Return to site

Mortgage and Depreciation Expense and Tax Analysis Essay

broken image

Mortgage and Depreciation Expense and Tax Analysis - Essay Example http://essay-writers971920.mystrikingly.com/ However, although the mortgage rate rises from 5% to 10% in the current scenario, the appreciation of houses that consumers can buy rises from 2% to 9%. This implies that demand for consumers wanting to purchase a house goes down. With such deliberations, it is apparent that an investor will find it difficult getting customers willing or able to buy a house. This becomes tricky unless the investors have some other sources of obtaining funds to service the mortgage. To many investors, availability of consumers to purchase their house is a vital factor to consider when mortgaging a house because rents collected from them highly help pay for the mortgage (Lank, 2003). In another dimension, it is argued that in any investment, it is important to venture into business when prices are low, and exit or dispose when prices are high. However, in this scenario, both interest rates and prices of housing are high.