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OT: make it make sense

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anon1758050382

All-American
Oct 6, 2022
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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.
 
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anon1758050382

All-American
Oct 6, 2022
4,548
6,808
113
Shmuley said:
So you assume the rental rate will remain static over the term of the would-be mortgage loan?
Click to expand...
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.
 
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anon1758050382

All-American
Oct 6, 2022
4,548
6,808
113
Called3rdstrikedawg said:
Where can you find an $800k home to rent for $2650 a month? The note on that home with 20% down is $5287
Click to expand...
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.
 
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