Monica and her husband Richard continue to worry about their financial future. They began to question their investment in a home. They asked whether they would be better to sell their home now and invest the proceeds. They estimated that the marketable securities would provide a return of 5 percent after taxes. Monica and Richard thought the current value of their house would be $300,000 and would increase by 6 percent a year. A rental in a comparable apartment would cost $2,200 a month. Assume that Monica and Richards marginal tax bracket is 30 percent and that they have the following expenses:

Annual maintenance: $3,000

Property taxes: $5,000

Insurance: $1,500

Calculate the projected return on the house for the next year and give your recommendation.