3 ms·

40k rent coming in on a 300k property?! You're off your rocker...

• tonyarkles 12y ago
  I'm using Canadian interest rates because it helps me do gut-checks related to the current property values around me. A $300k house here is a decent house. A 5-year closed fixed mortgage at today's rates (3.24% on promo) works out to $1456/mo. From what I've heard from friends, they're renting relatively most homes around here for about that price. Looking at MLS, there are significantly nicer homes in the $300k price range, and it probably wouldn't be a huge problem to rent one of those out for $1750/mo ($300 profit/mo = $4k/yr) While the $40k/yr rent number above does seem suspicious, the percentages otherwise work out reasonably well on the back of my envelope. Another important thing to consider is that at the end of it, even if you made $0/mo on the property, you still end up with a (hopefully) valuable piece of property to sell that had the mortgage paid off by the renters.