Cribline Ask Eric – Some insights on refinancing, knowing when to do it!!!

January 30, 2013 By Leave a Comment

The below is an exchange from a Cribline reader about refinancing.  If you’re considering refinancing your home anytime soon, please find some suggestions below that may be helpful.

This was submitted via The Cribline Facebook page.  Feel free to submit your questions or comments!

    • ? for you. Right now I have a 2nd mortgage on my house. It has a higher interest rate as I took out equity to start my business. It is a 15 year mortgage so I pay a high monthly payment. I can refinance both loans into 1 – at a lower rate. But since I don’t have 20% equity b/c my home value dropped I’d have to add a PMI. Is it worth it to refinance now and save $450 a month, knowing that I adding a $330 PMI. Or should I wait 6 months and hope I can refinance w/out a PMI if my home value increases with a projected announcement of a metro station w/in walking distance? any advice?

    • Well let me start with the low hanging fruit or the obvious. With the proposal of refinancing and adding PMI, you’re still lowering your payment by $120/mo. an amount some would equate with a car payment.

    • Another option I suggest exploring is breaking up the loan again with one primary mortgage and a secondary mortgage what would cover the 20 percent down. While the second mortgage would be at a higher interest rate, it is still tax deductible and you can set a time schedule to pay that off. PMI is not tax deductible as you may already know. I don’t know how much you have in equity, so the new second mortgage could be lower than the 20 percent of the value of the home. Also, I don’t know how long you’ve had the current second mortgage, but refinancing, I’m guessing, would be at a lower amount, which would still bring down the cost.

    • The 3rd option, as you mentioned, is to play the waiting game. That also seems viable given the market is hot right now, and housing prices for 2013 are expected to rise between 5 and 10 percent. If the low estimate of 5 percent appreciation would give you the needed 20 percent, then you might be well served to wait. This would also mean you’re paying down 6 months more on the current mortgages, lowering the principle, and therefore lowering the amount you refinance, which would reduce your bottom line even further.

    • I would pencil out every scenario and do what I call “follow the numbers.” In other words, once you work out the math equations, the numbers often speak for themselves and practically make the decision for you.

    • I hope this is helpful! Eric

    • Happy house hunting!
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The Cribline’s Ask Eric – Are Good Faith Estimates Accurate?

July 11, 2012 By Leave a Comment

Dear Eric:

My husband and I recently bought a condo. At closing, we found out that our taxes would be $150 dollars more each month than was originally estimated. The closing agent and our realtor both said there was nothing that could be done, that the Good Faith Estimate is just that – an estimate – and we had no choice but to pay the higher monthly cost.

My question is: is this kind of thing normal? Is there anything we should have done differently?

Thanks! AD

 

Dear AD,

I agree that a “Good Faith Estimate” is just that, but this is not the norm.  While the loan should always look up the tax bill, which is available to the public, the taxes are subject to change when new bills are issued (annually or semi-annually) and/or during a transfer of property.

Looking ahead, it’s also important to point out that it is normal to have shortages or overages in the monies that are set aside in escrow for taxes, and the bank typically analyzes your account once a year to make any adjustments that may be necessary.  I actually got money back this year because tax rates fell in my area.

For those who are about to close on a home or looking to do so, here are a couple things that you can do to empower yourself and make sure that the numbers line up:

The first thing is look up the current property taxes that are in the public domain (as I mentioned).  For DC click here for the link.  You will need to plug in the square and lot number (which you can get from your realtor).

The second thing you can do is make sure the lender you are using checks out. I would make sure you have several references.

Another thing to keep in mind is that if the home you purchased was just remodeled or renovated, the actual property tax assessment by the city may be outdated… and in some cases, very outdated.  I usually estimate that every $100,000 of the properties value is about $1000/year in property taxes. This is just a rule of thumb!

Below is the actual “real estate math” provided by DC:

Class 1 (residential property): For this type of property (which can also include a rental unit) the tax rate would be $0.85. So, if your home is assessed at $100,000, divide $100,000 by 100, which would be $1,000, then multiply by $0.85 by $1,000, which would be be $850 (for the year).  Keep in mind that this would be before the homestead or senior citizen deduction).

Class 2 (investment or commercial property): If your property is assessed at a total value of $3 million or less, then your tax rate is $1.65. If your property is, again, assessed at $100,000, divide $100,000 by 100. That amount is $1,000. Then multiply $1.65 by $1,000. Your annual tax is $1,650.

One final note:  Be aware of your tax assessment and how your escrow payment is set up.  If you notice a discrepancy, notify the mortgage company ASAP so they can adjust it accordingly. Also, if you feel that your property tax assessment is higher than it should be, you can contest it with the city.

 

 

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Ask The Cribline – Options for a depreciating home, there is a bright side

June 19, 2012 By Leave a Comment

Dear The Cribline:

Currently, I am 3 years into a 30 yr mortgage in PG county.The value of my home has depreciated drastically. Recently, I attempted to refinance my home, and discovered that it wasnt worth the $102/month savings due to the FHA mortgage insurnace. I am interested in relocating back to the DC area, and I would like to discover some options that are available. Thanks! CM
Hello CM,

There are a number of options, but without more specific information, my response is limited.

Here are my thoughts…

You can always sell your current property now, and use the equity, if there is any, on a new property in DC.

If you’re mortgage is underwater (the home is valued less than the home is worth), you may want to consider renting out your existing property.  I would check Craigslist or other rental resources like the Washington Post to examine what similar properties are renting for.

My rule of thumb, and you need to consult your accountant, is if you can at least cover your mortgage with the rental income, that could allow you time to regain some of the losses incurred by your property.

I take a fairly conservative approach to real estate investing, and I view it as a long term proposition.  Given that you have a 30-year mortgage, and you will continue to pay off the principle on the loan, you will be ahead of the game at some point down the road.  If rents continue to rise, and the amount you owe to the bank continues to lower, and the housing market improves in your area, you can win all the way around in the long run.

While in the short-term your market is down, the appreciation trajectory has always gone up over time in real estate, similar to the stock market.

With interest rates so low right now, and DC’s market so hot, your property in PG county may be going down, but your new property could make up for it.  Again, in the long-term, both will likely increase, and by buying a second home you will have just doubled your assets–both likely to appreciate a steady clip over the life of their mortgages. The average rate of appreciation over a 30-year mortgage is about 5 percent.  DC’s market has well outperformed the rest of the nation for some time.

If you want to know more, I suggest that you call a mortgage expert and go over the numbers.  I highly recommend checking with Zachary Bodine who is a Cribline “approved vendor” and mortgage banker with First Home Mortgage.  He can help you assess if  buying a new home and renting the existing one are plausible.

I hope this is helpful, Eric

 

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The Cribline’s Ask Eric – How Much Does It Cost To Add Onto A House?

May 25, 2012 By Leave a Comment

Hi Eric,

My husband and I just bought a lovely home in Shaw that we are so happy with! The location is great and right now, even though it is tiny (900 sq ft), it is all the space we need. I could see us potentially wanting more space in about 5 years, and I am trying to start saving for an addition, but have no clue how much these things tend to cost! We would ideally like to put a two to three story addition on the back of the house–likely just one additional room on each floor and one full bath on the upper level (I’d say we’d add about another 400-600 sq. ft).

Do you have any idea how much this would cost or do you know any online estimator tools that could give me an idea of how much I should be saving?

Thanks!

-MK

Dear MK,

Thank you for the question. With inventories in the district being so low, I expect this to be a question on a lot of people’s mind.  I have several friends who have added on to homes, and have consulted with contractor Bill Bodine who is on The Cribline’s Approved Vendor list about your question.  The rule of thumb is about $100  to $200 per square feet.  That amount can also be higher if you decide to install top of the line faucets, toilets, or depending on the foundation, electrical requirements, and exterior materials.

But as a rule of thumb, adding another 600 square feet would be about $60,000 to $120,000.

You need to make sure that your contractor is licensed in DC, and has a successful track record of navigating the DC permitting system. I would also highly suggest getting several references.

I hope this is helpful.  Eric

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The Cribline’s Ask Eric – Concerns with Putting an Offer on a Poorly Renovated Home

May 23, 2012 By Leave a Comment

Dear Cribline: 

My husband and I really want to buy on the hill. We want a 3 bd ideally, under $600K – and have been looking for months. We saw a home on Potomac Avenue this weekend, and love the size, layout, and location of the place. What we’re concerned about is the renovation. It’s currently listed at $559K but hear that the reno job they do is not good, and not done with pride. But we love the location. We’re almost wondering if it’s worth a chance to offer lower, and then bring in our own contractor to fix the reno job.

Dear S:

I know that block well. Coincidentally, my sister lives on the same street with her family.

First off, you will be hard pressed to find a 3 bedroom on Capitol Hill under $500k, and most of the homes you’re referring to are in the $600k range.

I think that if you liked the location, and the general layout of this home, that you should have moved swiftly with an offer.  This home sold pretty quickly, as do most homes in the city at this price.

I tour about 10 to 15 houses every Sunday for The Cribline’s House Pick of the Week feature on my blog. I view homes from all over the city, and many homes on Capitol Hill.  In this price range, a newly renovated home, whether it’s a top notch job or not, usually goes pretty quickly. Under- bidding really isn’t an option in this market with such low inventory and homes in high demand. Remember, Washington is one of the hottest markets in the country, if not the hottest market.  I’m actually finding many homes getting multiple offers and often sell at a higher amount that the listing price, and in some cases these offers have few contingencies. There are also many out there who are buying homes with cash offers with no contingencies or an inspection making bidding even more competitive.

Here’s one tip that may allay some concern. Once an offer is submitted, the lender requires an inspection of the property. That is your protection should the inspector find anything major wrong with the home (that’s their job).  If there is something major, or several things wrong, you can either pull your offer or negotiate down on the price.

So, if you find a home that you really like in a location you really like, I suggest you jump on it.  And, that also means having a realtor selected who can draft up an offer, and a pre-approval letter from a lender if you don’t have one already.

I hope this is helpful.  Eric

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Ask Eric: Where Do You Get Your Estimates of Potential Rental Income

February 17, 2012 By Leave a Comment

Hi Eric — as a prospective buyer I’ve really enjoyed following the House of the Week that you do for The Cribline.  I have two questions that I’d love to see answered as an “Ask the Cribline.”

1) Where do you get your estimates of potential rental income? Some of them seem high to me, for example, would people really pay $1,700/mo. for a Capitol Hill/H Street basement?

2) If I want to be completely on board with renting a basement unit out of my primary residence (say I’m planning on getting a serious FBI background check for a political appointment), what are my legal obligations?  Would love to see a post on how to have a completely legal basement rental, from leases, to rental income tax reporting, to what changes I’d have to make if I buy a second home and rent that first one out completely?

 

Dear Jay,

As you may know from reading my Pick of the Week, I tour the city just about every weekend and that helps me keep a pulse on home and rental prices.

Additionally, I recently rented my one-bedroom basement apartment on Capitol Hill for $1,875/mo. It is about 800 square feet, offers high ceilings, a washer/dryer, dishwasher, garbage disposal and alarm system, is modern and well lit.

When it is vacant, I go to Craigslist to see what is on the market and I look for what similar units are renting for at that time. Then it’s a matter of listing it myself (using Craigslist) with what I believe is a fair price. I have always wound up getting a lot of interest.

It really is a matter of estimating a fair market price and what the market will bear. There is no particular science. Lately there seems to be more demand than supply which usually means higher rents.

The answer to your second question is going to take some time… I will try to get to that soon.

Thanks for reading!  Eric

I, Thecribline.com, and The Cribline, LLC bear no responsibility nor will be held liable for the content of comments posted on this Web site by its users or in response to questions submitted to the website.

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Ask Eric: The risks that come with being a landlord

October 13, 2011 By Leave a Comment

The below was a response to an earlier submission to Ask Eric regarding selling or renting out a property (http://thecribline.com/2011/09/ask-the-cribline-should-i-sell-or-rent-my-place/)

Great blog … but to be a bit of a contrarian, there’s little discussion of risk here [regarding renting a property]. So based on my experience as the son of a long-time landlord, and a property owner myself, I’m going to put my .02 in just as something to consider:

– Borrowing always entails risks. What if you lose your job? It does happen. You’ll have two mortgages and what if you lose a tenant at that time too? Any time you have a mortgage, you have risk. On a personal property, with a significant down payment (not no money down) that risk is reduced.

– You are going to be an absentee landlord. Yes, if you pick a great property manager, things should generally be fine. But things can still go wrong — the tenant decides to rebuild his Harley engine in the living room — and you will be out of town and unable to meet in person with anyone to help fix the problem.

– Over the past year, DC home prices have appreciated less than 2 percent, according to this: http://www.zillow.com/local-info/DC-Washington-home-value/r_41568/. My experience on my own home in a nice suburb backs this data up, though clearly there are areas in town that are hotter. Over time, that may indeed rise to an average of 5 percent-to 6-percent over time, just as the S&P 500 may go down year-to-year, but over time is likely to appreciate.

I’m not trying to rain on parades here, but just offering some other views. I think real estate is a great investment and my father paid for my college because he did so. It is, however, not without risk, and that risk is increased the more leveraged you are.
Gary Karr

Dear Gary,

You are absolutely right about the risks. And while I didn’t address the risks in my earlier post, I appreciate your raising the issue so that I can address it now.

I think there are many factors that need to be considered before renting out a property. On the top of the list from my perspective is having a property located in a healthy rental market like Washington, DC, and in a key location (close to shopping, restaurants, METRO). These factors help to mitigate some of the risks that come with renting out a property.

Having rented several properties for more than 15 years, I also want to be clear that one has to follow the numbers to see if they make sense. In other words, can a property be rented out at a profit? And, if so, how much, and can you build an emergency fund with that profit?

I would not advise someone getting into a landlord arrangement unless there was a plan in place to deal with emergencies such as unexpected repairs, losing a tenant, or losing your job at the same time, as you described.

Risks figure into just about everything. The idea is to have a plan in place that will help you manage your risk.

As you also point out, the risks can be greater if you’re an absentee landlord. If that’s unavoidable, then you must do your homework and find a good property manager. There are several that I know of who have been around for decades and have a great reputation.

So far as your point about a 2 percent appreciation over the past year, I have never relied on home appreciation as the foundation of my business model to build wealth through real estate. However, it is one factor that I consider. I also consider the tax benefits of rental properties, and over the long-term (which is how I have always approached all of my investments) I’ll have a mortgage that was paid down (or paid off) by my tenants. That’s how I started, that’s where I stand now, and if I stick to this strategy, I believe my future looks bright.

Thank you for raising this point and I appreciate your keeping the dialogue going. My goal is to help people make as few mistakes as possible in this arena.

Eric

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Ask The Cribline: Should I Sell or Rent My Place?

September 13, 2011 By 3 Comments

Dear Cribline,

I am going to be moving out of Washington, D.C. soon. I want to know if I should sell my house or rent it out? I don’t really want to have to deal with having a place, but I also don’t want to be stupid about walking away from a good investment before it has made any money.

I don’t have numbers in front of me, but, essentially, I gather that I can charge enough rent to cover my mortgage payment but not to cover all of the other fees, e.g. mortgage insurance premium, condo fee, taxes, insurance. BUT if some of those other fees are tax deductions, then maybe I do come out ahead ??

I’ve only had the place for one year, so I’m not likely to make any money selling it yet. Would it be easier, though, to do so and just get it off my hands?

Thanks so much!

Cheers,
Tamara

Dear Tamara,

One of the reasons I am blogging today about real estate is because I have built up a real estate portfolio that allows me to live practically for free, while also creating a strong financial path for the future largely due to rental properties. With that said, I understand that not everyone is cut out for becoming a landlord.

Even though I don’t know anything about your specific property, I can provide some perspective. Consider the following scenario:

If, for example, you have a 2 bedroom, 2 bath property with a loan around $400,000, your mortgage payment is going to be around $2675/mo. including principle, interest, taxes and insurance (at an estimated 5% rate). And, if it’s a condo you must add that fee.

Keep in mind that you currently only pay about 2/3 of $2675 after your tax deductions. So, your net payment is estimated to be about $1875/mo. So renting your place anything above $1875 would be a profit. Now these are just estimates. To be clear, I am not an accountant and advise that you discuss the actual situation with yours, because there are numerous factors that can figure into the equation.

Now, let’s say you can get about $2400/mo. in rent, while it doesn’t actually cover the gross mortgage, taxes, and insurance, it more than covers your net payment.

Depending on how you chose to treat your rental when completing your tax return, you may deduct your mortgage interest and taxes, or you can depreciate the property (a real estate deduction that allows you to account for the wear and tear of the property over time on your annual tax return). This could give you an even bigger margin of profit.

And, don’t forget that rents usually rise, especially in the DC market. They have doubled over the past 10 years.

You should also be aware that if you rent out the property, you still have a tangible, and tax deductible, asset. Having this deduction also allows you to deduct numerous other things such as your charitable giving, misc. business expenses, etc… It usually takes having a mortgage deduction to make other expenses deductible over the standard tax deduction. Check out my blog about the benefits of having a mortgage that might be helpful to you.

Also a few other things to point out. If you do not want to manage your own property, you can hire a firm to do so. John C. Formant and Yarmouth are two examples of companies that provide that service.

Most companies take a commission of about 8 to 10 percent of the monthly rent.

You still pay for the upkeep of the property and any repairs, but rental companies, most often have a good network of professionals to help out.

If you decide to rent it yourself, many people find Craigslist to be very helpful.

Let’s also look at the asset itself and how over the long term, hanging on to it could be a good option.

Most properties, over the long term, appreciate about 5 to 6% a year. So, for a property worth about $400,000, that translates to about $20,000 (on the conservative side) a year. In 10 years, that’s $200,000. And, during that time you’ve reaped the benefit of a renter paying down your mortgage balance.

If you have a plan over the next 10 years to generate $200,000 from an investment, let us know. The Cribline readers might like to know more… Check out the performance of real estate over the past 10 years. DC was at the top of the list with a 9.4 percent increase according to Zillow.com.

Be clear, renting a property can be work, but based on over 15 years of personal experience, I have only gone one month without a tenant, and nearly all of them have been pleasant.

I also want to address that you’ve only had the property for a year. According to real estate research firm Clear Capital, Washington, D.C. led all other real estate markets in price appreciation, rising 5.3 percent. It is expected to lead the nation again next year with a 6.5 percent average appreciation.

If you sell now, you will likely have to pay the following fees: 6 percent realtor fee, 1.1 percent transfer tax, and about 1 percent in other fees.

On a $400,000 property for example that would be over $32,000 in fees. Considering the property’s appreciation last year was about 5 percent, then that amount would be about $20,000, leading to a loss of about $12,000.

I hope this is helpful, and good luck to you, Eric

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If you have a question on real estate, Ask The Cribline

August 26, 2011 By Leave a Comment

The latest questions to The Cribline: 

Dear Eric,

My housing questions are in the realm of short sales and foreclosures.  Even in an up swinging market in DC and Seattle, houses are still selling below their list values.  How much below the list price is a short sale property likely to sell for?  How much below the list price will a bank tend to accept on a foreclosed property? Is their a rule of thumb one can use when trying to assess what type of offer to place on such a property to ensure that an offer is likely to be accepted whilst still providing a ‘good deal’ for the buyer? Thanks, –SH

There are a lot of variables involved with short sales. I have seen houses with short-sales pending for over a year. And, I have heard the process can be quite difficult.  Take a look at this recent article from Bloomberg news. A couple highlights from the article: Pre-foreclosure homes took an average of 245 days to sell after receiving the initial foreclosure notice, down from 256 days in the first quarter. The average sale price was $192,129, a discount of 21 percent relative to non-distressed homes. Discounts averaged 17 percent in the first quarter and 14 percent a year earlier, according to RealtyTrac.

Dear Eric:

With home prices in DC steady and rising, many find it nearly impossible to afford the house of their dreams with the granite and stainless, powder room on the main level, master suite, decks and offstreet parking.  Do you consider it a worthwhile endeavor for an individual to buy a run-down property, gut it and do a complete renovation?  What would be the risks to look-out for if you chose that route? Mike

This question has come up a lot lately and for good reason. Like anything else there are advantages and disadvantages to taking on a gut job.  While I have not done one myself, I did observe the house I currently live be completely restored. I lived 2 houses away at the time, and I watched the process unfold over many months. 

My house is about 2600 square feet. It was stripped down to the bricks in the interior and had all new walls, plumbing, and electrical systems installed. The house was purchased for $140,000 about 13 years ago when the remodeling project began. The contractor painstakingly restored the home according to the highest historical standards. The finished product was a modern home with stainless steel appliances, granite counter tops and marble tiled bathrooms. The cost? About $200,000 to $250,000. Or, about $100 a square foot.

I consistently hear that people wind up spending double what they plan to spend on a home remodel.  With that in mind start working the numbers. It will depend on the price of the house you wish to gut is.  For a top of the line remodel, you could easily be looking at a cost of at least $150 to $200 a square foot. And, you would probably need to apply for a construction loan. There are numerous programs out there. The final factor is time. And, the time it takes to remodel a home can vary depending on the contractor. Also keep in mind you will have to go through the city to get permits, and that adds another unpredictable variable.

Take a look at this aricle: http://www.repair-home.com/resources/home-buying-101/buying-a-gut-job.html

Dear Eric:

Hi!  I live on the hill [address kept anonymous].  I bought my house for $515,000 in 2005.  Zillow.com kept indicating that my house was worth more and more.  At one point, zillow indicated that my house was worth $725,000.  Over the last year the value of my house has dropped down to $575,000.  My question is, what do you think of zillow.com?  Do you think it s accurate? CL

I like Zillow.com, Redfin, and Trulia and visit them regulatory. Have you checked the other sites?  I went to Trulia.com and here’s what it said:

“This is a Multi-Family Home located [in], Washington DC. [The unit] has 2 beds, 2 baths, and approximately 1,500 square feet. The property was built in 1890. The average list price for similar homes for sale is $567,775 and the average sales price for similar recently sold homes is $618,150. [This property] is in the Hill East neighborhood in Washington, DC. The average list price for Hill East is $637,222.”

I often remind people who are intersted in knowing the value of their home to use several tools: The City’s assessment which comes out once a year (and is usually on the low end of the value scale), online resources such as the sites listed above, and just keeping your eyes on the local market and what comparable houses are selling for. These strategies can help provide an estimate for the prices per square foot. And, currently, many houses in your price range and in your neighborhood are selling from about $375 to $450 a square foot. 

Dear Eric:

My hot water heater is dead.  Should I get a tankless hot water heater since I only have 825 square feet?  Or do they network well/last long?  C

I have heard mostly positive things about tankless water heaters. People I know who have them, love them. The main reason? In DC where space is often a critical factor, the tankless heaters are convenient.  For your 850 square feet of space, this makes sense. The cost can be higher, but there is energy savings. The decision shouldn’t just be made based on energy savings and cost according to a review by Consumer Reports.

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UPDATE ON “A Home is a Lousy Investment:”

July 19, 2011 By Leave a Comment

There are a couple new points, based on feedback from The Cribline readers, that we wanted to share on the post Poking Holes in WSJ Editorial “A Home Is a Lousy Investment” that add to our earlier arguments.

From 1980 and 1981 the U.S. had two of the highest periods of interest rates. At some points, the rates were over   20 %. For a medium property in California of $100,000, that would have cost an owner about $2000/mo.  That same $2,000 would cover the cost of about 4 times that much at rates around 4.5 % today.

Taxes would have been pretty low around $1200 a year on that property according to rough estimates, and after the mortgage tax deduction, the out of pocket expense would have been around $1500/mo.  By 1985 the rates went down to about half to 10%.  And, that same mortgage would have been paid down a bit, and the value a bit higher. The Cribline would have definately advised the original mortgage to be refinanced, and we estimate that the savings would have been about $800/month bringing the bottom line cost to $700 after the mortgage interest and property tax write offs.

Rates fluctuated a bit through the rest of the 80′s and in July of 1992, they dropped to 6%. The Cribline would have advised refinancing again. Now, 7 years after the first refinance, the principle would have dropped further to an estimate of around $60,000.  At 6 percent, $60,000 borrowed would total about $300/mo. And with taxes that would have likely increased over this period, the gross total would have been around $500/mo. After the tax deductions, the out of pocket would be about $350/mo.

In June 2003, the rates dropped again to 4%, one of the lowest rates in American history (Since 1956).  Now the mortgage would have been around $30,000 or probably less. Four percent of $30,000 would be about $100.00/mo. Add on property taxes and the gross payment would have been close to $300. Now, the net payment would have been just about $200/mo.

These refinances would have all been amiturized over 30 years and the above calculations are just estimates, but the goal is to provide some perspective on the amount of money that is being spent buying a home versus renting.

As, the initial post showed, the rent paid over the same 30 year period was estimated to be $420,000. Even if the mortgage was refinanced at 10% (for a 30 year fixed rate) after the first 5 years from the original 20% rate, the total net payment over 30 years would have only been about $250,000.  That’s $170,000 savings from the rent paid out.

We wonder what Mr. Bridges, in his editorial to The Wall Street Journal could have made in the stock market with $170,000?

Check out this site to find out more about medium home values. And, click here for a chart on interest rates from since 1947.

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