[stana]

"If I move out, and I rent out my home, it covers monthly payments approximately exactly."

You cannot borrow for rent, so rents follow income growth more closely. So in some expensive real estate markets, if no income growth, rent might not cover your mortgage repayments.

[matt-attack]

This is very true. I have pretty expensive home that I rent out which is in a pretty affluent area. The rent is insanely low relative to the supposed value of the house (3% cap rate).

You make s great point as to the reason for this. Rental rates are completely detached from current interest rates.

[neltnerb]

Although true, for sure, when considering cash flow -- it's a fairly big upside that at the end despite having tenants pay most of the principal you end up owning it. Extra risk, etc, but housing prices falling is exactly the risk you're going into with wide eyes open so it's just a gamble.

But at the end, there's a decent shot you have full ownership of a house worth even more than you paid, and even if it loses most of its value you still own a place you can live in perpetuity paying only maintenance and property taxes. The renters don't get that, so it does kind of seem fair if they do not, in fact, cover your mortgage for you.

[woofie11]

Let's say mortgage repayment is $3000, and rent only covers $2500. Let's add another $500 in overhead. I'm paying $12k per year. $36k would break me financially, but $12k is a good investment, since at the same time, two things are happening:

1) I am one year closer to owning the home. Yay!

2) Inflation. Rents next year might be lower, but rents in 10 years will be higher.