = 767,250
Profit from sale = 17,250
After tax outlay minus profit = ~ 54K = 2076 per month for 26 months to live in the home.
Market rental rate ~ 4% of value = 2500 per month.
Monthly savings by owning in this example : about $400
Opportunity cost of tying up downpayment of $150K, assuming 4% average return = $500 per month.
Looks like a net loss to me.
