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130 Section 12:
130
Section 12: Real Estate and Lending
Real Estate and Lending
130
130
Section 12:
Section 12:
Real Estate and Lending
Real Estate and Lending
The Rent or Buy Decision
The Rent o
The Rent o
The Rent o
r Buy Decision
r Buy Decision
r Buy Decision
The question of whether to rent or purchase a residence is not always easy to
answer, especially when the time period over which you would own or rent a
house is short. This program performs an analysis which could be helpful in
reaching a decision. Essentially, it calculates a yield or rate of return on the
proposed investment. This yield may be compared with the yield obtained by
renting a residence and investing the down payment and monthly payment
differences in a savings account or other investment opportunity. This program
takes into account the tax advantages obtained by a home owner on property
taxes and mortgage interest.
First the program computes the Net Cash Proceeds upon Resale (
yield on the investment in the house and then the value of the hypothetical savings
account at the end of the investment period. A comparison of the
final balance of the savings account and a comparison of the yields should aid in
determining whether to rent or buy.
KEYSTROKES
KEYSTROKES
KEYSTROKES
KEYSTROKES
fs
fCLEARÎ
00-
M
01-
M
†
02-
:7
03-
b
04-
-
05-
:w
06-
?0
07-
:$
08-
fCLEARG
09-
*
The Net Cash Proceeds upon Resale (
is the pre-tax proceeds. The program assumes that the buyer reinvests in like property and is
not subject to capital gains tax.
†
FV is repeated in the program twice to ensure that it is computed and not stored.
DISPLAY
DISPLAY
DISPLAY
DISPLAY
KEYSTROKES
KEYSTROKES
KEYSTROKES
KEYSTROKES
M
t
d
15
:w
15
z
45
7
:4
25
-
30
:.0
45
11
b
44
0
:P
45
13
:4
42
34
NCPR
= sales price – commission – mortgage balance),
NCPR
),
next the
*
NCPR
and the
DISPLAY
DISPLAY
DISPLAY
DISPLAY
33-
15
34-
31
35-
33
36-
45
11
37-
10
38-
45
4
39-
30
40-45
48
0
41-
25
42-
45
14
43-
45
4
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