Quote:
Originally Posted by 79ford
or you just assumed 320 000$ debt to make the few hundred bucks between rent and mortgage/upkeep/taxes
To me I can put 150k or so down on a 450 000$ house which leaves me with a 1500$ mortgage add in 300$ month for taxes, 200 for insurance etc I am at 2000$ to own a 450 000k house
I rent that for 1400/mo with cable and heat included, and pay no taxes or repairs and some one else mows the lawn.
I don't see where some one makes money buying the house then renting it to me in the world of record high home prices and slumping rent.
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If rents on 3 bedroom full houses have dropped that far then you are right that there is no money to be made in owning one. A rental property must at minimum cover its mortgage, taxes and operating costs, otherwise you investment is shrinking.
One of the reasons I got out of residential rental properties in Alberta was the imbalance between costs and rents along with the punitive Landlord Tenants Act here.
I can put money into Bank shares, Pipelines etc and earn 4% or better dividends, that are tax free for the first $41,000 per year for each of me and my wife. The tax status makes dividend income equivalent to 7-8% net return from property or interest, and the capital gains on the stocks isn't taxed till I sell them, just like rental houses.
I strongly doubt you will find a rental property that returns 8% net. 450,000 house rented at even 1,600 a month, no mortgage, taxes 3,000 a year and insurance of $1000, repairs and misc $1,500. Total revenue 19,200, less expenses makes net revenue $14,200 or a 3.04% return, After tax you are making 2% at best.
Even if you bought in 2007 and went through the 08 drop, shares have gone from 60 to $100, so more than double and paid you a dividend on top.
