Title: To Buy or Not to Buy
Objectives/Goals
This project's objective is to conclude which is more economical to buy or to
rent houses or apartments
for different incomes. It will also determine the sufficient down payment, and
the length of mortgage.
Renting an apartment will probably be cheapest, followed by renting a home,
buying an apartment, and
buying a home should be most expensive. 15-year mortgage will most likely be
cheaper than 30-year
mortgage, but will only be available to higher-class homeowners. A higher down
payment will almost
definitely be required.
Methods/Materials
Data for ten apartments and houses sold recently and rented apartments and
houses from the same area,
size, and number of rooms were averaged and used to determine an average price
for the area. Data was
then gathered from 15 families with five members for assorted bills and expenses
were averaged
separately as well as yearly. Annual salaries used were $24,000; $36,000;
$48,000; and $60,000. Down
payments used were 0%, 20%, 25%, and 30%. Mortgage was then figured out. The
rate was dependant on
the amount of the loan and the type (15- or 30-year). A second loan up to 20% of
the property value is
also taken with 0% down payment. Rent increase was then established. Next,
salary increase was found
out. The savings are then comprehended by subtracting the various expenses from
the salary for 15 and 30
years. The property value increase was then determined. The total wealth after
15 and 30 years was then
concluded by adding the property value with the savings.
Results
The results were that sold apartments were better at 15 and 30 years as the
salary increased, then rented
apartments, then sold homes and finally rented homes. 15-year mortgages were
cheaper, and a down
payment lowers the lost money form interest by a very large number.
Summary Statement
To determine the best real estate choices for different incomes
Help Received
