Mortgage Rates Are Lower Than Rents!

[Shafi Noss]

Looking at the Realtor.com's estimate for the properties in Jacksonville, it looks like the mortgage payment is lower than Rentometer's rent! 

For example, Zillow estimates one of its 90k properties to have payment for mortgage, insurance, and taxes at $500/mo. But Rentometer estimates the rent at around $750, which is so low it fails the 1% rule. The thing is, almost every property I've looked at in Jacksonville has a similar story. How could mortgage payments be so much lower than rents?

[Russell Holmes]

@Shafi Noss you have discovered the basic premise of real estate investing! I don't mean to be sarcastic, as at it's core that's what this forum of 1,000,000 members is here for....there is a profit margin on properly purchased investments. But it isn't a secret the renters don't know about. The thing is, as an investor, you are taking on all of the risk and responsibilities of each property. Renters like to pay one monthly housing bill and call you when the AC goes out or the roof leaks, and as an investor you plan to have reserves for those things. There is an infinite amount of money to be made in real estate, but ask anyone who leveraged to 100% on a huge portfolio in 2007, you can lose everything if you don't play the game right. A renter's only real risk is an increase in rent at end of lease term. It is on the back of this risk taken that investors make their money. They earn their living by taking calculated risks, build wealth, and renters get quiet enjoyment of their homes without a care in the world about the housing market, repairs, or property taxes. For many it isn't money keeping them from buying a house, they don't want to take the risk or hassle with it. Each side comes from a different position and get what they are looking for out of the landlord/tenant relationship. When you buy a car, you know everyone from the salesman to the truck driver delivering bolts makes some money, and you're happy with the product for the price. Same applies to landlord/tenant relations