Assuming two identical homes Is it better to buy or rent ?
Buying Costs = Monthly Payment + Property Tax + Maintenance + Insurance + HOA Dues + PMI + Loss of Earnings from Down Payment + Selling Costs - Home Appreciation - Income Tax Savings (all amounts are annualized accumulations).
Rent Costs = Monthly Rent + Annual Rent Increase - Earnings from Down Payment not used (all amounts are annualized accumulations).
Buying Calculation - All items should be entered without commas, percent or dollar signs Purchase Price - (i.e. 750000 ). Down Payment - Your invested cash (i.e. 150000 ). Interest Rate - Loan interest rate (i.e. 4.25 ). Number of Years - Loan duration(i.e. 30 ). Annual Home Apprecation - Percentage of home value increase (i.e. 2 ). Property Tax - 1.25 is typical (i.e. 1.25 ). Annual Maintenance - Based on home condition (i.e. 3600 ). Hoa Dues - optional monthly amount (i.e. 475 ). Annual Home Insurance - Insurance required by lender(i.e. 1500 ). PMI - If required by lender. 0.5 is typical(i.e. 0.5 ). Selling Costs Percent - Real Estate and other selling costs (i.e. 6 ).
Renting Calculation Rent - Monthly Rent (i.e. 2800 ). Annual Rent Increase - Percent rent increases each year (i.e. 2 ). Expected Annual Return on Cash Percent - The interest percent on your Down Payment if not used(i.e. 3 ). Income Tax Bracket - Marginal tax bracket for income tax. (i.e. 30).