Rent vs Buy Calculator
Compare the costs of renting vs buying over time
Cost of buying
$300,000.00
Cost of Renting
$250,000.00
Net Difference
$50,000.00
Home Equity
$100,000.00
Investment Equity
$60,000.00
User Guide for Rent vs. Buy Calculator
This calculator helps you compare the long-term financial impact of renting versus buying a home. Here's how to use the tool and a breakdown of the basic concepts:
Inputs:
- Home Purchase Price: The price of the home you plan to buy.
- Down Payment: The upfront payment you're making toward the home purchase. This amount reduces the loan you need to take out.
- Mortgage Interest Rate: The annual percentage rate (APR) you’ll pay on your mortgage loan. Typically, a lower rate means lower monthly payments.
- Loan Term: The number of years you plan to take to repay the loan (e.g., 30 years is typical for a fixed-rate mortgage).
- Property Taxes: Yearly taxes you’ll pay based on the home’s value.
- Home Insurance: Annual insurance cost for protecting your home against potential damages.
- Maintenance Costs: Estimated annual maintenance expenses, such as repairs or updates.
- HOA Fees: If applicable, monthly Homeowners Association fees for shared amenities and services.
- Monthly Rent: Your current or expected monthly rent payment.
- Annual Rent Growth Rate: The expected annual increase in your rent payment (e.g., 3%).
- Renter's Insurance: The yearly insurance cost for renting.
- Investment Period: The number of years you plan to compare (e.g., 10 years).
- Annual Investment Return: Expected return on investments like stocks or savings, where the money you'd otherwise spend on buying a house might be invested.
- Home Price Appreciation: The percentage by which you expect your home’s value to increase annually.
Outputs:
- Total Cost of Buying: The cumulative cost of buying, including mortgage payments, taxes, insurance, maintenance, and any HOA fees.
- Total Cost of Renting: The total amount spent on rent and renter’s insurance over the investment period.
- Net Difference: This compares the total cost of buying versus renting. A positive number indicates buying is more favorable, and a negative number shows renting costs less.
- Equity Built: The value of your ownership in the home after subtracting the remaining mortgage balance. This grows as you pay off the loan and as the home's value appreciates.
- Investment Growth: The amount your down payment and other initial funds could grow if invested instead of being used to purchase a home.
Buttons:
- Calculate: After filling out the form, click this button to see the results and chart comparing renting versus buying.
- Reset: Clears all inputs and resets the form.
Chart:
The chart provides a visual comparison of the total costs of buying and renting over the selected period. It helps quickly assess which option may be more financially advantageous based on the inputted values.
Basic Concepts:
- Mortgage: A loan used to buy a property, typically paid back over 15–30 years with interest.
- Equity: The portion of the home you own outright. Over time, as you pay off your mortgage and your home appreciates, your equity increases.
- Renting vs. Buying: Renting is often cheaper in the short term, but buying can be beneficial long-term as you build equity and the home's value appreciates.
- Investment Returns: Money that could be invested in other assets (like stocks) instead of buying a home. The comparison between rent savings and investment returns is important when deciding whether to rent or buy.
This calculator helps you visualize how these costs evolve over time to guide your decision on whether buying or renting is the better financial choice.
Want more than calculators?
Create a Picket account and get access to the advanced tools used by pro real estate investors.
Try PicketFree Calculators
From mortgage planning to investment strategies, Picket's free tools provide the insights you need to make informed financial decisions.
Mortgage Calculator
Estimate your monthly mortgage costs with accuracy. This tool helps you calculate your mortgage payments, including property taxes, insurance, PMI, and optional extra payments, so you can plan your finances confidently.
Calculate MortgageBRRRR Calculator
Evaluate your Buy, Rehab, Rent, Refinance, Repeat (BRRRR) strategy. Understand the cash flow, total investment, and cash-on-cash return for your BRRRR properties, empowering you to maximize profits through strategic real estate investing.
Evaluate BRRRRFix and Flip Calculator
Project your profits and returns from house flips. Use this calculator to generate detailed profit forecasts, return on investment (ROI), and cash-on-cash returns for your fix-and-flip projects, helping you make smart financial decisions.
Calculate Fix & FlipRent vs Buy Calculator
Compare the long-term costs of buying vs. renting. Use this calculator to evaluate whether buying or renting a home makes more financial sense for you. Factor in property appreciation, rent increases, and other key variables to make an informed decision.
Compare Rent vs BuyReal Estate Wholesaling Calculator
Quickly estimate your assignment fees, acquisition costs, and expected profit on real estate wholesale transactions. This tool helps you determine if a wholesale deal is worth pursuing, maximizing your profit margins.
Calculate WholesalingRental Property Calculator
Evaluate the profitability of your rental investments. Analyze rental income, expenses, cash flow, and return on investment (ROI) for your rental properties. This tool helps you make data-driven decisions to optimize your rental portfolio’s performance.
Evaluate Rental Property70% Rule Calculator
Quickly assess potential fix-and-flip deals. Use the 70% rule to calculate the maximum price you should pay for a property to ensure profitability after repairs. This tool helps you evaluate whether a deal meets the industry-standard formula for successful flips.
Apply 70% Rule1031 Exchange Calculator
Estimate the tax deferral benefits from doing a 1031 exchange, allowing users to compare the long-term financial impact of deferring capital gains taxes on investment properties.
Calculate 1031 ExchangeDepreciation Calculator
Calculate property depreciation over time to understand the tax benefits of owning a rental property and how it impacts your annual tax filings.
Calculate DepreciationHouse Hacking Calculator
Evaluate the benefits of house hacking by calculating how living in part of the property and renting out the rest can offset housing costs and boost ROI.
Calculate House HackingRenovation Estimator
The Renovation Cost Estimator helps homeowners and contractors calculate renovation expenses by entering details like square footage, number of rooms, material quality, labor rates, and fees.
Estimate renovation