Methodology #

• Lease Payment Structure:
  
  • Monthly payments consist of two components: rent and equity contribution.
  • Equity contributions accumulate to reduce the property’s principal cost.
    
• Financial Timeline Setup:
  
  • Set a defined timeline, often spanning 10-20 years, for full ownership.
  • Incorporate escalation schedules to reflect market adjustments.
• Escalation Rates:
  
  • Determine periodic rent increments to account for inflation and market trends.
  • Calculate cumulative effects on the total cost of ownership.
• Ownership Cost Analysis:
  
  • Calculate total ownership costs, factoring in interest, principal, taxes, and other fees.
  • Compare against traditional buying and renting scenarios.

Assumptions #

• Economic Conditions:
  
  • Stable inflation rates around 3% annually.
  • Interest rates remain consistent over the lease term.
• Market Dynamics:
  
  • Property appreciation rates between 3-5% annually.
  • High demand for affordable housing in urban and suburban areas.
• Tenant Behavior:
  
  • Timely payment of lease installments.
  • Minimal risk of default or contract breaches.