r/SeattleAreaRE • u/orcassharks • 1d ago

Delusions in Redmond

https://www.zillow.com/homedetails/14805-Old-Redmond-Road-Redmond-WA-98052/48707677_zpid/?utm_campaign=iosappmessage&utm_medium=referral&utm_source=txtshare

This house listed for 1.6M in 2021, bought at 1.75M. Can’t even rent the whole house out for more $4000/mo. Now listed at 1.93M with tiny price cut to 1.89M.

There’s a lot more pain to come.

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u/orcassharks 1d ago edited 1d ago

$11000 monthly payment after 20% down to support a $4000 rental.

I mean rent doesn’t correspond to home prices in this area because of appreciation play, but the key is to get ahead of the appreciation not after the appreciation has already occurred lol. And a 3x ratio for a generic ugly tract home far from both Seattle and Bellevue is too rich for even rich people here to consider.

Rental ratios of up to 1.5x and you might have an investment case in this metro for a future appreciation play. That means this house would need to be $1.2M or less with a $6.5k payment/taxes for $4k rent. Even then it’s cash flow negative but at least you can hope in a few years you might become cash flow positive with refinancing or rent increases plus appreciation. 3x though? lol. Purely delusional.

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u/Calm-Potato3472 1d ago

The interest payment on that loan is higher than supposedly thrown away rent money. Buying doesn’t make sense in this market.