Introduction

The increased population in New England has forced many to look for alternative means to live a comfortable life. Currently, there are customers streaming in and out of home agencies enquiring on which alternative suits their wants. Buying or renting a house all depends on with the specifications the customer wants and therefore the cost of each alternative. With the growth in technology and the need to work and live comfortably, the residents have to decide on which offer to fully cover their wants. Such wants are such as a large free space for the family, self-controlled schedule, and model and material used in construction (Turpin and Sanchez, pg145). All these are services that can be obtained from either renting or buying a house in New England. Both alternatives have their advantages and disadvantages but all depends on whatever features an individual wants.

Literature review

Every product developed needs to meet customer requirements so that they can be comfortable using the products. Having a customer choose between buying and renting a house presents multiple challenges that would rather be addressed using factual processes. Quantitative analysis has to be taken into consideration in order to determine whether buying is cheap or expensive to renting using a multidimensional format of analyzing the preferred alternative. In this case, the use of Data Envelopment Analysis (DEA) is important as it applies the use of mathematical procedures in determining the best alternative for residential occupation (Turpin and Sanchez, pg145). DEA methodology provides a wide range of applications to solving most of the world problems which involves determining, for example, the cost invested in locating a new area to live. The DEA model is mostly applied in order to determine and compare between purchasing and renting a home. The main consideration is what value one gains from renting or buying a home.

Methodology

The DEA methodology is applied mostly as a decision-making strategy involving multiple suggestions to a similar task. Both the inputs and the outputs are highly considered in this section and certain mathematical steps are used to determine the efficiency of each alternative (Orkin, pg386). The cost of renting a home in New England, for instance in Massachusetts City ranges from $1,000 per month to $4,200 per month depending on the size of the house and the advantages it comes with. The cost of purchasing a house in the same city of Massachusetts ranges from $136,739 per month to about $500,000 per month also depending on which part of the city one chooses to live (Conner, pg269).

Data Analysis

There are a variety of ways to consider when looking for the best home and the DEA analysis method has provided a simpler way of determining which of these ways are effective. Comparing the cost, the price to pay, the short and long term benefits, rates, availability, and credit allowances are important. Availability of the homes for either rent or purchase in this specific area is assured but the number of individuals moving to this area has increased significantly, therefore, reducing the assured availability of space for occupation since the price will go up in no time. The cost of living in this particular area of New England is high and therefore the amount to be used in purchasing or renting is similarly very large. The rates also are very high since the economy in this area is more than half the national economy. The long-term benefits that can be obtained from living in a purchased home rather than renting are job assured (Orkin, pg386). The rate of landing a good and well-paying job in New England is high and a number of people have taken advantage of the situation, therefore, benefiting from living a self-contained and not a rental home.

Results

Comparing the cost of renting and purchasing a home, it is more likely to consider purchasing a home if one wants to enjoy the long term benefits of a home in New England. The prices vary accordingly since different regions have different advantages but considering our example of Massachusetts City, purchasing is advantageous to renting (Turpin and Sanchez, pg147).  The lowest price an individual can use in purchasing a home is $136,739. With this amount, there are other costs that are incurred while buying a home such as the government taxes, deposits, mortgage costs, leaseholders cost, the major upfront costs and many another cost. These costs vary according to the price of a house, for instance, the deposit for a $300,000 home is at least 20% the cost of the home and the transfer fee is close to $20,000 for the home. These costs are considerably high but the cost of renting is cheap since it only involves paying a one-time deposit at the beginning of the stay which is forwarded one month until one decides to change the house (Conner, pg237). Renting has its own advantage such as the reduced costs but a major disadvantage of being under the control of another who is the owner.

Conclusion

Using the DEA methodology in decision-making process proves to be beneficial as the best is chosen from a variety of options. According to this analysis, the benefits of renting considering the cost are high but the benefits of purchase are so great since privacy, self-control and other major benefits are assured.

Works cited

Turpin, Elissa R. and Sanchez, Adam. Phone Selection Through Data Envelopment Analysis.             Undergraduate Review, 11,

            144-147. 2015

            Available at: http://vc.bridgew.edu/undergrad_rev/vol11/iss1/26

Orkin, David. Nova Scotia. , 2013. Print.

Conner, Nancy. Buying a Home: The Missing Manual. Sebastopol, Calif: O'Reilly Media, 2010. Internet resource.