What ARE the fundamentals?

[DWCAP]

esmith,
I dont mean to seem like I am disagreing with you all the time. You just seem to have a more bullish sentement on rents than I do. I agree that rents will create a floor underhousing. I just think that using the highest rent in the area to justify pricing isnt gonna pan out. Using your same numbers, but tying to the lower range of the rent scale I get a purchase price of $245000. Requiring a reduction of 25% on current 330000 listings.

Downpayment: 12500
Morgage: 1350
Prop Tax: 245
HOA: 325
Tax deduct: -427
dont forget 5% down brings morgage insurance:
morg. ins. 80

Total: 2000/month.
-427 tax deduction
Cost: 1575/month

This is right in the middle of the range of rents right now and doesnt include upkeep costs, homeowners insurance, any managment or advertising fees, or rent loss due to turnover. The cost of capital on 12000 isnt much, so forget that.

Plus the argument that rents rise, so long term it is a good investment is a hard sell on me. Sure over 30 years it will turn cash positive, but that still doesnt make it a good investment. Most any non retarded or high risk investment over 30 years will make a return. Plus in the time frame we are talking about, 1-5 years, who says rents go up?

http://www.baltimoresun.com/business/realestate/bal-renters0121,0,4619944.story?ref=patrick.net

http://money.cnn.com/2008/01/16/real_estate/rents_flat/index.htm?ref=patrick.net

[(former)FormerSanDiegan]

I’d like to see the data for 5/1 ARM rates for example from 2003-2006 for loans below the conforming limit as well as above, assuming zero points.

I had a 5/1 IO ARM for a relatively small loan (less than 300K) on rental property re-financed in 2003, no points. I’m guessing owner-occupied for the same deal would have been maybe as low as 5%. Perhaps late in 2003 rates bottomed about 0.5% lower, but not for long.

[(former)FormerSanDiegan]

I’d like to see the data for 5/1 ARM rates for example from 2003-2006 for loans below the conforming limit as well as above, assuming zero points.

I had a 5/1 IO ARM for a relatively small loan (less than 300K) on rental property re-financed in 2003, no points. I’m guessing owner-occupied for the same deal would have been maybe as low as 5%. Perhaps late in 2003 rates bottomed about 0.5% lower, but not for long.

[(former)FormerSanDiegan]

I’d like to see the data for 5/1 ARM rates for example from 2003-2006 for loans below the conforming limit as well as above, assuming zero points.

I had a 5/1 IO ARM for a relatively small loan (less than 300K) on rental property re-financed in 2003, no points. I’m guessing owner-occupied for the same deal would have been maybe as low as 5%. Perhaps late in 2003 rates bottomed about 0.5% lower, but not for long.

[(former)FormerSanDiegan]

I’d like to see the data for 5/1 ARM rates for example from 2003-2006 for loans below the conforming limit as well as above, assuming zero points.

I had a 5/1 IO ARM for a relatively small loan (less than 300K) on rental property re-financed in 2003, no points. I’m guessing owner-occupied for the same deal would have been maybe as low as 5%. Perhaps late in 2003 rates bottomed about 0.5% lower, but not for long.

[(former)FormerSanDiegan]

I’d like to see the data for 5/1 ARM rates for example from 2003-2006 for loans below the conforming limit as well as above, assuming zero points.

I had a 5/1 IO ARM for a relatively small loan (less than 300K) on rental property re-financed in 2003, no points. I’m guessing owner-occupied for the same deal would have been maybe as low as 5%. Perhaps late in 2003 rates bottomed about 0.5% lower, but not for long.

[Author]

Posts