Question 10. Rent versus buy analysis - Part 2 Which is better to rent or to buy?

10. Rent versus buy analysis - Part 2 Which Is Better To Rent or To Buy? Tools The decision of whether to rent or buy housing is a personal decision that is based on both your lifestyle and your finances. While most financial experts argue that the financial aspect of the decision is important, it is also important not to base your rent-or-buy decision solely on the numbers Your personal needs and housing market conditions are important, However, it is still necessary to perform the financial analysis. Tips Megan and her husband are trying to decide whether to rent or to purchase a new condominium. After looking for several months, they've narrowed their choice down to one particular unit, and the builder is willing to lease or sel-depending upon the preference of the buyer Tips To perform a rent-or-buy analysis, Megan and her husband have collected the following information: ck . If they rent, the builder will require monthly rental payments of $1,100 and a security deposit equal to two months of rent. . Since they want to be protected against the possible loss of the possessions, they will purchase a renters' policy of $200 every six months, while a more comprehensive homeowners policy will cost 0.5% of the home's value per year. . Money used to fund the unit's security deposit could otherwise be invested to earn 3% per year after taxes. Funds expended for a home's down payment and closing costs also incur opportunity cost. . If the unit is purchased, it will cost $175,000 and will require a 20% down payment. The loan will carry an interest rate of 6%, a term of 30 years, and monthly payments of $839. The closing costs associated with the unit's mortgage will be $3.500. The property taxes and the maintenance and repair expenses on the unit are estimated to be 3% and 1 of the unit's total price, respectively . Your ordinary income isted at the rate of 28%, and you'll be willing to bemire your tax deductions in the event that you purchase Your new home Financial publications report that home values are expected to increase by this year due to ition Complete a rent-or-buy analysis worksheet to determine the total cost of renting and the total cost of purchasing Megan and her husband's prospective house and the recommend their best strategy. To complete the worksheet enter the appropriate values in their corresponding and round each value to the nearest whole dollar MacBook Air S M L LLL View Some account wrices will be available until you sign in again. Rogelio CENGAGE MINDTAP Chapter 5: Assignment X My Home Courses Complete a rent-ar-buy analysis worksheet to determine the total cost of renting and the total cost of purchasing Megan and her husband's prospective house and then recommend their best strategy. To complete the worksheet, enter the appropriate values in their corresponding blanks and round each value to the nearest whole dolar. A Catalog and Study Tools Partner Offers Amount 2 Rental Options College Success Tips Career Success Tips 8 D Help RENT-OR-BUY ANALYSIS FOR HOUSING COST OF RENTING Security deposit Anual rental cost Renter's Insurance Opportunity cost on security deposit Total Annual Cost of Renting COST OF BUYING Monthly mortgage payment Annual mortgage payments Property taxes Homeowner's insurance Maintenance expenses Opportunity cost of down payment and closing costs Give Feedback Les Reduction of loan principal Tax Savings on mortgage interest deduction Tax Saving property tax deduction To deduction mulher cost of homeowners tutmadan opreciation in home value Total Annual Cost of Purchasing MacBook Air & Annual after-tax cost of homeownership Estimated annual appreciation in home value Total Annual Cost of Purchasing: Based on this analysis, Megan and her husband should: Purchase the home, as the total cost of purchasing is less than the cost of renting Rent the home, as its total cost is less than the total cost of purchasing Purchase the home, as the cost of purchasing is greater than the cost of renting Grade It Now Save & Continue Continue without saving MacBook Air ODO 20 Goe EA FS FJ * A & 7 8 9 9 % 5 $ 4 # 3 6 2 10. Rent versus buy analysis - Part 2 Which Is Better To Rent or To Buy? Tools The decision of whether to rent or buy housing is a personal decision that is based on both your lifestyle and your finances. While most financial experts argue that the financial aspect of the decision is important, it is also important not to base your rent-or-buy decision solely on the numbers Your personal needs and housing market conditions are important, However, it is still necessary to perform the financial analysis. Tips Megan and her husband are trying to decide whether to rent or to purchase a new condominium. After looking for several months, they've narrowed their choice down to one particular unit, and the builder is willing to lease or sel-depending upon the preference of the buyer Tips To perform a rent-or-buy analysis, Megan and her husband have collected the following information: ck . If they rent, the builder will require monthly rental payments of $1,100 and a security deposit equal to two months of rent. . Since they want to be protected against the possible loss of the possessions, they will purchase a renters' policy of $200 every six months, while a more comprehensive homeowners policy will cost 0.5% of the home's value per year. . Money used to fund the unit's security deposit could otherwise be invested to earn 3% per year after taxes. Funds expended for a home's down payment and closing costs also incur opportunity cost. . If the unit is purchased, it will cost $175,000 and will require a 20% down payment. The loan will carry an interest rate of 6%, a term of 30 years, and monthly payments of $839. The closing costs associated with the unit's mortgage will be $3.500. The property taxes and the maintenance and repair expenses on the unit are estimated to be 3% and 1 of the unit's total price, respectively . Your ordinary income isted at the rate of 28%, and you'll be willing to bemire your tax deductions in the event that you purchase Your new home Financial publications report that home values are expected to increase by this year due to ition Complete a rent-or-buy analysis worksheet to determine the total cost of renting and the total cost of purchasing Megan and her husband's prospective house and the recommend their best strategy. To complete the worksheet enter the appropriate values in their corresponding and round each value to the nearest whole dollar MacBook Air S M L LLL View Some account wrices will be available until you sign in again. Rogelio CENGAGE MINDTAP Chapter 5: Assignment X My Home Courses Complete a rent-ar-buy analysis worksheet to determine the total cost of renting and the total cost of purchasing Megan and her husband's prospective house and then recommend their best strategy. To complete the worksheet, enter the appropriate values in their corresponding blanks and round each value to the nearest whole dolar. A Catalog and Study Tools Partner Offers Amount 2 Rental Options College Success Tips Career Success Tips 8 D Help RENT-OR-BUY ANALYSIS FOR HOUSING COST OF RENTING Security deposit Anual rental cost Renter's Insurance Opportunity cost on security deposit Total Annual Cost of Renting COST OF BUYING Monthly mortgage payment Annual mortgage payments Property taxes Homeowner's insurance Maintenance expenses Opportunity cost of down payment and closing costs Give Feedback Les Reduction of loan principal Tax Savings on mortgage interest deduction Tax Saving property tax deduction To deduction mulher cost of homeowners tutmadan opreciation in home value Total Annual Cost of Purchasing MacBook Air & Annual after-tax cost of homeownership Estimated annual appreciation in home value Total Annual Cost of Purchasing: Based on this analysis, Megan and her husband should: Purchase the home, as the total cost of purchasing is less than the cost of renting Rent the home, as its total cost is less than the total cost of purchasing Purchase the home, as the cost of purchasing is greater than the cost of renting Grade It Now Save & Continue Continue without saving MacBook Air ODO 20 Goe EA FS FJ * A & 7 8 9 9 % 5 $ 4 # 3 6 2