Friday, June 23, 2006

Overgrown San Anselmo Cottage

Original 1913 cottage, rare opportunity for creative buyer to remodel or build your dream home...[realtor BS]...Strictly as-is sale.
Yup, all original vintage 1913 cottage, 2 br 1 ba, 1173 sq ft located in San Anselmo. Asking $719,000.

1 Comments:

Blogger marin_explorer said...

Personally, I find $720K a lot for .17 acres of land, because who's seriously going to live in a PoS like this for any length of time? I think the appeal of these cottages is in flipping, because it can't possibly break even as a rental. With I-O rates around 6%, that's $4400/mo w/taxes (minus your deductions of course). Only wild appreciation will cover your short-term “investment” costs. Somehow that doesn’t work for me.

Of course, if you plan to live there, you’ll probably want to scrape and rebuild. If you’re there long-term, and opt for a 30-yr fixed (around 6.7% now), you’re looking at $4600/mo (minus deductions) for the land.

Then let’s say you build a 3000 sqft home of decent quality for $250/sqft. That’s another $750K+, which at 30 year fixed (6.7%) is around $4800/mo with limited deductions. So even with deductions, PITI could easily be $9500/mo. Going by a debt-to-income ratio of 30%, that means you need to earn $380K per year to support this home. I’m sure there are other costs too. Any way you cut it, that’s an awful lot of income (and financial pressure) to live in that neighborhood. There are far better uses for that money.

June 24, 2006 12:53 PM  

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