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Buy Vs Rent

The document outlines the costs and financial projections of buying a house versus renting over a 10 year period. It includes inputs like purchase price, down payment, loan amount, interest rate, and projected expenses, rents, property value, and equity when buying. When renting, it shows projected rent expenses and investment returns from not having to make a down payment. It notes some considerations like needing at least 20% down to avoid mortgage insurance and being disciplined about investing the difference in costs between buying and renting.

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nstomar
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72 views4 pages

Buy Vs Rent

The document outlines the costs and financial projections of buying a house versus renting over a 10 year period. It includes inputs like purchase price, down payment, loan amount, interest rate, and projected expenses, rents, property value, and equity when buying. When renting, it shows projected rent expenses and investment returns from not having to make a down payment. It notes some considerations like needing at least 20% down to avoid mortgage insurance and being disciplined about investing the difference in costs between buying and renting.

Uploaded by

nstomar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Input Variables

Purchase price Insurance


Down payment Repairs/Maintenance
Loan amount $ - Property tax
Interest rate (Fixed) Initial monthly rent
Loan maturity (years) Property appreciation
Mortgage Payment #NUM! Expense growth (RM&INS)
Closing costs $ - Rental growth rate
Holding period (years) Investment opportunity
Selling expenses Marginal tax rate

Option 1: Buy the house

Year 0 1 2
Out flows
Down payment + Origination $ -
Insurance & Maintenance $ - $ -
Property tax $ - $ -
Mortgage payments #NUM! #NUM!

Total: $ - #NUM! #NUM!

In flow
Tax benefits $ - Err:502 Err:502

Net cash out flow $ - #NUM! #NUM!

Other
Interest payment Err:502 Err:502
Principal payments #NUM! #NUM!
House value $ - $ - $ -
Loan Balance $ - #NUM! #NUM!
Total equity $ - #NUM! #NUM!

Cash at time sold

Option 2: Rent the house


Rent expenses $ - $ - $ -

Extra Cash from not buying $ - #NUM! #NUM!

Investments portfolio $ - #NUM! #NUM!


A few things to consider:
- Down Payment - less than 20% you will need to factor in Mortgage insurance premium which will hurt the b

- Choosing to rent, you need to be discipline and invest the difference every month. If not, you will definitely

- Pro to buying, you don’t need to worry about a landlord, remodel the home to your pleasing, and helps you
your mortgage payments go towards your equity (a portion).
urance $ -
pairs/Maintenance $ -
perty tax $ -
tial monthly rent
perty appreciation
ense growth (RM&INS)
ntal growth rate
estment opportunity
rginal tax rate

3 4 5 6 7 8 9 10

$ - $ - $ - $ - $ - $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ -
#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

Err:502 Err:502 Err:502 Err:502 Err:502 Err:502 Err:502 Err:502

#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

Err:502 Err:502 Err:502 Err:502 Err:502 Err:502 Err:502 Err:502


#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!
$ - $ - $ - $ - $ - $ - $ - $ -
#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!
#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

#NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

$ - $ - $ - $ - $ - $ - $ - $ -

#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!

#NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM! #NUM!


surance premium which will hurt the buy choice.

every month. If not, you will definitely be behind.

home to your pleasing, and helps you invest since

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