Alternative and recommend least costly option rent or buy

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Reference no: EM131302266

You are currently renting an apartment for $725 per month and paying $275 annually for renter’s insurance. You just found a small townhouse you can buy for $185,000. You have enough cash for a $10,000 down payment and $4,000 in closing costs. You estimated the following costs as a percentage of the home’s price: property taxes, 2.5 percent; homeowner’s insurance, 0.5 percent; and maintenance, 0.7 percent. You are in the 25 percent tax bracket. Using Worksheet 5.2, calculate the cost of each alternative and recommend the least costly option—rent or buy.

Reference no: EM131302266

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