Here's another downtown condo that has a serious negative cash flow problem. Purchased for $810,000 on 4/15/2005 it's now for rent for $2,750 with owner paid electric bills. The rental listing also talks about $30,000 in owner upgrades - the pictures show a nice unit, no question on that.
Let's run some numbers on this, for this analysis I'll assume that the $840,000 "rents" for 4.35%, the same rate that you can get from ING Direct with and Orange Savings Account.
$840,000 @ 4.35% = $3,045 monthly
HOA is $395 monthly
Assume property tax of $200 montly
Total Monthly Cost: $3640
Rent $2,750 - 200 agency fee = $2,550
The unit is losing $1,100 per month.
To make matters more painful La Vita #1802 which has a superior bay view just sold for $725,000. La Vita #1802 unit was also featured on this blog. These units are virtually identical and make great comps. Assuming an identical sales price for this unit and standard 6% selling expenses the loss is a painful $158,500
Rental Listing: view
Purchase Details: view