My PBL Project

Here is an action video of my project:

Introduction: Renting or buying, which one is better? What homes are for sale? What homes are for rent? Is it cheaper in this place than in that place? How can functions and equations relate to buying a home and your income? These questions are what I will research in my PBL project.

Materials: Internet, Camera, A Google account, certain websites (this, this, this and this), Google docs, Google spreadsheet and Google sites.

Procedures:

1. Pick 3 different careers.

2. Find houses in 3 cities you want to research.

3. Determine how much you want to spend and can afford on a home.

4. Determine how much of a loan you need and investigate rates and time periods of the loan.

5. Decide whether buying or renting is better.

6. Find your payment per month.

Here is a picture of a website I used for my project:

Scientific Principle

I will use equations to help on buying a house, and then deciding whether I should buy or rent it. With the houses I have picked in the cities I have picked, I will see whether it is more beneficial for me to buy or rent the house. For renting, I used equations to see whether renting will be cheaper than buying it outright with a loan or without. I calculated the maximum rent I would be able to pay and found homes in under or at that amount. After that, then I calculated the time it would take for me to exceed or equal the amount the home costed if you bought it outright, in full. On average, buyers usually stay in their homes for at least 10 years. So a home that was cheaper to rent than buy in 10 years would be better to rent. The opposite also applies: if the home is cheaper to buy with loans or without loans, depending on the job, it would be better to buy. For buying, I used equations to see, if needed, how much I needed to pay for the loan, again, if necessary, to buy the house. I again determined how much I could pay with my salary monthly, and how much principal and interest I could pay within the part sectioned from my salary to pay for the house. Again, if housing was cheaper to buy than rent, even with loans to pay, I bought. If housing was cheaper to rent than buy, I rented. I did this with 2 houses, one to buy and one to rent, in 3 cities with 3 different jobs.

Reflection Questions

1. What additional costs are involved to own a home?

There are many different costs. You have to factor in taxes, homeowner’s association fees and moving costs. There might be a fee for inspecting the home. Fees for services like cable and water can be included as well.

2. What other expenses you can have each month?

You have water bills, electric bills and telephone and internet bills. There might be bills for cable and homeowners bills. The billing cycle on these bills depends on the area and what payment plan you choose.

3. How do salaries vary from state to state in the United States?

Salaries vary on the availability of the job and the rate of turnover. The demand for the job will affect the salary too. Demands for jobs vary on time, place and need.

4. How does the cost of homes vary from state to state in the United States?

Some states are more desirable than others because of location, taxes, proximity to friends and family, etc. California, for example, is widely desired by a lot of people, especially near the ocean. Inland states aren't nearly as popular,

5, What are the advantages and disadvantages of owning your own home?

The advantages are that you have a place you own and you can change if you want to. It is your house. The disadvantages are that you have to pay or do repairs yourself and that houses usually can only be bought with a loan.

6. How do taxes affect your income?

Taxes will take a part of your income depending on how much you make, the rate of the tax and what taxes you have in your area. Some places have taxes other places don’t. In Texas, for instance, you do not have to pay state tax.

7. What type(s) of insurance must you purchase as a homeowner?

You should buy home insurance and additional insurance, like fire or flood insurance, if you are in areas prone to the events or to cover all your bases. Insurance is very recommended, especially if you own the home. Renters usually don't have to buy insurance.

8. What are the advantages and disadvantages of longer–term versus shorter–term loans, for

example, a 15 versus a 30–year loan?

Shorter-term loans will be paid off sooner but also have higher interest rates. Long-term loans have lower interest rates but will take longer to pay off. You have to pay a less amount of money with long-term loans but for a longer period of time. Vice-versa for the short-term ones.

9. Find out why the amount of principal and interest paid varies over the period of the loan.

Why do you pay more in interest in your payments at the beginning of the loan?

You pay more in the beginning because the loaner doesn't trust you enough yet to pay your loan in full. If payments are steady, the loan rates decrease. If you don't pay your loans on time or don't pay them at all or aren't consistent, the loaner has more money than they would if the principal and interest rates paid were flat.

10. After your researches do you think renting or buying is more logical? Why?

Buying is more logical because homes are cheap and numerous at this point in time. There are not a lot of homes for rent at this time either. The homes are not as cheap as they were a few years ago but still are cheap. If you really need to rent, apartments would be more suitable.

11. How did you use algebraic equations and inequalities in this project?

I used equations to see how much I would pay for my house each month. I would see if I could pay for it with a portion of my salary. As I said in my scientific principle, I used equations to see whether buying or renting a house is better in a time period of 10 years. If buying is cheaper, I buy. If renting is cheaper, I rent.