Ignoring all debate about inflation/deflation and the out of state landlord issue, the basic fundamental of a 500k house that draws 2k in rent makes it not pencil out, no matter where it is or where the owner is. 250x rent multipliers should be avoided when 100-150x rent multipliers are abundant. If the OP mentioned a place that costs 200k-300k and pulled 2k rent, then we would have a real discussion on our hands.
I got a phone call this weekend from a friend asking my opinion if he should buy his $1500 a month rental from his landlord for 160k, I told him “absolutely, do it yesterday.” I didn’t ask if he was going to rent it out in the future, what he thought about hyperinflation, unemployment, or any other marcoeconomic issues. Simple questions is all that is needed, will it cost the same or less than rent?
It’s simple, ignore the taxes and insurance, ignore the maintenance and vacancy, also ignore the income tax deduction and the downpayment. Just use the purchase price with todays rates for a 30 yr fixed on a basic loan calculator to see where it pencils out, you can get into the details later.
500k=2700 mo -700 mo =bad
160k=850 mo +650 mo =good
Don’t pay 500k for a place you can rent for 2k, simple.
