Question
A couple plans to purchase a home for $250 000. Property taxes are expected to be $1900 per year while insurance premiuns are estimated to
A couple plans to purchase a home for $250 000. Property taxes are expected to be $1900 per year while insurance premiuns are estimated to be $700 per year. Annual repair and maintanance is expected at $1400. an alternative is to rent a house of about the same size for $1500 per month ( approximate using $18000 per year) payments. if a 8.0% return before-tais the couple s minimum rate of return , what must the resale value be 10 years from today for the cost of owerneship to equal the equivalent cost of renting? Finally, given the breakdown year 10 sale value just asked for, what is the corresponding annual price escalation or de-escalation in the house over the ten years?
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