Renting versus Buying in California
Friday, December 10th, 2010 | Comments Off on Renting versus Buying in California
One of the sites we often follow is Patrick.net, operated by Patrick Killelea. From his years of covering the California real estate market, Patrick says there is an easy mathematical computation you should perform to determine whether you should be renting or buying a CA home. Here’s the formula:
According to Patrick, a BAD deal is when the rental income is 3% or less, while the property is “iffy” or BORDERLINE in the 4-8% range. If the result is 9% or greater, then the home might be in an OKAY TO BUY situation.
Many real estate investors use numbers like this to determine if they should invest in a property. If the anticipated rental numbers don’t work out, they’re not investors.
