2 important issues: 1) downpayment+purchasing cost only enjoys 9 years instead of 10 years' investment period; 2) lacking consideration of prop 13

[shengjie-zhang]

Following 2 issues:

1. "down payment+purchasing cost" only enjoys 9 years instead of 10 years' investment period in renting scenario, resulting in severe differences in total equity in renting scenario after 10 years

2. lack of consideration of prop 13 in california, resulting in higher cost of buying and therefore impacting equity calculation in rental.

Comparison as below:

Scenario: Buying scenario：3m，Down Payment 25%， Mortgage Interest Rate 6%， Expected Annual Home Appreciation： 5.5%， Closing Costs (Current Buy)： 2%， Selling Costs (Future Sale)： 5%， Property Tax Rate： 1.2% （California），Insurance & Maintenance：1%， Marginal Income Tax Rate： 38%，Capital Gains Tax Rat：23.8%。Renting Scenario：monthly rent: 8000，Expected Annual Rent Increase:5.5%，Annual Investment Return：8.5%，Capital Gains Tax Rate：23.8%

In your current calculation, total Equity in renting scenario after 10 years is $3.14M.

If taken consideration with the above two conditions, total equity in rental scenario after 10 years should be 3.46M

That's huge difference.

[zebangeth]

Thank you for bringing up these points! I will address both issues:

1. Adjusting the investment period for the “down payment + purchasing cost” to reflect the actual timeline. The main issue right now is that, in the renting scenario, the down payment and purchasing cost are only counted at the end of the first year.
2. Incorporating Proposition 13 in California to improve the accuracy of the calculations.