(a) Does the home buyer enjoy tax advantages? Explain.
(b) Discuss Maggi’s belief that cash flow is better with renting.
(c) Suggest some reasons why Michael might consider renting rather than purchasing housing.
(d) Suggest some reasons why Maggi might consider buying rather than renting housing.
(e) Is there a clear-cut basis for deciding whether to rent or buy housing? Explain why or why not.
Michael Joseph and Maggi Lewis of Biloxi, Mississippi, are trying to decide whether to rent or purchase housing. Michael favors buying and Maggi leans toward renting, and both seem able to justify their particular choice. Michael thinks that the tax advantages are a very good reason for buying. Maggi, however, believes that cash flow is so much better when renting. See whether you can help them make their decision.