Value of investment twin home

I see the twin home my daughter rents sold on 2016 for $284k. It is now for sale at $425k.

Interest rates were 3% when house was bought. Now they are 6%.

So interest or opportunity costs were a bit under $9k in 2016. Now 6% of $425k or $25,500.

So this cost has nearly trippled. Rent hasn’t trippled. It has gone up about 10%. Sure, a new buyer could raise it further, certainly not triple lol. It is pretty dumpy.

How is it possible the value went up that much?

The realtor said value isn’t based on income and interest cost, just on comparable.

Why would an investor now buy this at triple the cost?

I was looking at buying it for her so she doesn’t need to move. But I can’t justify this cost as making sense. Maybe sfh can have this increase, but hiw can a low quality rental have this cost increase when there is no way rents can justify it?

Also nearby towns have implemented 3% annual rent control.

submitted by /u/OkResult6550
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I see the twin home my daughter rents sold on 2016 for $284k. It is now for sale at $425k. Interest rates were 3% when house was bought. Now they are 6%. So interest or opportunity costs were a bit under $9k in 2016. Now 6% of $425k or $25,500. So this cost has nearly trippled. Rent hasn’t trippled. It has gone up about 10%. Sure, a new buyer could raise it further, certainly not triple lol. It is pretty dumpy. How is it possible the value went up that much? The realtor said value isn’t based on income and interest cost, just on comparable. Why would an investor now buy this at triple the cost? I was looking at buying it for her so she doesn’t need to move. But I can’t justify this cost as making sense. Maybe sfh can have this increase, but hiw can a low quality rental have this cost increase when there is no way rents can justify it? Also nearby towns have implemented 3% annual rent control. submitted by /u/OkResult6550 [link] [comments]

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