Create a decision treeplan for renting, buying a coop, buying a house. Any make

Question

Create a decision treeplan for renting, buying a coop, buying a house. Any make up numbers can be used. Please make up a percentage for interest, real estate tax, other expenses, and mortgage deductible. This is a harder tree problem. I am after the first decision is make with event nodes, there will be other decisions as to where it’s more profitable to sell the house or coop later. Create a decision treeplan for renting, buying a coop, buying a house. Any make up numbers can be used. Please make up a percentage for interest, real estate tax, other expenses, and mortgage deductible. This is a harder tree problem. I am after the first decision is make with event nodes, there will be other decisions as to where it’s more profitable to sell the house or coop later.

Explanation / Answer

Normally the numbers you mentioned ($4.8273 and $3.6848) are per share annually but not 100% of the time, you need to find out if those numbers are based on annual or monthly. Assuming they are based on annual, the calculation goes as follows: $4.8273 + $3.6848 = $8.5121 per share, 26 x $8.5121 = $221.3146. Hence the tax write off based on the number of shares is $221.00, I do not know if that is annually or monthly, you have to check with the management company on that. If it is annually, that means the write off would only be about 5.5%, if those numbers are based on monthly, then $221.00 x 12 = $2652.00 which would be about 69%. This percentage can vary greatly from co-op to co-op on a case by case basis, it is based on the interest paid on the underlining mortgage and real estate taxes on the co-op building as a whole.

Keep in mind that if you took a mortgage for your self when you purchased the co-op, their interest on that mortgage also becomes a tax deduction for you assuming that this is your primary residence. If I can be of further assistance please let me know. Good luck!

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