Quote:
Originally Posted by Alex from Montreal
If you look at the the ratio of rent to home price in many market, you'll clearly see the "premium price you need to pay to own a house.
For example, In Boston, you can rent a two bedroom in a nice area for $1,200 per month; to purchase it, it would cost roughly $400,000 with and a monthly expense of roughly $3,000. You feel me now!
Also a currently rents are currently at their lowest price ever compared with home prices...
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Don't buy in high class markets...
You can get a $800/month rent from a $80,000 appartment. The monthly rental rate should be around 1% of the unit value. It will cover all expenses (mortgage, taxes and inflation...)
If you can get better than 1%, it's even better.
Owner of that $400,000 unit is renting at only $1,200/month because it's a high class market. At 0,3% per month he better did not consider that unit as an investment at first....