No. of Recommendations: 3
GusSmed writes.

What's the minimum cost of a house in the cheapest regions? Not counting inner-city crime zones, of course. $50,000, perhaps.

What's the minimum cost of an apartment? $300 a month maybe. That's about $3,600 a year, which requires $90,000 using the 4% rule, so a really cheap house gives us a lower total.

Don't forget that the $50,000 home will include costs for property taxes, insurance and maintenace beyond the purchase price that are included in a renter's monthly lease payment.

For example. I pay $535/month for a Houston apartment with swimming pools and tennis courts. Condos of similiar size in the neighborhood go for about $60,000, but property taxes, homeowner's association fees and maintenance inside the unit would run about $330/month. If I bought a condo, I'd only reduce my housing expenses by about $200 month -- $2400 per year. That's less than the $3,000 per year I'd get in interest on the $60,000 in a 5% CD.

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