Question

Which of the following is NOT correct? Multiple Choice Renting is usually less costly in the short run. Home ownership usually has long-term financial advantages. Lifestyle and financial factors should be analyzed to determine if you should rent or buy. Traditional financial guidelines suggest that your home should cost about five times your annual income.

Answer 1

Answer:

Traditional financial guidelines suggest that your home should cost about five times your annual income

Explanation:

Renting an apartment would be less costly initially till the point present value of rental payments equals the purchase cost of the apartment, beyond which such an alternative turns costly.

Individuals need to decide whether to rent or buy in the light of financial factors, lifestyle preferences, etc. Financial factors relate to the availability of finance to fund buying and how steady the finance could be in next few years.

The property owner is eligible for tax deductions with respect to interest payable on home loan and property taxes paid during the period. Such deductions are not available to the tenant.