Abstract

This paper explores the financial considerations involved in deciding whether to rent or own residential property by applying a detailed Net Present Value (NPV) analysis across various housing tenure periods. Beginning with a literature review, the paper summarizes current research, highlighting both established findings and notable gaps regarding financial outcomes and consumer behavior in housing choices. The theoretical section then discusses the financial principles underpinning the NPV method, including discount rates, opportunity costs, and the economic logic influencing housing decisions. The data analysis incorporates essential housing market variables such as local price indices, rental trends, mortgage conditions, and property appreciation rates. Findings from the NPV analysis provide meaningful insights into optimal housing decisions for short, medium, and long-term scenarios, considering regional differences and market conditions. This paper offers practical guidance for potential homeowners, renters, and real estate professionals, enhancing their understanding of the financial pros and cons associated with renting versus owning.

Advisor

Tian, Huiting

Department

Business Economics

Disciplines

Business | Real Estate

Keywords

Housing, Tenure, Short-Term Housing, Rent Vs. Buy, Renting

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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