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> when rents are less than the price of the mortgage, people don't rent out houses. The notion makes absolutely no sense So they're just going to let the house
by AnIrishDuck 13y ago
> when rents are less than the price of the mortgage, people don't rent out houses. The notion makes absolutely no sense
So they're just going to let the house sit empty? Buying/selling a house is a long term proposition because of transaction costs. Partially covering a mortgage payment temporarily is better than not recovering it at all.
If the rent payments can't cover the mortgage, they're probably going to take a hefty loss on sale, if they can sell the house at all.
- corresation 13y agoAwesome, so show me (I don't literally demand that you do, but rather mean anyone) actual data of rents that are lower than corresponding mortgages. Anecdotal evidence is very, very much to the contrary.
- huherto 13y agoIt would be useful to be able to compare the rental market with sales market to get a good idea if the houses are good to buy or not. But I have no idea how to monetize such a thing.
- AnIrishDuck 13y agoExamples are rare, because they require a perfect storm of market conditions. I'm not challenging that, just the notion that it "makes no sense". If you don't have enough equity to cover your loss on a sale, it absolutely can make sense to take a small hit on recurring mortgage payments.