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Old 05-04-2009, 12:22 AM
Location: Santa Fe, NM/Phoenix/Puerto Vallarta
422 posts, read 790,601 times
Reputation: 209


Originally Posted by airics View Post
where is your source saying that they are leaving faster than coming in?
My real estate agent, he got this information from DMV?
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Old 05-04-2009, 12:24 AM
Location: Santa Fe, NM/Phoenix/Puerto Vallarta
422 posts, read 790,601 times
Reputation: 209
Originally Posted by gulfer View Post
If the article in the Las Vegas Sun this morning regarding thousands of more foreclosures coming onto the market is any indication, I would think that you'll see more renters. Now I do understand the media spin, but you can't argue that the help available to people that are underwater on their mortgage (cramdown, write downs, etc...) doesn't appear to be happening. Well I guess we could argue but would rather not. I do think that even families with damaged credit will be able to convince people that they will pay the rent (maybe a month or two in advance) so therefore be able to rent. Might even be able to charge a little more. People need to live somewhere.
Very accurate post, I also agree with your synopsis.
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Old 05-04-2009, 01:48 AM
86 posts, read 178,838 times
Reputation: 18
Originally Posted by airics View Post
what i am trying to get across, is that for $800, you can get a 100k home and include the taxes...This home should rent for $900-$1200... It is difficult to find an apartment in vegas for this money..so if you buy the $100k home, the odds of it NOT being able to be rented for $800 are very low in my opinion.
A few posters on these boards have bought condos for $35-$50k, a break even point would be close to $500.. shouldn't be hard to rent also... If you know where to buy, you will be fine.. If you buy in the east, you are on your own.
I think your $800 break even point for a $100k rental property is way too optimistic. See my calculation below.

Home value: $100,000
Loan value: $75,000 (assume 25% down payment)
Mortgate interest rate: 7% (it is difficult to obtain a loan less than $100k. If you manage to get it, be prepared to pay a higher interest rate, at least this is what I was told.)
Monthly mortgate payment: $500
Insurance: $50/month
Property tax: $120/month (property tax is based on the property's fair market value which is always higher than the price you paid for the REO property)
HOA fee: $30/month
Home warranty insurance: $40/month
Expected vacancy cost: $100/month (it will be foolish to assume that the property will be rented out 100% of the time. One should expect the property will on average stay vacant at least one month a year.)
Wear and tear: $70/month (This may be optimistic. One should expect to at least replace the carpet and paint the interior at least once every few years. Keep in mind that this is a rental property and your current renter will not take care of it the same way as if you were living there, while your next renters will want everything to look clean and tidy before they move it. A major maintenance operation, such as replacing an aging roof, can cost $10k or more.)
Repairs: $50/month (even with home warranty, you should set aside some money deal with repairs not covered by home warranty.)
Property manager's fee: $100/month (this applies to investors who do not live in Vegas - I suspect most investors following this thread are in this category, so it is quite relavent.)

Total monthly cost: $1060.

One can certainly argue that the numbers above are too optimistic or too conversative, but I think the above total monthly cost should be a good ball park figure.
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