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

To: Dale Baker who wrote (86114)	8/19/2007 4:44:10 PM
From: Tradelite	Read Replies (1) \| Respond to of 306849

That's a generic question that I cannot answer in full, because it would require me to KNOW what the fair market value of a 4-BR, 4-BA, three-level home with 2+-car garage would both rent and sell for in my neighborhood at the moment. I'd want several professional opinions on that, in addition to my own, which would be biased. Given that rent is "whatever the landlord can get at the time he's trying to get it" and doesn't always involve past comparables and more depends on what competition exists at the time renters are looking for a particular type of property in a particular location, I can't judge what rent would be at the moment with any credibility. My major handicap is lack of access to real-time MLS data for both sales and rentals. However, I would roughly estimate marketable rent at about $4,000 per month. Multiply that figure by years' worth of renting--pick three years, four years, 10 years, whatever. Then contrast that with the actual net cost per month to a borrower if the house is bought, rather than rented. Factor in the mortgage-interest deduction which subsidizes a borrower's monthly payments , plus the tax deduction for property tax, and consider the fact that in the subject property's estimated price range, the buyer is not going to be a first-timer, but is more likely to bring quite a bit of cash to the table as a downpayment. So who knows what loan amount we're talking about? See? It isn't a simple question to answer, and the answer wouldn't apply, anyway, to any borrower or seller or renter except the ones actually doing a deal at this particular time.