Comprar o vender

Input Variables

Purchase price $600,000 Insurance $3,000

Down payment 20.00% Repairs/Maintenance $6,000

Loan amount $480,000 Property tax $7,800

Interest rate (Fixed) 4.00% Initial monthly rent $3,000 24,000.00

Loan maturity (years) 25 Property appreciation

Mortgage Payment $2,534 Expense growth (RM&INS) 760,085.05

Closing costs $18,000 Rental growth rate 0.00%

Holding period (years) Investment opportunity

Selling expenses Marginal tax rate

Option 1: Buy the house

Year 0 1 2 3 4 5 6 7 8 9 10

Out flows

Down payment + Origination $138,000

Insurance & Maintenance $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000

Property tax $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800 $7,800

Mortgage payments $30,403 $30,403 $30,403 $30,403 $30,403 $30,403 $30,403 $30,403 $30,403 $30,403

Total: $138,000 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203

In flow

Tax benefits $- $- $- $- $- $- $- $- $- $- $-

Net cash out flow $138,000 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203 $47,203

Other

Interest payment $18,992 $18,527 $18,044 $17,540 $17,016 $16,470 $15,903 $15,312 $14,697 $14,057

Principal payments $11,411 $11,876 $12,360 $12,863 $13,387 $13,933 $14,501 $15,091 $15,706 $16,346

House value $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000

Loan Balance $480,000 $468,589 $456,713 $444,353 $431,490 $418,102 $404,169 $389,669 $374,577 $358,871 $342,525

Total equity $120,000 $131,411 $143,287 $155,647 $168,510 $181,898 $195,831 $210,331 $225,423 $241,129 $257,475

Cash at time sold $181,898 $195,831 $210,331 $225,423 $241,129 $257,475

Option 2: Rent the house

Rent expenses $6,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000

Extra Cash from not buying $- $11,203 $11,203 $11,203 $11,203 $11,203 $11,203 $11,203 $11,203 $11,203 $11,203

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