You are considering buying a house for cash and renting it for
10-15 years. You plan to pay cash for it. The renter will pay for
utilities and yard upkeep. You are looking at three options, all of
which are in nice family neighborhoods.
House Price, Condition of the Monthly
Option Size, ft² SK House Rent, $
Comments
A 1500 125 Very good 1200 3 bedrooms, 2 baths, AC
B 1300 100 Below average 900 3 bedrooms, 1 baths, no AC
C 1300 110 Good 1100 3 bedrooms, 1½ baths, AC
As a part of looking over Option B, you looked at what it would
take to upgrade the house to a very good condition. The upgrade
would involve adding AC, doing needed house maintenance,
replacing the carpet, and painting the house. You estimate this
will cost $17K.
• Would you invest in any of these options? Which one?
• Why or why not?
• Did you consider an option other than these three? If so,
what was it?
9/29/18