FINANCE ASSIGNMENT

Running head: PRINCIPLES OF REAL ESTATE ANALYSIS 1

PRINCIPLES OF REAL ESTATE REPORT 3

Topic: Principles of Real Estate Analysis

Student Name

Institution

Introduction

Having done the spread sheet detailing my expenses, I have been able to determine the amount of money that will be able to pay the mortgage. In this report therefore I give an explanation and meaning of the various financial figures. The analysis outlines my lifestyle as it is and projects how the home purchase might impact on my lifestyle. The analysis also looks at how the lifestyle will change for the next five years the loan will be under payment. It also highlights how the home will be utilized in the same period.

Current financial situation

Currently I am not in so much stable financial condition given that I have one source of income (72, 000 annual) but with several expenses to foot. There is a student loan to be catered for, car loans and credit cards to service. However, the car is in good condition and as such, it is not expected to take a lot of expenses in the next five years. My credit ratings are good and therefore I am able to access credit in future when I want. There are some savings and gift from my parent, which is expected to go towards settling the mortgage expense. Given that there are neither children nor the intention to have some, the normal household expenses are likely to be at their minimum. The purchase of the home is definitely going to make life a challenge in the first few months. However, as the revenue streams increase with time as the expenses get stagnant and hence the lower cost. This means that in the long-run the mortgages expense would not take much of the income proportion and as such, it is unlikely that it will have a negative impact on the lifestyle. The schedule of meals and recreational activities will not be affected. I usually do a movies and swimming on Sundays as a way of recreating.

Description of the Home

The starter home for me will have been acquired through a combination of mortgage financial, savings and gifts. However, the mortgage formed about 95 % of the total cost. The home will be in a place with cool climate. The house will be made of three bedrooms, a spacious sitting and washrooms. From outside the house will be sitting on a quarter acre of land. The landscape is perfect not to mention the swimming pool behind the house. Within the house, there is a gym fully equipped room to allow recreation. There is also some football pitch were any type of ball can be played mostly for recreational purposes. Such facilities are deemed enough given that the occupant of the house is a senior bachelor. The home is located within a walking distance of an elementary school not to mention that it is within 100 meters location of a shopping mall. Even though I bought the starter home alone, in the next five years I expect to have some two children and their mother in the starter home compound. Given such an environment life will have started at a high note for my family. The house was newly purchased and as such, after the purchase, the house did not need money for renovation.

Conclusion

In spite of my sorry financial state, I will be able to finance a home from my annual salary. Analysis shows that I can still afford to pay another loan in addition to car and student loan. The home I bought is modesty for a starter. It represents the traditional American dream where everyone is expected to have a house. The house has modesty recreational facilities.

List of References

Troupe, K. (January 01, 1998). The Garage as Starter Home: A future guest room or rental unit, living space over the garage is an affordable alternative to a fixer-upper or an apartment. Fine Homebuilding, 113, 84-87.

Condit, S. (2014). Starter house.