...1. Will you buy a house and lot today or pay in installment of simply rent? Use time value of money. Should I Buy a Home or Just Keep Renting? Kristin Wong Should I Buy a Home or Just Keep Renting? Dear Two Cents, I’m out of debt, and I’m now saving for a down payment on a home. It’s always been my dream to be a homeowner. But lately, I read a lot of arguments against it in favor of renting. How do I know if it’s a good idea for me? Should I buy or keep renting? Sincerely, Hopeful Homeowner Dear HH, For a long time, conventional wisdom seemed to be that you grow up and buy a home because that’s just what you do. But lately, people are realizing that it isn’t always the smartest financial move. Obviously, the housing crisis has a lot to do with that—it’s made people question the standard assumption that homeownership equals financial stability. Five Things I Wish I Had Known Before I Bought a House Homeownership isn’t a good or bad idea on its own. It has everything to do with your own situation. Sometimes, buying a home is the smart thing to do; other times, it really isn’t. Whether or not it’s smart for you will depend on a few different factors. Here’s what you should keep in mind. Don’t Think of a Home as Your Main Investment Should I Buy a Home or Just Keep Renting? The biggest argument for owning a home is that it’s an “investment.” But a lot of people overestimate the return on this investment. People tend to believe that homes are appreciating assets,...
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...Renting: Which is better for you? Your Name Com/156 Current Date Your Instructor Buying or Renting: Which is better for you? Introduction Many times we are faced with the challenge of choosing between buying a home and renting one. There are various advantages and disadvantages related to each of these options that an individual has. It is the dream of each individual to own a home in a good environment which is secure and peaceful. 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...
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...Real Estate Foreclosures » Why a Lot of 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...
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...market ski that requires special binding, based on the figures provided for this assignment I am going to answer four questions about how the Minnetonka Ski Pro Corporation should conduct their expansion. All answers will revolve around cost and production. Question 1: Should the Minnetonka Corporation make or buy the bindings for their new line of winter skis? I believe that the Minnetonka Corporation should buy the bindings because it cost less money to buy them rather then make them. Make | Discount | Calculation | Buy | Totals | Labor | $35.00 | -10% | $35 - ($35 * .1) | $ 31.50 | Material | $30.00 | -20% | $30 - ($30 * .2) | $24.00 | Overhead | $15.00 | -10% | $15 - ($15* .1) | $13.50 | | | | Subtotal | $69.00 | | | | + Bindings | 10.50 | Total | $80.00 | | | $79.50 | Question 2: What would be the maximum purchase price acceptable to the Minnetonka Corporation for the bindings? Competitive companies have been known to maximize profits by producing quantity of a product where the cost is less than or equal to the revenue generated. In the case of the Minnetonka Corporation each pair of winter skis cost $69.00 to buy. So the best possible cost for the bindings should not exceed the price per pair ($80.00). With that in mind, the maximum allowable price for bindings should not exceed $80.00 (sale price) - $69.00 (bought manufacturing) = $11.00...
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...still better to buy a home then rent. I. Why pay rent and make the landlord richer when you can own your own home for basically the same monthly payment and reap the tax benefits yourself. II. In 2006 I was faced with having to make the decision to buy or rent. After researching found I could buy a 4 bedroom house in a good area for same price of renting a 2 bedroom apartment. Also working for the government I knew the tax advantages I would get so I don’t have to tell you which decision I went with. III. Today I am going to show you that buying a house is a better choice then renting even in this unstable economy. IV. There are many programs that help people purchase a home. First time homebuyers even with bad credit can qualify. Do you know where to look? I will provide you with some internet sights that can be of assistance. V. There are many reasons why home buying is better than renting; the few that I will talk about are 1. Long term buying costs less on a yearly basis then renting. 2. Good financial investment and low interest rates and 3. Tax advantages Now that we are coming to a close on the semester some of you are going to be faced with the decision upon graduation as to whether you should buy or rent. I. If you have already decided that you will be staying in a certain area for at least 7 years it is shown that buying is cheaper than renting. a. On April 21st. 2010 the NY Times reported that if you remain in your...
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...people would either like to rent or become a homeowner, but there are several factors that need to be address before making the decision; these reasons include financial status, lifestyle, tax deductions, privacy, commitment, savings, utility cost, and a whole lot of research. Today’s housing market is on the rise, so this is the time to jump in or is it? You are probably asking, what advantages do I have if I purchase a home or rent? What would be better for me financially? It is important to know some facts of renting vs. homeownership before making such an important decision. Homeownership is not for everyone. I believe it’s up to the individual if they want to rent or buy. In some cases people are just better off renting. Before buying a home, it’s important to consider how that purchase will affect your finances and your lifestyle. Homes typically increase in value by allowing you to build equity in it, which will offer an investment for the future. Every time a mortgage payment is made, it is applied to your balance which reduces the loan that was taken out. Your monthly costs are usually more predictable and more stable than renting because they’re ideally based on a fixed-rate mortgage. Which means, the monthly amount of your mortgage will not increase for the duration of the loan. An article from TurboTax said (2013), “You know that you can get an income tax deduction on the mortgage interest you pay. But there are other tax deductions you can take on your principal...
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...The owners of a small manufacturing company have hired a manager to run the company with the expectation that he will buy the company after five years. Compensation of the new vice president is a flat salary plus 75% of first $150,000 of profit, and then 10% of profit over $150,000. Purchase price for the company is set as 4.5 times earnings (profit), computed as average annual profitability over the next five years. Does this contract align the incentives of the new vice president with the goals of the owners? A) No, these incentives are not aligned. If the VP keeps $112,500 of the first $150,000k then he will be motivated up to that point. Only 10% of the profit over $150,000 will be retained by him which is a very real decreasing marginal benefit. In addition, setting the purchase price based on profit certainly incentivizes him to keep the total profit down during that time. See below: So in this scenario he would earn $75k less over the 5 years, but would be able to buy the company for ½ the price. I have not factored in the flat salary as it isn’t really relevant except to add to the discrepancy even more. 2) Production Opportunity Cost A can manufacturing company produces and sells three different types of cans: versions X, Y, and Z. A high-level, simplified profit/loss statement for the company is provided here. Corporate overhead (rent, general and administrative expense, etc.) is allocated equally among the three product versions. After reviewing the...
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...to make homeownership available on the best terms for Members who would otherwise be prevented from obtaining an affordable mortgage. NACA is open to everyone regardless of their income or where they want to live as long as they adhere to our eligibility requirements, policies, and procedures. The real estate and mortgage industries are filled with bad actors who contribute to the destabilization of our communities and the exploitation of working people. As an alternative to these predatory practices, we will work with you for as long as it takes to purchase a home, and we will support you for as long as you have your NACA Mortgage. The NACA Qualification, which is required for a NACA Mortgage, is an extensive analysis of your finances to determine whether you are ready for homeownership and what monthly mortgage payment you can comfortably afford. Depending on your situation, this process can take one session, several months, or longer. NACA will work with you for as long as it takes to become NACA Qualified. Every person in your household that intends to be on the mortgage must participate in this process and must complete the NACA Qualification process. The requirements for the NACA program apply to each person on the mortgage and many requirements also apply to household members even the ones who do not intend to be on the mortgage. The NACA Mortgage features are described...
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...400 × 300 Caption A rent-to-own home helps a renter become a homeowner. Alternate Text Group If your credit isn't stellar or you're finding it impossible to save a nice down payment, buying a house can feel completely out of reach. In this case, a rent-to-own (RTO) property will look like manna from heaven - and it may be. RTO agreements are complex, however, and the devil is definitely in the details. Get them wrong, and your little slice of heaven can quickly become your own personal hell. RTO contracts are legally binding, so you need to know what to ask for when negotiating and then take the agreement to an attorney for review before signing it. Purchase Price When entering into an RTO agreement, you and your landlord must agree on a purchase price for the home. In some arrangements, both parties simply choose a fair price and make it part of the contract. Real estate markets change, however, and locking in a price now is potentially risky. If the market tanks while you're still renting, you could end up paying too much for the house. If the market soars, your landlord could get less than fair market value when you do buy. Some RTO contracts avoid this risk by stating that the home will undergo an assessment when the tenant is ready to buy. The...
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...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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...BUY vs. RENT INTRODUCTION: We are pleased to submit the accompanying analysis of two properties in the desirable Cottonwood Valley subdivision area. The purpose of this report is to develop an opinion of the market value for the potential purchase of property one and the benefits of renting potential property two. The opinions of value expressed in this report are based on estimates and forecasts that are prospective in nature and the data obtained from third party sources. PURCHASE PROPERTY ONE - 1809 Crockett Circle: The subject purchase property is in an upscale, gated community located in the Cottonwood Valley subdivision. The square footage of this house is 2,535 sq. ft. and features three bedrooms, two full baths and one half bath. This home was recently renovated with exotic birch hardwood floors and paint. The listed price for this property is $299,000. Property Analysis: Square Footage: | 2,535 | Year Built: | 1984 | Bedrooms: | 3 | Style of House: | Contemporary | Full Baths: | 2 | Acres: | 0.189 | Half Baths: | 1 | Garage Space | 2 | Living Room: | 17x21 | Construction: | Brick | Dining Room: | 13x12 | Foundation: | Slab | Breakfast Room: | 7x10 | Roof: | Metal | Kitchen: | 14x13 | Cooling: | Central Air-Elec | Master Bedroom: | 20x15 | Heating: | Central Heat-Gas | Bedroom: | 15x12 | HOA Dues: | $1,500 Annual | Bedroom: | 12x12 | Features: | Gated Entrance | Library/Study: | 12x11 | | | RENTAL PROPERTY TWO - 809 W...
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...Is now the right time to invest in buy-to-let property Introduction In 2012 the average rental price has reached a new high which may encourage savers to invest in a buy-to-let property. This has led to raise the question from experts if now is the right time to invest in buy-to-let mortgage. This essay will explore whether now is the right time to invest in buy-to-let property and the implications of such investment. Furthermore I will identify and summarize 4 relevant academic journal articles and I will show how they link to the topic chosen. I will also identify a research gap. Summary of the story In July the average rental price has reached a new high which may seem encouraging to savers to invest in a buy-to-let property. However some of the leading experts in this area has questioned whether this is the right time for such an investment. Despite the attraction of rising rents, there are a number of potential issues associated with investing in the buy-to-let market. Over the last few years rents have increased as would be buyers struggle to raise enough deposits or meet lenders’ strict mortgage criteria to buy their own homes. Just for last month the average rent in England and Wales has risen by 1 percentage point to £725 per month, which is the fourth consecutive monthly increase. Over 100,000 tenants have fallen into a mortgage debt, while the number of landlords who struggle to meet their mortgage repayment is increasing. Potential implications on investment...
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...Free Special Report… “How to safely buy a new home without bank qualifying or a large down payment” Stop wasting your money on rent or living in a house that doesn’t meet your needs. Discover how to move into a better home now! Dear Homebuyer, Some people are tenants by choice. However, most people would prefer to enjoy all the benefits of owning a home if at all possible. It can be the single most important investment you ever make. A lot of people's personal wealth is made up mostly from equity they've built through years of responsible home ownership. We believe buying a home should be at the top of your goal list. Let us help you achieve that goal. We can give you access to homes for sale right now with flexible owner financing. Our unique approach can help you achieve the reward of owning your own home faster and easier than going the traditional route. Here are the benefits you can be enjoying by working with us: You can move fast When you buy a rent to own home you can move in quickly and easily. Most rent to own properties are available immediately. Get into a rent to own home in just a few days with flexible owner terms or set a date further out. Compare that to buying an owner occupied home through an agent. How frustrating! First you have to qualify for a loan which could take 3 to 8 weeks (Rent to own homes however require no upfront bank financing). Then you have to coordinate your move subject to the schedule of the seller. Look out if the seller wants everything...
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...who started a successful business in high school. 3. Benny has one hour before bedtime and he can either watch TV or listen to his new Korn CD. He chooses to listen to the CD. The scarcity problem's influence on Benny is seen in: A) a the decision to listen to music. B) the decision not to watch TV. C) the fixed amount of time before bed. D) the decision to choose between TV and music. 4. All of the following statements are false except: A) Normative economic statements are statements of fact. B) In positive economics, we are detached scientists and personal values do not enter our description of economic events.z C) "The unemployment rate for September, 1987 was 5.9 percent" is a normative statement. D) "The government should provide a minimum income to every citizen" is a positive statement. 5. Economists frequently use economic models. These models: A) are tools used in the analysis of economic relationships. B) may be graphs expressing the relationship between two economic variables. C) may be equations expressing a relationship between two or more variables. D) all of the above. 6. Which one of the following statements is false? A) If the economist wants to examine the...
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...government action This chapter provides the following information in regards to how governments influence the economy. In it, we will look into depth about price ceilings and floors, and how they affect the markets. As well as price supports in agriculture. Then we will look at discussion on taxes, from income tax to fairness and tradeoff. When we reviewed price ceilings, it particularly discussed rent ceilings. Rent ceilings are a regulation that makes it illegal to charge more than a specified rent for housing. So if a rent ceiling was set above the equilibrium price, it wouldn’t do much because people are already paying that price range. But when it is below the equilibrium price, which is when there are very extreme effects. So with a rent ceiling is below, you will begin to have housing shortages, which in turn opens up black markets, and increases search activities. So the question of rent ceiling efficiency is answered, if there were no ceilings, then the market forces would determine its own equilibrium rent, thus the quantity demanded would equal supplied. But with a rent ceiling in place, the outcome would be inefficient as the marginal benefit would exceed marginal cost, and deadweight loss arises. We move on to price floors, where government regulation places a lower limit on which a particular good or service may be traded. Anything lower would be illegal. A good example provided in this chapter is the minimum wage law. The whole aim is to boost the income of...
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