30 Danbury Lane is a 3bd/2.5ba 1,357 sq. ft. detached condo in the Cobblestone tract in the village of Oak Creek. Cobblestone is located at the corner of Jeffrey and Alton. There is one main street that forms a loop inside the tract and depending on where the home is in the loop, the street could be named Danbury, Cherrybrook, or Lantern Lane.

Cobblestone has 3 main floorplans:

• Plan 1 – 2 Bed / 2.5 Bath 1127 square feet
• Plan 2 – 3 Bed / 2.5 Bath 1340-1357 square feet
• Plan 3 – 3 Bed / 2.5 Bath 1490 square feet

30 Danbury is a Plan 2. I did a quick search and the only Plan 2 sale I was able to find in the last year was 68 Danbury which closed on 11/17/2011 for $475,000. A Plan 3, 110 Danbury, closed at $492k on 12/27/11 so I'm going to use $475k as the purchase price for the analysis.

Here's what the numbers might look like if purchased by someone with excellent credit and 20% down:

Purchase Price	$475,000
Closing costs	$14,250	3%
Total price	$489,250
Down payment	$109,250	20%
Loan Amount / Percentage Of Price	$380,000	80%
Interest Rate / Period (months)	4.00%	360
	Monthly	Yearly
Mortgage Payment	$1,814	$21,770
Interest Component	$1,267	$15,200
Property Tax	$409	$4,911	1.03%
Special Assessments	$158	$1,896	0.40%
Effective Tax rate			1.43%
Insurance	$50	$600
HOA 1	$60	$720
HOA 2	$79	$948
Cash Out	$2,570	$30,844

From the last buy/rent post, a few people commented and emailed on the adjustments I listed and that some, like the tax deduction, might not be accurate because you need to account for the standard deduction. And that others, like paying down principal, would be more than negated if the property goes down in value (like it has over the past several years). Also, when considering whether to buy/rent, it is important to take into account the costs to sell the property. Many people do not live in or own their homes for more than 10 years. Does anyone have statistics on what the average is? In any case, I can't imagine someone living in one of these detached condos for 30 years. But on the flip side, I could see someone living here and then moving to a larger home and renting this one out. Although these adjustments may not apply to everyone or in all cases, I think there is still value in looking at what they are. When I get some more time, I'd like to see what impact they would have on my situation.

Possible Adjustments

Interest paid		$15,200
Property tax		$4,911
Total deductible		$20,111
Tax benefit	$419	$5,028	25%
Opportunity cost of down payment	-$182	-$2,185	2%
Principal paid in mortgage payment	$548	-$6,570

One of our readers wrote in and suggested to add a Repairs expense for purchasing. Any other ideas on what else to include/exclude?

As far as what these Plan 2s rent for, 68 Danbury, the sales comp from November seems to have been purchased by an investor (looks like an all cash purchase from what I can tell) and it was listed as a rental 2 weeks after being bought. The asking rent is $2650/month. Another Plan 2 rental came on the market just 6 days ago and is also asking $2650/month: 214 Lantern.

The closed Plan 2 leases are 178 Cherrybrook for $2550/month on 9/18/2011 and 165 Cherrybrook for $2550/month on 8/27/2011.

Based on this info, would you buy 30 Danbury for $475k or rent it for $2550/month?