Irvine Housing Blog

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Buy or rent at Kelsey Lane in Oak Creek Posted: 28 Feb 2012 04:00 AM PST 31 Kelsey is a 4 bedroom, 2.5ba detached home in the Kelsey Lane tract in Oak Creek. Kelsey Lane is a tract in the southern most part of Oak Creek and is bounded by the 405, Sand Canyon Ave, Alton Parkway, and Valley Oak.  Click the picture below for a closer view. There are 3 main floor plans in Kelsey Lane: Plan 1: 3 bedrooms / 2.5 baths / 1653 square feet Plan 2: 3-4 bedrooms / 2.5-3.5 baths / 1910-2379 square feet Plan 3: 4-5 bedrooms / 2.5-3.5 baths / 2079-2546 square feet Plans 2 and 3 have a third floor option which explains the extra bed/bath/space. In addition to 31 Kelsey, there are a couple of Plan 3s that have not quite closed: - 82 Millbrook is bank owned, listed at $659,000, and the status is Hold Do Not Show.  They are accepting offers and will submit offers to the bank on 3/5/12. - 104 Millbrook is a short sale listed at $600,000 and the status is Backup Offers Accepted. I didn't come across any Plan 3s that had closed recently.  The closest I could find in the tract is a Plan 2x (3rd floor model) - 66 Ivywood which sold for $749,000 on 2/7/2012. 31 Kelsey is listed at $699-$739k.  For the analysis below, I'll use a purchase price of $675k. Purchase Price $675,000     Closing costs $20,250 3%   Total price $695,250             Down payment $155,250 20%           Loan Amount / Percentage Of Price $540,000 80%   Interest Rate / Period (months) 4.25% 360             Monthly Yearly   Mortgage Payment $2,656 $31,878   Interest Component $1,913 $22,950           Property Tax $582 $6,978 1.03% Special Assessments $247 $2,969 0.44% Effective Tax rate     1.47%         Insurance $50 $600   HOA 1 $59 $708   HOA 2 $79 $948           Cash Out $3,673 $44,081   There are some possible adjustments that may apply to your situation.  Be sure to also consider how long you may own the property (average is around 6 years), what kind of financing you actually qualify for, how much you put down, the effect of giving up the standard deduction, potential price declines, costs to sell the property, etc.  The NY Times Buy or Rent calculator is a great tool that helps with some of these.   Possible Adjustments       Interest paid   $22,950   Property tax   $6,978   Total deductible   $29,928   Tax benefit $624 $7,482 25%         Opportunity cost of down payment -$259 -$3,105 2%         Principal paid in mortgage payment $744 -$8,928   As far as rents, I found a couple Plan 3x models (third story option) that leased for $3300 (52 Kelsey on 11/3/2011) and $3250 (35 Pembroke on 9/3/2011).  I also found several Plan 2 models that leased between $2700-$3195.  I'd guess 31 Kelsey might fetch a rent of $3100/month.   So, would you buy 31 Kelsey for $675k or rent it for $3100/month? Discuss below or at Talk Irvine.

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