Project: Renting or Owning a House

Project – Renting or Owning a House

Now it is your turn. Do some research in your local community where you live, and consider the information presented in this lesson. You'll also want to consider the price-to-rent (P/R) ratio. To determine the P/R ratio, find two similar properties – one to buy and one to rent. Divide the selling price of the one for sale by the annual cost to rent a comparable property. For example:

One property is listed for sale for $150,000, and another similar property rents for $900 a month. Take the selling price of the first and divide it by the yearly cost of renting the other ($900 x 12 = $10,800). $150,000 divided by $10,800 = 13.9. Therefore, the P/R ratio is 13.9.

A price-to-rent ratio of 1 to 15 indicates buying is much better than renting. A price-to-rent ratio of 16 to 20 means it is typically better to rent than buy, and a price-to-rent ratio of 21 or more indicates it is much better to rent than buy.

After researching the two properties you have chosen, design a presentation that may include charts, math calculations, and any other pertinent information or arguments to defend your choice – to buy or rent in your community. Save your presentation as a PowerPoint and upload your presentation for review.

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Be prepared to submit your assignment as a PowerPoint for your assessment this week.