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The subtraction of expenses caused on LHS and RHS is the open door expense of purchasing a home. ... increment by any stretch of the imagination, when you offer the home you will get $26000 ($25000 ...
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Slide 1

Land – Math behind it Saikrishnan G

Slide 2

Realtors\' free workshop… For the utilization of guileless group of onlookers just Simple and sweet For each muddled issue, there is a basic arrangement that isn\'t right 

Slide 3

What is Realtors\' rationale? A $250,000 property with 10% thankfulness in 2 years  $275,000 offering cost Since the up front installment is (frequently) 10%, a 10% expansion in property expanded your key by 100% Don\'t bring it with a squeeze of salt however a can of salt (What happens if 10% devaluation happens?)

Slide 4

What they are not letting you know Who pays the home loan interest? Home value dear ? HoA – Whaaaat ? Property charge !!!

Slide 5

Opportunity Cost Opportunity expense of X Ceteris paribus what is the additional cost brought about through undertaking wander X ?

Slide 6

Mortgage interest (100% of Interest) Home Equity (100% of interest installment) Home proprietors affiliation expense Property charge Moving charges, punishments Garbage transfer charges New buys (refrigerator and so on.,) Tax 1 Extra power charge, gas bill and so forth., Rent (generously customize the expansion in rent) Tax 2 Opportunity cost/year

Slide 7

Let\'s put a few numbers The subtraction of costs caused on LHS and RHS is the open door expense of purchasing a home. In the event that this sum is $15,000 this infers you are paying 15 thousand/year as the cost for owning a home

Slide 8

What happens to the main ? We included the home loan intrigue just however not chief The essential (in P + I) you pay goes towards YOUR value on the home i.e., Had you paid $1000 on vital, and the house cost didn\'t increment by any stretch of the imagination, when you offer the home you will get $26000 ($25000 down + $1000 important)

Slide 9

So.. How can one record for the vital paid ? In the event that you had paid $1000 towards key in a year, the open door expense is The S&P 500 profit for the $1000 for that year (Vanguard 500 record) Let\'s say 8% is the arrival that year  Opportunity cost on important = $70

Slide 10

Total open door cost Opportunity cost interest and different costs computed in slide 7 times (1 + S&P 500 ret) num_yrs Plus Opportunity expense of central figured in slide 9 Number in our case is ($15000 * 1.08) + $70 = $16270

Slide 11

Are you making a benefit ? Home Sale value Less Broker\'s bonus (5-6% of the deal cost) Less Outstanding home loan and home value advance MUST be more prominent than TOTAL OPPORTUNITY COST in slide 10

Slide 12

… Armed with this learning

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