According to Trulia, it is now cheaper to buy than to rent in over 75% of US Cities. Trulia’s rent vs. buy index compared the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of April 1, 2011, in the 50 most populous cities in the U.S
“With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying,” said Ken Shuman, Trulia’s spokesperson, in a statement.
I read these statistics and immediately thought that if it’s cheaper to buy than to rent, it must be a great time to buy residential real estate for investment purposes. The home in the photo above is currently listed for $489,000. It is in the Trailside neighborhood and boasts 4 bedrooms, 3 baths and is over 3,000 square feet. I did some calculations and if you were able to purchase this home for 95% of list price (an average in Park City), you would pay $465,000. You would put 20% ($93,000) down, finance 80% ($372,000) and your payments would be $1997/month (not including taxes and insurance).
I checked the Park Record and found 3 bedroom/2 bath homes that were asking $2200/month. Surely a newer home in the family friendly neighborhood of Trailside would rent for enough to cover the payments, taxes and insurance on a 30-year fixed mortgage. Then you have the pleasure of having someone else pay off your mortgage. Just think, in 20 years, this home will throw off enough income to put a kid through college. Think about it and call me if you are interested in some other great possible rental properties in Park City.