1% rule in the real European world

[Hans Kuyken]

Hi,

I'm a new member from Belgium (the country, in Europe).  

I've been an enthousiastic subscriber of the BP Podcast since a few months.  I'm absorbing knowledge like a sponge while working towards a first deal, but whenever I do my own calculations I get very disapointed.

For example : I come across examples of people owning units which value $140K with an monthly mortage payment of $600 and renting these units for $1340/month.  Sounds great right ? 

In my area the rent/value-ratio is much, much lower...

I can't seem to understand why someone would pay $1340 monthly as a tennant when he could own the same unit by paying off a loan at a lower price and, additionally get a tax break.

Is it that hard to get appoved for a loan in the US ?

Any comments on my thoughts ?

Hans.

[Jason G.]

Poor credit, unreliable employment, credit card debt, crazy car loans, student loans, and inability to save for a down payment all lead to renting vs. home owning. So, for instance, my SFH which I purchased in GA for $81,000 and whose down payment + closing costs came out just shy of $19,000 with a monthly mortgage + escrow of $540, you would think the tenants are insane for paying $893 a month in rent + all their own utilities, but they do, and this is a common situation for many.