...There are two options that one can choose from when considering a home. One can either rent or buy. It is important to carry out a thorough investigation on each of the options and make an informed decision. The decision of buying or renting any asset is crucial and should be critically analyzed. Therefore, it is important for one to take into account the benefits and costs involved in each option before deciding on the one to take. One might choose to use a buy vs rent comparison tool such as the mortgage calculator that can be provided by a lender or real estate broker. The Rent versus Buy Comparator allows the user to compare their estimated financial position after 7 years of renting with their estimated financial position after 7 years of home loan repayments (Realtor.com, n.d.). This tool will allow the buyer or renter to compare the possible financial cost and assists in making the decision whether to buy or rent. Moreover, most finance calculators will take into consideration the rent, rent insurance, expect inflation rate, price of home, down payment, all fees associated with buying. Moreover, the financial calculator will include any home owner’s fees, annual property tax rate, realtor commission rate, and number of years expected to stay at the property. Depending on which area of the country the person or persons are looking at, will eventually determine the amount of rent or mortgage they...
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...(not being a person of India origin), comes to India, for the first time in last 30 years on April 15, 2005. During the F.Y. 2010-11, 2011- 12, 2012-13, 2013-14 and 2014-15 he is in India for 130 days, 80 days, 13 days, 210 days, and 75 days. Determine his residential status for A.Y. 2015-16. 5. Mr. P was born in Lahore in 1946. He has been staying in England since 1970. He came to visit India on 03.10.2014 and returns on 30.3.2015. Determine his residential status for A.Y.2014-15. SCOPE OF TOTAL INCOME 1. The following are the particulars of income of Mr. X for the previous year 2014-15 | |Rs. | |Rent from a Property in Delhi received in USA...
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...July 2014 * Financial Stability Department ** Economic Research Department Reserve Bank of Australia Thanks to Tom Cusbert, Luci Ellis, Richard Finlay, Alex Heath, Jonathan Kearns, Christopher Kent, David Lancaster, Tony Richards, Nigel Stapledon, Iqbal Syed, Chris Stewart and Marc-Oliver Thurner for helpful comments and discussions. We would like to acknowledge earlier RBA research by Robert Johnson. Views in this paper are those of the authors and not necessarily those of the Reserve Bank of Australia. Authors: foxr and tulipp at domain rba.gov.au Media Office: rbainfo@rba.gov.au Abstract This paper examines whether it costs more to own a home or to rent. We argue this is a useful criterion for assessing housing overvaluation. We use a new Australian dataset, which includes prices and rents for matched properties, letting us value housing in levels. We find that if...
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...Two bedroom house Date Listed 17/09/2011 Last Edited 17/09/2011 Price R 4,000 Location Cape Town / Western Cape Northern Suburbs For Rent By Owner Available 01/10/2011 Bedrooms (#) 2 bedrooms Dwelling Type House Bathrooms (#) 1 bathroom ------------------------------------------------- Two bedroom house main b/room built in cupboards,open plan kitchen,close to public transport,safe parking,elect.&water incl.Ruyterwacht Goodwood. Cont.0786840274 LARGE 3 BED HOUSE TO RENT IN PAROW WEST AVAILABLE 1ST OCTOBER Date Listed 19/09/2011 Price R 4,900 Address Sarel Cilliers St, Cape Town 7500, South Africa For Rent By Agency Available 01/10/2011 Bedrooms (#) 3 bedrooms Dwelling Type House Bathrooms (#) 1 bathroom Parking Covered Large 3 Bed House to rent in Parow West.ONLY the Main Bedroom has built in cuboards.Wooden Floors In Bedrooms and lounge. Large Kitchen with free standing oven,extractor.Lots and Lots of Built in cuboards. Open Plan Kitchen Dining room area. Large Lounge. 1 Bathroom with shower and bath and a seperate toilet. Linen cuboard Swimming Pool & Front and back Garden Water excluded Electricity Prepaid Please note credit checks are done so please don`t apply if you are blacklisted. RENT IS R4900 DEPOSIT IS R4900 AND ADMIN FEE IS For 1 person is R500 - applying for admin For 2 people it's R700- applying for admin ------------------------------------------------- PLEASE NOTE YOU ARE NOT ALONE ON THE PROPERTY...
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...Rent control effects to the market “Rent control is the second effectively way to destroy a city than booming it” says an expert in economy. Information shows that rent control is policy presents by the government using to reduce stress of rental to people who has economic problem by limiting rental price. However, vary effects coming up while the policy executing. The purpose of this report shall evaluate effects of rent control by short term and long term though the theory. 1.1 As can be seen from the diagram 1.1, we can see the theoretically supply & demand relationship to the market. Assuming the graph below shows the status of the market before rent control; mass tenants are satisfying by suppliers, namely, proprietors. It has both advantage and disadvantages: people are spending price a slice bit higher than the equilibrium point; the market remains stable but the problem of virtual-high price makes trepidation. RENT CONTRL EFFECTS IN SHORT TERM 1.2 The diagram show that the assumed scenario of the market after rent control: The rental price has shifted to a lower position adjusted by the government. We do believe because of real property market lack of elasticity, because of the number of building cannot be changed in a short term, thus it won’t cause shortage. Plus, tenants couldn’t be sensitive enough to the price and it takes time to make people adjusting their residential. In conclusion, the supply and demand relationship...
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...shortage of homes after the First World War forced the Government to subsidise the first council house building programme. While the Labour Party supported general needs housing for all - the Conservatives only wanted to fill the gap created by the shortage of the war and hoped that the free market would soon pick up. Between the wars there were on-off bursts of council house building.The depression of the 1920s and 1930s led to a return to social housing as a "sanitary" policy and subsidies were only given to house people from slum clearance areas. Social housing became a welfare safety net again - until housing shortages after the Second World War - and tenant direct action - led to another building boom. Housing Policy 1915-1939 1915 Rent and Mortgage Restrictions Act: Set limits on private sector rents as a result of rent strikes 1919 Addison Act: Brings in government subsidies for council house building 1923 Chamberlain Act: No more subsidies for council house building just for private builders or building for sale 1923 Increase of Rent and Mortgage Interest: Ends rent controls on new private sector tenancies 1924 Wheatley Act: New Labour government gives higher subsidy for council house building with contribution from the rates 1930 Greenwood Act: Links council house building to slum clearance, with subsidies according to people rehoused, differential rents and new rent rebates 1933 Housing Act: Ended subsidies for general needs housing - council housing is just...
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...People Prefer to Rent Than to Buy a House Why a Lot of People Prefer to Rent Than to Buy a House Posted on July 12, 2010 Filed Under Foreclosures | Leave a Comment People prefer to rent than to buy a house. The number of people that are very much concern about owning a home hasn’t doubled up until now, this is primarily because so many people are suffering from financial hardships. A lot of real estate owner these days will tell you that it isn’t the right time to buy a house because a lot of people are suffering foreclosure trauma. This is also the same reason why there are people who prefer to rent a house than to buy one too. In so many instances, it will be best if you will know some good advices because there are so many situations that just don’t go coherent lately because of the financial crisis going on. It is best for you to know some of the most reliable reasons why a lot of people prefer to rent than to buy a house. Here are some of them: Interest rate –a lot of people know that they cannot pay for the houses they will acquire primarily because their credit standing won’t allow them to do that too. Having a secured loan is also a decent thing to do these days. A lot of times, your mortgage broker cannot give you the right type of package you need because they are not available. In this case, you need to delay the purchases you will make to be able to make sure that your money will be worthy. Remember that it is so hard to engage in a house buying knowing...
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...code too provides advantages to home ownership. The considerations for renting an apartment are the same to those of buying a house. Majority of people consider owning a house to be worthwhile the model, age and design of the house notwithstanding. The option to either buy a house or to rent an apartment depends on personal preferences. Unlike when buying a vehicle, buying a car takes a long process (p.129). (Bevan 2008. p.53) explains that home owner take added care to their homes than renters, they remain in their homes longer than those who have rented homes. He reports that research shows home owners to report a high self-esteem than renters. Other than psychological comfort owning a home can be an option of tapping into house equity when emergencies arise. All the advantages of ownership can be lost once the owner gets difficulty meeting mortgage payments. Bevan (2008) further indicates that sometimes it may last for an over a decade to own a home. He indicates that it is good to understand that once current position when planning to transact a home or rent an apartment. It is worthwhile to seek the advice of a mortgage broker or to a financial institution and get an approval for a mortgage. The question on renting an apartment or buying a home is probably one of the biggest decisions a person has to make. Some people would rather rent and...
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...RENT CAPS IN GCC Rent caps are basically price control imposed in housing by government rules and policies. When there is a huge demand for housing the rent used to increase considerably. The people could not afford this sudden increase in the price. Hence, there was government intervention in form of rules and regulations stating that rents could not be increased more than a certain amount/percentage. Rent caps are based on the argument that housing is inelastic i.e. increase in demand will not increase the supply in short period of time. When the demand for housing rises the rent used to increase without any constraints. So, the government introduced rent caps to regulate the increase in price of housing rents. Rent caps is still an ongoing debate as most economists think it as the second best way to destroy a city. They claim that due to rent caps there is low motivation for landlords to construct or maintain their housing. The landlords find themselves with low profit or even losses due this price control scheme. The tenants who are protected by this scheme are reluctant to leave their old buildings and use space wastefully. The landlords or owners who construct new buildings impose a higher rent than they would have in a free market. Economists also claim that if proper incentive to landlords are provided then supply would not be less in a long run of time. Thus, housing being inelastic is wrong assumption in the long run. The rent caps discourages...
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...This essay will critically discuss how price ceilings and floors could possibly lead to economic inefficiency causing surpluses or shortages in relation to graphs and the real world case study. Firstly, price ceilings and price floors are basic aspects of our economy. Government enacted laws used to prevent suppliers from establishing prices of resources higher than supposed to be are known as price ceilings. Price floors are minimum pricing rates that can be charged for a particular good or service. Price controls such as these two are used to maintain affordable lifestyles and to protect consumers from suffering from unfair inflation. But however, if not executed correctly, price controls become completely ineffective. In order for a price ceiling to be effective price ceilings must be set below the natural market equilibrium but this in return becomes a problem the outcome of that would result in either excess in demand or a shortage in supply (Taylor 2006). Producers will not produce as much at a lower pricing rate, while consumers will continue to demand more because of the good being made more affordable; demand will exceed the supply. But still if the demand curve is relatively elastic then the net effect to consumer surplus will be positive. Producers are definitely harmed, as their surplus is doubly hit with a reduction in the number of firms that are willing to take the lower pricing rates. Resulting shortages of goods or services can lead to consumers having to line...
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...Running head: PURCHASING A HOUSE RISK PAPER Purchasing a House Risk Paper Keller Graduate School of Management Project Risk Management PROJ 595 Dr. Susan Orr August 04, 2013 Purchasing a House Risk Paper INTRODUCTION The many advantages to owning a home have been well publicized. However, the above satistics make it clear that owning a home is not without risk. To form a complete picture, you, the prospective buyer, need to consider the potential risks and disadvantages of home ownership as well. Understanding these disadvantages beforehand will give you a better chance of minimizing their impact and avoiding the fate suffered by these homeowners. RISKS IDENTIFICATION There are many risks in buying a new house such as: • The opportunity cost of investing in an alternative investment is very high because the entire cash and future income stream is tied up into one asset a home, which may or may not appreciate. • The house is an undiversified investment, so if the market tanks as it has, game over. • Knowing that we do not own our home, the bank does. • A lot of cost connected to home ownership, such as repairs and insurance and fees and potential hazards I have not considered. • If I lose my job, game over, this will put a lot of stress on me. • There is a chance that your new home will lose value. Luckily, in general, the longer you own your home, the less likely a loss becomes. Loss of value is typically a short-term problem, possibly due to the local...
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...Renting an Apartment is a better option than buying a House (Week 2 Day 7 Assignment) Is renting an apartment a better option than buying a house? My argument is buying a house is a better option than renting an apartment. The point of view will support my topic by including facts, statistics, examples and details. The point of view will include the pros of buying a home versus the cons of renting an apartment, such as buying a house is an investment versus throwing money away, buying a house can be a tax deduction, buying a house is an investment you can live in, having a fixed mortgage rate in buying a house is a better financial option than having to deal with the inflation of rent every lease renewal, last but not least buying a home will allow you to update and upgrade as you wish, inside and outside. My point of view will also include facts and evidence against the opposing position. An argument cannot be one sided. Including evidence such as an apartment is rent and rent is money that is not an investment, you can add up all the rent you have paid in the past twenty –five years and have nothing concrete to show for it versus paying a mortgage for the past twenty-five years and could own the house in another five in most cases. In an apartment you cannot upgrade as you wish, you may risk rent increasing every year upon the lease being renewed and new management can take over and you lose your apartment. With a house, you get a garage, with an apartment you have to...
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...analysis carried out in Part I of our project has shown that the data is consistent and reliable, with no missing values. The next step is to construct preliminary and final models. A. Create indicator (dummy) variables for the qualitative variables Own/Rent and Location using Minitab. First, label columns for the new indicator variables: Own, Rent, Urban, Suburban, Rural. Pull down the Calc menu in Minitab and select “Make Indicator Variables”. In the box labeled “Indicator Variables for … “ put the variable for which indicators are desired. Minitab will automatically code the values of Own/Rent and create two new variables named “Own” and “Rent”. Repeat this process for the variable Location. See screenshot below for new indicator variables: [pic] B. Develop a preliminary model and display its output in your paper. Describe its statistical characteristics and state your conclusions. Identify which variables you will keep and those you will drop. Be sure to explain why you made your choices. Be specific. [pic] Demonstrated above are variables for potential credit card owners for the proposed system. The current variables are: Credit Score, Income, Household Size, Own/Rent and Location. Some of the variables might be unnecessary for this particular system. For example, household size does not determine whether or not someone has a good credit score. Based on previous statistical information...
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...This agreement made at Dhaka this 8 day of August 2004. Between Mr. Abu H. Imamuddin S/O Late A. Q. M. Mahiuddin and Ms. Fariel Imamuddin W/O. Mr. Abu H. Imamuddin, of House no. 50, Road no. 10/A, Dhanmondi, Dhaka 1209, Bangladesh. Hereinafter referred as the Lessor (which expression shall mean and include their nominees, representatives, assigns, successors and legal representatives) of the one part. And Heidelberg Cement Bangladesh Ltd., Red Crescent Concord Tower, 17, Mohakhali CA [4-5h Floor] Dhaka, Hereinafter called the Lessees (which expression shall mean and include its successors, assigns, nominees, officers and legal representatives) of the other part. And Whereas the Lessor owns and is in possession of the Apartment 3B, of Plot no.37, Raod no. 123, Gulshan Residential Area, Dhaka, next to Gulshan Lake. And Whereas the Lessee has applied to the Lessor for the lease of Furniture, Fitting and Fixtures of the same apartment for residential accommodation. Lessor agreed to grant the lease of those items fully described in the Schedule referred as the List of Furniture, Fitting and Fixture. Now it is hereby agreed between the parties hereto as follows: 1. In consideration of the rent hereinafter referred to and other conditions herein contained, the Lessor agrees to let and the Lessee agrees to take on lease the same apartment on monthly rental basis from 15 August 2004 for a period of three years expiring on 14 August 2007. 2. The Lease may be extended under...
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...Risk Paper 1 Pm595 Risk Paper: Buying a new house Project Risk Management Professor: James Reckon By Magued Farag May 24, 2014 TITLE: BUYING A NEW HOUSE TABLE OF CONTENTS INTRODUCTION RISKS IDENTIFICATION RISKS RANKING MATRIX RISKS MONITORING CONCLUSION REFERENCES * INTRODUCTION Whenever considering a major purchase in life one must carefully consider the risks associated with making these purchase decisions. These decisions should be treated as projects in such a way that proper planning, analysis, risk assessment and contingency should all be aspects of the purchase process whether formal or informal. In this paper, I will discuss about a project that many people are familiar to: buying a new house. Few years ago, I moved to a new area and was trying to decide whether or not to purchase a new house, and if so, where should I buy it. I also considered if I should buy a preexisting new house or hire a builder for a new house. Every option had its own set of potential risks. If I continued to rent, was this really just throwing away money. If I purchased a house, could I afford it and was I buying the best house for me and my family? I approached it like any other project, with interviewing people, note collecting, collating, and interpreting the data. After reviewing my expenses and income and examining the tax advantages, I decided to buy a house but knowing that several risks may accompany my decisions, these risks rank from high probability...
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