I wouldn’t buy it …
but one might justify it for the son in the example.
From a landlord’s perspective, this price is still about 25% too high to make it cash flow. Not good enough for me.
However, consider it from a renter’s standpoint:
1. Pay 1400 / month rent
or
2. Put 60K down (gift from parents), pay 1550/month + 250 maintenance per month.
Assuming 30% combined state/federal bracket the renter, now buyer, comes out within $50 per month of break even. If you assume that they are also making principal payments of ~$250 per
month, that renter might consider buying the place with a fully amortized 30-year loan, rather than making upgrading their clunker for a late-model used car.
