[(former)FormerSanDiegan]

RE: Rental income and loans … Last time I checked (a couple years ago), the lender used 75% of my gross rent as income for loan qualification purposes. Presumably this accounts for vacancies, maintenance, prop mgmt, etc.
In my experience for single family homes (I’ve had two rentals and still hold one) this is in the ballpark. You should expect to spend 25-30% of gross rents on PM, maintenance, repairs, etc. If there is deferred maintenance this will be higher.

[(former)FormerSanDiegan]

RE: Rental income and loans … Last time I checked (a couple years ago), the lender used 75% of my gross rent as income for loan qualification purposes. Presumably this accounts for vacancies, maintenance, prop mgmt, etc.
In my experience for single family homes (I’ve had two rentals and still hold one) this is in the ballpark. You should expect to spend 25-30% of gross rents on PM, maintenance, repairs, etc. If there is deferred maintenance this will be higher.

[(former)FormerSanDiegan]

[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
[/quote]

I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).

[(former)FormerSanDiegan]

[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
[/quote]

I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).

[(former)FormerSanDiegan]

[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
[/quote]

I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).

[(former)FormerSanDiegan]

[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
[/quote]

I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).

[(former)FormerSanDiegan]

[quote=noone][quote=asianautica]$225k at 6% interest rate will cost ~$1350/month with 0% down. Those houses can easily rent for $1700-1900/month depending on condition. PITI – Tax deduction will bring you to about $1200/month. If you put down 20%, you’re looking @ PI of ~$1100/month and PITI – tax deduction of about $1000/month. That seems too good to be true for a 3bed/2bath house when 2 bed/2 bath apartment rents for around $1400-1500/month. If rates goes to 8-9%, then I can see that happening, but not at today’s rate.
[/quote]

I think your math is a bit off. I think you are forgetting that you have to pay the property taxes first. Then the deduction lowers the annual income that you have to pay taxes on. It’s not a tax credit.

You are correct that $225k at 6% with 0% down P&I will be about $1,350 (can you even get 6% with 0% down these days?). Adding taxes an insurance gets you up to about $1,600 a month. If you’re paying 1% in property taxes on $225k that’s $2,250 a year. Assuming the 30% tax bracket, you will be reducing your taxes by about $675 a year or $56 a month. So even including the tax deduction you’re monthly cost is over $1,500 not $1,200. For an older & smaller 3/2 in Mira Mesa that is probably the going rent.[/quote]

Noone – Are you suggesting that the total tax benefit is only $56 per month ? Or did I misinterpret your statement. The $675 would be the tax benefit in a 30% bracket for the property taxes alone. Interest is also tax deductible and constitutes a much larger amount (13,500 in the first year).

[(former)FormerSanDiegan]

OK everyone IT’s MY FAULT !
I did some research and found out that since my birth gas prices have increased by nearly 12 Times. That’s an 1100% increase in the price of gas, essentially starting at my birth.

In the 40 years prior to my birth gas did not even double in price, it only increased by about 80%.

So, it must be my fault.
Sorry guys/gals.

[(former)FormerSanDiegan]

OK everyone IT’s MY FAULT !
I did some research and found out that since my birth gas prices have increased by nearly 12 Times. That’s an 1100% increase in the price of gas, essentially starting at my birth.

In the 40 years prior to my birth gas did not even double in price, it only increased by about 80%.

So, it must be my fault.
Sorry guys/gals.

[(former)FormerSanDiegan]

OK everyone IT’s MY FAULT !
I did some research and found out that since my birth gas prices have increased by nearly 12 Times. That’s an 1100% increase in the price of gas, essentially starting at my birth.

In the 40 years prior to my birth gas did not even double in price, it only increased by about 80%.

So, it must be my fault.
Sorry guys/gals.

[(former)FormerSanDiegan]

OK everyone IT’s MY FAULT !
I did some research and found out that since my birth gas prices have increased by nearly 12 Times. That’s an 1100% increase in the price of gas, essentially starting at my birth.

In the 40 years prior to my birth gas did not even double in price, it only increased by about 80%.

So, it must be my fault.
Sorry guys/gals.

[(former)FormerSanDiegan]

OK everyone IT’s MY FAULT !
I did some research and found out that since my birth gas prices have increased by nearly 12 Times. That’s an 1100% increase in the price of gas, essentially starting at my birth.

In the 40 years prior to my birth gas did not even double in price, it only increased by about 80%.

So, it must be my fault.
Sorry guys/gals.

[(former)FormerSanDiegan]

Who is “jcfuquette” ?

Honestly, I hadn’t really zeroed in on what this person’s opinions are on anything and thus, have no beef with him/her.

There have been many characters on this board over the past couple years who like to make points that seem extreme to some folks.
My approach is to take them at their word and start an interesting debate on the facts. If it turns into name-calling and finger pointing, it’s pretty easy to ignore their posts if you want. It’s still a free country (though it’s neither inexpensive nor void of many regulations).

[(former)FormerSanDiegan]

Who is “jcfuquette” ?

Honestly, I hadn’t really zeroed in on what this person’s opinions are on anything and thus, have no beef with him/her.

There have been many characters on this board over the past couple years who like to make points that seem extreme to some folks.
My approach is to take them at their word and start an interesting debate on the facts. If it turns into name-calling and finger pointing, it’s pretty easy to ignore their posts if you want. It’s still a free country (though it’s neither inexpensive nor void of many regulations).

[(former)FormerSanDiegan]

Who is “jcfuquette” ?

Honestly, I hadn’t really zeroed in on what this person’s opinions are on anything and thus, have no beef with him/her.

There have been many characters on this board over the past couple years who like to make points that seem extreme to some folks.
My approach is to take them at their word and start an interesting debate on the facts. If it turns into name-calling and finger pointing, it’s pretty easy to ignore their posts if you want. It’s still a free country (though it’s neither inexpensive nor void of many regulations).

[Author]

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