Why should the mortgage interest rate have a close relationship to the cost of renting a property?

The mortgage interest rate ha nothing to do with the rent a landlord would charge a tenant for rent.

Rent is based on the market value of rent being paid in the same area for a similar rental unit.

There are some rental properties that have no mortgage at all and are free and clear. In tnis situation the rent could not be tied to the interest rate as there is no mortgage.

In some cases a new landlord might be starting out in rental investments. This new investor might be required to pay some of the expenses out of pocket.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

The rent a landlord can charge depends on market rates where the property is located, not the landlord's carrying cost. Think about it, if the two were linked together, a landlord who had no mortgage on a property would be unable to charge rent.

But for tax reasons it is often a good idea to have enough mortgage interest to offset the rental income.

the investor might be looking at which would benefit him more, renting or investing in something else

when he is buying a house as a rental investment the mortgage interest rate will weigh heavily on his decision because he needs to know how profitable the rental is going to be for him

When interest rates rise, home ownership becomes more expensive and more difficult to enter into for the first time buyer. Historically this has caused a demand for rentals to increase and with supply/demand economics, rents would increase with this higher demand.

It doesn't. Local rental markets determine the "cost of renting."

the rate that you pay in interest determines the amount your loan payment will be. Higher rate, higher payment. Higher payment would require a higher rent income to cover the payment.

Interesting question. Kind of like why rent when you can own. Get it?

Because the rate affects the LL's costs, and thus affects what he needs to make to recoup them.

because the person that owns the apartment has to pay a mortgage.

you mean 4% rate to rent something for 1500 a month....stupid yahoo moron