SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Residential Real Estate Crash Index
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Tradelite who wrote (497)8/29/2001 2:26:53 PM
From: chomolungmaRead Replies (1) of 306849
 
This question was posed on this board yesterday, but no one answered it: How, exactly,
does one calculate the "return" or the "investment value" of living in FREE housing for what
could amount to several decades of one's life? (And seeing your property value continue to
increase at least somewhat during those later years?)

Free? I don’t think so.

This is how I calculate the return on investment for my residence.

First you have to analyze how much capital you have tied up in the house at any given period. To do this, you add your down payment to the stream of principal payments on your mortgage.

Next, you need to compare the cost of renting with the cost of owning. The cost of owning is the after-tax cost of the interest payments on your mortgage. Add to this the after-tax cost of property taxes. Then add the cost of insuring the property plus any maintenance on the property. Compare this cost of owning to what you would pay as rent. If the cost of owning is greater, add this amount to the amount of capital you have invested in the home. If the cost of renting is greater, subtract the amount from the amount of capital you have invested.

Finally compare your original investment (discounting the periodic flows back) to the market value of the property and arrive at an ROI figure.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News