OT: make it make sense

[pseudonym]

Why would someone pay $800k for this house when they could rent this house for $2,650/month?

That's a gross rent multiplier of over 25! Not only is the GRM massive, but the rental option is furnished. So, $2,650/month with the furniture, or $800k for the empty house?

For the real estate people on the board: What is a typical GRM today?

I'm tempted to find a rental and invest my equity.

 

[Shmuley]

So you assume the rental rate will remain static over the term of the would-be mortgage loan?

 

[bulldognation]

Maybe the buyer will turn that $800k into $1.2M in 5 or 10 years?

 

[pseudonym]

So you assume the rental rate will remain static over the term of the would-be mortgage loan?

No. Just like I don't assume that the $800k invested elsewhere will remain static over time. I can keep up with rising rental rates if I have $800k to invest that I didn't put into a house.

I'm just comparing the price tag of the house to the exact same house available for rent.

 

[pseudonym]

Maybe the buyer will turn that $800k into $1.2M in 5 or 10 years?

I can invest better elsewhere.

 

[turkish]

I can invest better elsewhere.

Then what are you doing wasting your time looking at po folks listings like that, Mr Buffett?

 

[pseudonym]

Then what are you doing wasting your time looking at po folks listings like that, Mr Buffett?

Sorry, I should have said anyone can invest better than that. Sub 10% annualized.

 

[aTotal360]

Blackrock level tax benefits.

 

[Called3rdstrikedawg]

Where can you find an $800k home to rent for $2650 a month? The note on that home with 20% down is $5287

 

[turkish]

Sorry, I should have said anyone can invest better than that. Sub 10% annualized.

“Sub 10%” is a big range, Warren. Joking.

I see he said 5-10 years, so, you’re probably right.

 

[skipperDawg]

Move that SOB to Montana and double the rent
my man

 

[pseudonym]

Where can you find an $800k home to rent for $2650 a month? The note on that home with 20% down is $5287

I linked the dual for sale/for rent listings on the same house.

25 GRM is crazy high. That’s why I’m asking if anyone in the biz knows what is typical these days.