Question: The goal is to create a simplified analysis ( no tax considerations ) so this project is to create a spreadsheet that tracks and compares
The goal is to create a simplified analysis no tax considerations so this project is to create a spreadsheet that tracks and compares the cash flows on a monthly basis for two scenarios purchasing a home and renting a home and investing the down payment for approximately a year period. The question is which turns out to be a better scenario to build wealth. The scenario is as follows: Pick a house from Zillow, Realtors.com, or any other website that sold during the period of to Include a screenshot of the page showing the property. Assume you sell the property today based on current price estimate. Assume that the house was bought with an mortgage with an interest rate appropriate for that period for a year amortization. You can find historical interest rates on FreddieMac website. Taxes and insurance can be found on zillow.com and you can deflate during your hold period based on per year. Rent may be found in Zillow as a current estimate. Don't forget that if you have current rent, it has increased over the hold period by lets say an inflation rate of Use the same house for the rent or own scenario. The investment can be anything you like. S&P Index, is probably the easiest to deal with but you can use investments that you like. Bitcoin, Home Depot Stock, gold, etc if you pick specific stock investment, each pick cannot be more than of your total portfolio If you use a specific stock, you must track price, splits and dividends. Lay out the monthly cash flows for the two scenarios purchase of the home the houses over time and compare that to the cash flows that you would have received had you not bought a house but rented a home and invested instead. Essentially, the scenario that provides you the greatest wealth at the end of the period is theoretically the better strategy. What is the return for each scenario? For ownership, the cash flows should include all pretax cash flows such as: mortgage, tax, insurance, and HOA if the property has that expense optional landscaping, snow removal, capital expenses For rental, rent and investment returns.
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