PR, In general, your idea is sound, when owning is cheaper than renting, own. I don’t follow your math though in your example. What about the mortgage? That’s another $2000/month. Some other assumptions may be a bit high, but
Rents are frustrating, as you point out, a quick check of Craigslist list shows little in Lake Forest most 2 bedrooms are $1450. However, those are 2/2 dual master set up, with a garage and slightly larger. And a check also shows several pushing the reductions. The competition will heat up and a 2/1 without garage will lead prices down.
Honestly, I wouldn’t be surprised to see these units end up at literally 1/3rd their peak price. Several items point to them losing 60-70% of their peak value.
If you go 100X their rental value you get $140K currently and likely falling. Look at the 1999 sales price and add 5% a year you get $130K. Look at the 1997 bottom price and add 5% a year and you get $105K. With these places actually having sold for $390K in the last year, there’s a lot of loss coming this way.
