EGR403-01 EGR403-01 Buy and Rent Now Buy and Rent Now

VS. VS. Save and Buy laterSave and Buy later

Team 7Team 7Mark RuffinMark Ruffin

Gerard ReyesGerard ReyesSteven CorralSteven CorralWilliam TamaeWilliam Tamae

Project ScenariosProject Scenarios

Scenario OneScenario One Rent out a paid-off house and use that Rent out a paid-off house and use that

money to help pay for a new house.money to help pay for a new house. Scenario TwoScenario Two

Stay in the paid-off house for ten years Stay in the paid-off house for ten years and use the money saved as a down and use the money saved as a down payment for a new house.payment for a new house.

Buyer DescriptionBuyer Description

40 year old Engineering Graduate40 year old Engineering Graduate Salary of $90,000Salary of $90,000 Looking to buy $500,000 houseLooking to buy $500,000 house Pomona ResidentPomona Resident

Scenario ConstantsScenario Constants

Sell off the house in 10 years in either Sell off the house in 10 years in either scenarioscenario

Both houses appreciateBoth houses appreciate Current HouseCurrent House

3 bedroom (1500 sq. ft.) 2 car garage3 bedroom (1500 sq. ft.) 2 car garage Rent = $2,000/monthRent = $2,000/month

New House New House $750,000 $750,000 30 year loan30 year loan

GoalGoalAt 7% interest on the At 7% interest on the

mortgage, which is the mortgage, which is the better option?better option?