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That's less than 2% annual appreciation after deducting the 6% sales commission. Not exactly a stellar ROI, but at least they're not losing money.

Wonder how much the rent is and whether it would cover the mortgage?

bordering the tenderloin......$1M for a 2bdroom.....no thank you

well, it was purchased at the peak of the market. and yet they still expect a profit. is this roi term i see a lot, written in stone?

is the ROI written in stone? no, but obviously it looks like they are trying not to lose money, at least on paper.

No way would the rent cover the mortgage plus taxes plus the $828 HOA dues (unless the owner put a huge amount down, in which case renting rather than selling still ties up money that could be earning returns elsewhere). This looks like one of those cases where the owner would be smart to recognize that he paid too much, cut his losses, and list at a realistic price rather than increasing his losses each day he holds on to it.

It's listed here on Craigslist for $4500 per month.

That's 4.9% of the sales price. Does anyone know what the market rental yield is?

[Editor’s Note: And that's a Cap rate of around 3%.]

no one is going to pay that rent either. I don't think they will be able to get over $3000 per month for this.

methinks the palmy springs market has at least as much potential on the downside as s.f. intrepid speculator/apt owner has gone from the frying pan into the fire. time will tell.

Of course someone will pay more than $3000 per month-- have you been looking at Craigslist rents? Someone rented the 2-bed across the street from us in the lower haight two months ago for $3250.

I have to say, rents are up pretty steeply in the last two years as prices have been relatively flat. It's a long way from converging still, but I expect that the market will not just balance through lower housing prices, it seems like rents will continue to climb relatively quickly as well.

2 bedrooms. With 2 people, that's 2250/each. Do-able. I think this economic boom is getting a bit long in the tooth. This should affect housing prices. S.F. has always had high rental prices, I doubt this building boom will change that a whole lot. I'm assuming the renters still have jobs. I'm more than slightly concerned about the owner and his multiple, high priced dwellings.

There's no indication it was the current owner, but this unit has undergone pretty significant renovation. I looked at another unit in the building and was shocked at the cabinets and layouts in both kitchen and bathroom. Somebody put in a lot of money to fix that. The common areas are another matter....