I noticed a condo for rent today in Del Mar near the beach. It caught my eye because the place had been for sale for a year before finally selling in April.
The buyers paid $2.55 million for it. Now they are trying to rent it for $6500.
Zoinks. A 6.5% mortgage on that will run you over $16,000 a month. Property taxes are more than $2300 a month. Add a few hundred more for insurance, maintenance, and/or HOA, and the cost of carry is around $19,000 a month. So even if these people find tenants in this market at $6500 a month, they are paying $12,500 a month for the privilege of being landlords.
I hope they had a great summer in that place, because they're going to be paying for it for a while!
CORRECTION: These are two different condos on the same block. Same story though, except the rent price is now $25,000 per month!