Bus 640 Final Paper

Final Project Buy or Rent?Kao Saephanh |

BUS 640: Managerial Economic |

Prof. Kunsoo Choi |

January 14, 2012 |

Abstract

Making that next move in life is a great tough decision for many. Buying or renting your home is one of the decisions that we ponder a great deal before jumping into the bag. There are many advantages and disadvantages in making this purchase. Explicit costs are easily seen by consumers. Implicit costs and opportunity costs are another indication that one much decided to buy or simply to just keep renting.

In today’s housing market and current economic condition many people wonder if it is a good time to buy a house or to stay put in renting. In many big cities such as the one I am living in, Sacramento, California the economy took a big hit on the job market. Unemployment climbs to high rate of 10% in Sacramento between 2010 and 2012 (Daily News 2010). This paper will review the cost of buying and renting a house. Some of the factor in deciding this big purchase is job security and opportunities that people feel important. Moreover, I will be looking at the advantage and disadvantage of buying and renting. Economic stand point wills one benefit from renting or benefit more from owning? I will discuss this question too.

Executive Summary

In today’s economy, buying a home has more benefits and advantages than renting. What advantages do I have if I purchase a home or rent? Which way would be better, financially? The way the economy is today, you may find it very beneficial to actually purchase a home rather than rent. There are many options available to someone who is considering the purchase of a home, but it is important to view the advantages and disadvantages of owning and renting before making this important decision.

Definition

Supply, Demand and Opportunity cost of buying or renting a home. The housing market can be either a supply market or a demand market. Supply is the housing available for rent or...