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Rent, Own Or Reverse Your Home?

Author

Listed:
  • Marcel Marekwica
  • Konstantinos Pyliouras

Abstract

We examine the optimal dynamic portfolio decisions for investors that either rent or own a house in the presence of reverse mortgages. Using stochastic dynamic programming different scenarios are modelled to find out how the existence of reverse mortgages changes the decision or the point in time when to buy or rent a house over the life cycle. Our results highlight the importance of the home reversion option for the decision whether and when to buy a house. In addition the article extends current ìrent or ownî life cycle literature by adding the reverse mortgage option as new key factor that may alter previous results regarding the important determinants of home ownership.

Suggested Citation

  • Marcel Marekwica & Konstantinos Pyliouras, 2008. "Rent, Own Or Reverse Your Home?," ERES eres2008_205, European Real Estate Society (ERES).
    • Handle: RePEc:arz:wpaper:eres2008_205
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    File URL: https://eres.architexturez.net/doc/oai-eres-id-eres2008-205
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    More about this item

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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