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May 10, 2009 at 10:01 PM #396882May 10, 2009 at 10:37 PM #396235PadreBrianParticipant
[quote=jpinpb]
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
There’s the rub, the more desirable areas will always have higher rents.
May 10, 2009 at 10:37 PM #396487PadreBrianParticipant[quote=jpinpb]
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
There’s the rub, the more desirable areas will always have higher rents.
May 10, 2009 at 10:37 PM #396709PadreBrianParticipant[quote=jpinpb]
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
There’s the rub, the more desirable areas will always have higher rents.
May 10, 2009 at 10:37 PM #396765PadreBrianParticipant[quote=jpinpb]
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
There’s the rub, the more desirable areas will always have higher rents.
May 10, 2009 at 10:37 PM #396907PadreBrianParticipant[quote=jpinpb]
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
There’s the rub, the more desirable areas will always have higher rents.
May 10, 2009 at 11:04 PM #396265anParticipantWhy wouldn’t you buy now if what you’ll be paying is cheaper than renting a similar place and you’ll be making it your primary resident for 5-10 years? If you say, well, if you rent, you can buy a better house at the bottom 5 years from now. I can very well say that, if it’s cheaper to buy than rent the same house, if you buy, 5 years from now, you’ll have even more money to down to buy that better house and rent your current place out for at least break even. Not everyone is living in areas that are still cheaper to rent than buy.
May 10, 2009 at 11:04 PM #396517anParticipantWhy wouldn’t you buy now if what you’ll be paying is cheaper than renting a similar place and you’ll be making it your primary resident for 5-10 years? If you say, well, if you rent, you can buy a better house at the bottom 5 years from now. I can very well say that, if it’s cheaper to buy than rent the same house, if you buy, 5 years from now, you’ll have even more money to down to buy that better house and rent your current place out for at least break even. Not everyone is living in areas that are still cheaper to rent than buy.
May 10, 2009 at 11:04 PM #396739anParticipantWhy wouldn’t you buy now if what you’ll be paying is cheaper than renting a similar place and you’ll be making it your primary resident for 5-10 years? If you say, well, if you rent, you can buy a better house at the bottom 5 years from now. I can very well say that, if it’s cheaper to buy than rent the same house, if you buy, 5 years from now, you’ll have even more money to down to buy that better house and rent your current place out for at least break even. Not everyone is living in areas that are still cheaper to rent than buy.
May 10, 2009 at 11:04 PM #396795anParticipantWhy wouldn’t you buy now if what you’ll be paying is cheaper than renting a similar place and you’ll be making it your primary resident for 5-10 years? If you say, well, if you rent, you can buy a better house at the bottom 5 years from now. I can very well say that, if it’s cheaper to buy than rent the same house, if you buy, 5 years from now, you’ll have even more money to down to buy that better house and rent your current place out for at least break even. Not everyone is living in areas that are still cheaper to rent than buy.
May 10, 2009 at 11:04 PM #396937anParticipantWhy wouldn’t you buy now if what you’ll be paying is cheaper than renting a similar place and you’ll be making it your primary resident for 5-10 years? If you say, well, if you rent, you can buy a better house at the bottom 5 years from now. I can very well say that, if it’s cheaper to buy than rent the same house, if you buy, 5 years from now, you’ll have even more money to down to buy that better house and rent your current place out for at least break even. Not everyone is living in areas that are still cheaper to rent than buy.
May 10, 2009 at 11:07 PM #396255SDEngineerParticipant[quote=jpinpb]Thanks, dave, nsr and SDE. I think when I calculated a while ago I was pushing 2900 a month or so for the privilege of owning, minus tax write off, I’d still be out of pocket enough to not entice me w/the distress in the complex and economic uncertainty.
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
I agree that in your area it’s pretty clear it’s not close to rental parity.
If a fair market rent is about $1750 or so for your unit (assuming your water bill is $50 or so per month which is rolled into your rent right now), I think it would start making sense once the prices fall to about 305-310K, including the tax advantages. At 300K @ 4.875 (0 pt FHA on todays rate sheet from my builder, assuming 3.5% down but rolling the 1.75% up front MIP into the loan), you’re looking at a total payment of about $2250 including PITI, mortgage insurance, and a $250/mo HOA fee. Depending on income bracket, there’s probably around $400/mo in tax savings, so you’d be looking at a comparable payment of $1850 at that level.
BTW, while the financing rate is historically low, rental parity is usually determined by comparing the same unit purchased with 20% down. At 3.5% down, if you can get into a unit at a price only $100-200 higher than it would rent for, it’s a pretty decent deal historically. Once you can buy a unit with 20% down where the market rent is significantly above what the PITI and maintenance payments work out to be, investors step in pretty quickly and make a floor.
In my case, our townhome has low HOA’s (about $100/mo), a comparable market rent of $2200, and after figuring the tax advantages our net payment would only be about $2280 (w/3.5% down), so it made sense for us.
In your case, I think your complex has another 15-20% to drop. I suspect this is true of most of the higher end and coastal areas.
May 10, 2009 at 11:07 PM #396507SDEngineerParticipant[quote=jpinpb]Thanks, dave, nsr and SDE. I think when I calculated a while ago I was pushing 2900 a month or so for the privilege of owning, minus tax write off, I’d still be out of pocket enough to not entice me w/the distress in the complex and economic uncertainty.
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
I agree that in your area it’s pretty clear it’s not close to rental parity.
If a fair market rent is about $1750 or so for your unit (assuming your water bill is $50 or so per month which is rolled into your rent right now), I think it would start making sense once the prices fall to about 305-310K, including the tax advantages. At 300K @ 4.875 (0 pt FHA on todays rate sheet from my builder, assuming 3.5% down but rolling the 1.75% up front MIP into the loan), you’re looking at a total payment of about $2250 including PITI, mortgage insurance, and a $250/mo HOA fee. Depending on income bracket, there’s probably around $400/mo in tax savings, so you’d be looking at a comparable payment of $1850 at that level.
BTW, while the financing rate is historically low, rental parity is usually determined by comparing the same unit purchased with 20% down. At 3.5% down, if you can get into a unit at a price only $100-200 higher than it would rent for, it’s a pretty decent deal historically. Once you can buy a unit with 20% down where the market rent is significantly above what the PITI and maintenance payments work out to be, investors step in pretty quickly and make a floor.
In my case, our townhome has low HOA’s (about $100/mo), a comparable market rent of $2200, and after figuring the tax advantages our net payment would only be about $2280 (w/3.5% down), so it made sense for us.
In your case, I think your complex has another 15-20% to drop. I suspect this is true of most of the higher end and coastal areas.
May 10, 2009 at 11:07 PM #396729SDEngineerParticipant[quote=jpinpb]Thanks, dave, nsr and SDE. I think when I calculated a while ago I was pushing 2900 a month or so for the privilege of owning, minus tax write off, I’d still be out of pocket enough to not entice me w/the distress in the complex and economic uncertainty.
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
I agree that in your area it’s pretty clear it’s not close to rental parity.
If a fair market rent is about $1750 or so for your unit (assuming your water bill is $50 or so per month which is rolled into your rent right now), I think it would start making sense once the prices fall to about 305-310K, including the tax advantages. At 300K @ 4.875 (0 pt FHA on todays rate sheet from my builder, assuming 3.5% down but rolling the 1.75% up front MIP into the loan), you’re looking at a total payment of about $2250 including PITI, mortgage insurance, and a $250/mo HOA fee. Depending on income bracket, there’s probably around $400/mo in tax savings, so you’d be looking at a comparable payment of $1850 at that level.
BTW, while the financing rate is historically low, rental parity is usually determined by comparing the same unit purchased with 20% down. At 3.5% down, if you can get into a unit at a price only $100-200 higher than it would rent for, it’s a pretty decent deal historically. Once you can buy a unit with 20% down where the market rent is significantly above what the PITI and maintenance payments work out to be, investors step in pretty quickly and make a floor.
In my case, our townhome has low HOA’s (about $100/mo), a comparable market rent of $2200, and after figuring the tax advantages our net payment would only be about $2280 (w/3.5% down), so it made sense for us.
In your case, I think your complex has another 15-20% to drop. I suspect this is true of most of the higher end and coastal areas.
May 10, 2009 at 11:07 PM #396785SDEngineerParticipant[quote=jpinpb]Thanks, dave, nsr and SDE. I think when I calculated a while ago I was pushing 2900 a month or so for the privilege of owning, minus tax write off, I’d still be out of pocket enough to not entice me w/the distress in the complex and economic uncertainty.
I agree w/TG that some areas have seen enough distress and rents are very close to mortgage. But more desirable areas still have a ways to go IMO. [/quote]
I agree that in your area it’s pretty clear it’s not close to rental parity.
If a fair market rent is about $1750 or so for your unit (assuming your water bill is $50 or so per month which is rolled into your rent right now), I think it would start making sense once the prices fall to about 305-310K, including the tax advantages. At 300K @ 4.875 (0 pt FHA on todays rate sheet from my builder, assuming 3.5% down but rolling the 1.75% up front MIP into the loan), you’re looking at a total payment of about $2250 including PITI, mortgage insurance, and a $250/mo HOA fee. Depending on income bracket, there’s probably around $400/mo in tax savings, so you’d be looking at a comparable payment of $1850 at that level.
BTW, while the financing rate is historically low, rental parity is usually determined by comparing the same unit purchased with 20% down. At 3.5% down, if you can get into a unit at a price only $100-200 higher than it would rent for, it’s a pretty decent deal historically. Once you can buy a unit with 20% down where the market rent is significantly above what the PITI and maintenance payments work out to be, investors step in pretty quickly and make a floor.
In my case, our townhome has low HOA’s (about $100/mo), a comparable market rent of $2200, and after figuring the tax advantages our net payment would only be about $2280 (w/3.5% down), so it made sense for us.
In your case, I think your complex has another 15-20% to drop. I suspect this is true of most of the higher end and coastal areas.
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