Tuesday, February 15, 2011

Renting vs Buying

Carrying on from the previous post. Here's MLS #5870274, a snout house near my old 'hood. 1500 square feet, built in 2006.
The house looks OK, a small, boring but decent starter. They're asking $66k. Assuming 10% down, that's $337.00/mo for a 30-year fixed. Figuring in 3% property tax and $90/mo insurance, PITI runs $592/mo.

You can rent a similar snout house, in the same general area, for $1250/mo.

There are many examples like this. Which is why I think that in much of the country, outside of the most egregious bubblezones, real estate is very close to the bottom.

3 comments:

pi31416 said...

Hey! That's a 21% return on your investment if you buy it cash and rent it out! *Sigh* I wish I lived in America. I'd be lucky to get 6% return here.

w said...

lou I think you meant to say $660k. Judging from my California rose colored glasses I would say that house is worth at least a half million.

NoVa Sideliner said...

$66k? Oh my gosh. When I lived in north Dallas for a couple of year in the early 1990's, that's what a little newish brick house cost -- if you got a good deal. And to see they can still be had at that price?

And yes, that does sound like a decent rental investment -- for those who take landlording seriously enough to do it right, that is.