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Buy vs. rent project - Determine Projected inflation rate

I am providing some additional information for your buy vs. rent project:

You will need to determine a projected inflation rate to use over the next 30 years. This inflation rate will generally apply to the utility, maintenance and insurance expenses associated with your projects. If you search "US inflation projections for the next 30 years", you may find some useful information. The Federal Reserve also has some very interesting information 

Housing prices will increase, but not necessarily the same as the rate of inflation. You will need to determine a projection for the increase in housing values over the next 30 years. This web site may be helpful.

https://fred.stlouisfed.org/ You can search for housing value escalation or something like that.

Property taxes are set and collected by the County that the house is in. You have to go to the County Auditor web site to find the taxes and tax rate for your property. The taxes are assessed on the value of your property (house and land). As the value of your property increases over the years, the annual taxes will increase in a like manner. I gave you various addresses for local counties. These taxes are not levied or collected by the State of Ohio.

With some lenders, your monthly mortgage payment will include Principle & Interest, Insurance and Property Taxes. They will then pay the Insurance and Property Taxes when they are due. For purposes of this project, assume that you will only pay Principle and Interest to the mortgagor and that you will pay the annual Insurance and Property Taxes when they come due. Assume they are due at the end of June every year.

If you take a 30-year Fixed Rate mortgage, your monthly Principle and Interest payments will remain the same for the entire 30 years. There is not a gradient involved with this type of mortgage.

Review how the tables were used in Chapter 6 for Incremental Analysis. That may be helpful.

Good luck with your project.

Buy vs. rent project - Determine Projected inflation rate

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