The resale value of the home 10 years

To determine the resale value of the home 10 years from today for the cost of ownership to equal the cost of renting, we need to calculate the total cost of ownership and compare it to the cost of renting. Let’s break down the costs associated with owning the home: Purchase price: $340,000 Property taxes: $1,200 per year Insurance premiums: $1,400 per year Annual repair and maintenance: $1,950 Total cost of ownership per year: $1,200 + $1,400 + $1,950 = $4,550 Total cost of ownership over 10 years: $4,550 * 10 = $45,500 Now, let’s calculate the cost of renting over 10 years: $25,800 * 10 = $258,000 To determine the resale value that would make the cost of ownership equal to the cost of renting, we need to add the total cost of ownership to the purchase price and subtract the cost of renting: Resale Value = Purchase Price + Total Cost of Ownership - Cost of Renting Resale Value = $340,000 + $45,500 - $258,000 Resale Value = $127,500 Therefore, the resale value of the home 10 years from today must be at least $127,500 for the cost of ownership to equal the cost of renting, assuming an 8.0% return before taxes is the couple’s minimum rate of return.      

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