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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (49966)	3/10/2006 9:46:58 PM
From: sammy™ -_-	Read Replies (1) \| Respond to of 306849

It is now far cheaper to rent a house than it is to own that same house, even with the deductibility of mortgage interest figured in. It is possible to rent a good house for $1800/month. That same house would cost at least $700,000. Assume 6% interest we can see that a buyer loses at least $4,936 per month by buying. Renting is a loss of course, but buying is a much bigger loss. Renting: Rent: $1,800 ---------------------- Monthly Loss: $1,800 Buying: Property Tax: $486 ($729 per month at 1.25% before deduction, $486 lost after deduction.) Interest: $2,333 ($3500 per month at 6% before deduction, $2333 lost after deduction.) Other Costs: $450 (Insurance, maintenance, long commute, etc.) Principle loss: $1,667 (Modest 3% yearly loss on $700,000. Reality will be much worse.) ---------------------- ; Monthly Loss: $4,936