Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
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Discuss housing affordability in general. When researching your response consider the following: personal income, housing prices, mortgage rates, nonmortgage expenses, and also personal/mental/social positives and negatives of owning vs renting.
Why does a house broker usually recommend her clients the median house price in a community but not average price?
Calculate the appreciation rate of each home. Show your work. Then, write at least two paragraphs that discuss which home you’d like to buy, based on the rate at which it will appreciate and its features.
In paragraph 1, include each appreciation rate. Why do you think the appreciation rates are different for each home? Explain your reasoning. In paragraph 2, compare and contrast the features of the homes, based on what you would be looking for in a house. Be sure to state which home you would want to buy.
(If you buy Home 1, you think that you will own it for 3.5 years, but if you buy Home 2, you will likely own it for 7.25 years. You’re unsure how long you might stay in Home 3, but you think it would be about 4.75 years.)
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- Rent versus buy analysis - Part 2 Which is better: to rent or to buy? 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. Tim and his wife are trying to decide whether to rent or to purchase a new townhouse. After looking for several months, they ve narrowed their choice down to one particular house, and the builder is willing to lease or sell-depending upon the preference of the buyer. To perform a rent or buy analysis, Tim and his wife have collected the following information: if they rent, the builder will require monthly rental payments of $1,300 and a security deposit equal to two months of rent Since they…arrow_forwardAssume Louise has inherited a large sum of money and wish to use it to make a real estate investment. She is a working professional in her late 30s. a. Would you recommend her to invest in income property or speculative property? Why? Describe the key characteristics of the income or speculative property on which she would focus her search. b. Louise has studied economics and knows about demand and supply, yet she doesn’t understand how to apply them to an investment analysis. Advise Louise in a practical way, how she might incorporate demand and supply into an investment analysis of property investment?arrow_forwardWhat is the best way to invest your saved up money after retirement? Buy stocks or construct a building to be rented out to others as dormitory? And why?arrow_forward
- An investor has approached you to assist him in analyzing a potential real estate investment in Mombasa town. The property is an heavy industrial building. Prepare a comprehensive due diligence checklist with detailed explanation for each item.arrow_forwardCompare the advantages of renting to buying. Why is it not always better to buy a house then to rent a house?arrow_forwardMost of us have had experience renting. Share your experience. List two good things you have done in the past that were helpful to you when you were searching for and renting an apartment. Also, name two mistakes you have made or lessons you have learned in renting an apartment. If you have never rented an apartment, what are the four things you think are most important when finding and renting an apartment?Explain why you have never rented.arrow_forward
- You are going to be a partner of your friend in a real estate business. How will you do it?arrow_forwardAlthough the selection of housing is usually based on life situation and financial factors, we should also consider what we might have to give up. In this context, it is correct to say that: * One of the main advantages of owning a previously owned house is the fewer responsability for maintenance. One of the main advantages of renting an apartment is the pride of ownership. One of the main disadvantages of owning a manufactured home (mobile home) is to be more expensive than other ownership options. The lost earnings from interest on the money used for a down payment on a home is an important opportunity cost when we decide to buy a house or make a mortgage.arrow_forwardWhat finances do you need to have to achieve getting somewhere with Cosmetology? For instance to build your own salon?arrow_forward
- Graduate students Romeo and Juliet settled into an apartment close to the school. Juliet wants to purchase renter's insurance, but Romeo believes they don't need it because their stuff isn't very valuable. They have some pricey computers and sound equipment, among other things, Juliet points out. To assist the Romeo in solving their problem, offer them some options for obtaining a policy, and recommend a strategy for choosing how much insurance to purchasearrow_forwardWhich of the following would you recommend to clients who want to increase the potential for their child to receive financial aid? a. Use excess liquid assets to pay off their home mortgage b. Shift income from the parent to the child attending college. c. Withdraw funds from retirement accounts to fund college education. d. Send the college student to a lower cost university.arrow_forwardWhy are sellers willing to pay a commission to a broker to facilitate the sale of their property? Take one of the 6 fiduciary responsibilities (COALDS). Explain how a breach of this responsibility (the agent not following it) could harm the principal in a real estate transaction. Why would a buyer want to have a contract with a real estate brokerage? What benefits would there be? Find a local real estate agency/brokerage and explore their website. Explain one thing you found that relates to what we learned in Chapter 12. What are some of the elements of a listing agreement? Why are these included?arrow_forward
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