15-Dec-08 NEW: Buy Or Rent Calculator
There are many reasons to buy or rent a house, but this calculator looks at the financial side.
It forces you to really think about the commitment you are making.
You also need to make realistic assumptions in order to make the correct decision.
In the years of 10% annual house price rises, it was a no-brainer to buy, leverage, and buy again. Now the equation is different.
Hope this calculator makes people think a bit! I wrote it for myself originally (as a "sell to renter"), but would like to share it out, and appreciate any feedback.
It might appear a bit tricky for someone new to finance, but if you're a financial advisor, this could be a valuable marketing tool
- Enter your own values
- Make your own market assumptions
- Use at your own risk !
More Property Calculators
Data:
Wealth Diff Graph:
Intoductory Training Video:
Worked Example:
Advanced Training:
Enter your own values, make your own market assumptions, and use at your own risk !
IMPORTANT: Worried about SECURITY? Open Excel in SAFE MODE
| Attachment | Size |
|---|---|
| Buy-Or-Rent-Zero-Values.xls | 89 KB |
| Buy-Or-Rent-Example-Values.xls | 89 KB |
Enhancements
Hi Nick,
Very useful spreadsheet. Some possible enhancements:
1. I'd also like to have the option of a repayment mortgage rather than interest only.
2. Show mortgage monthly repayment cost for information
I realise you've probably got better things to do than maintain these spreadsheets so perhaps you could give out the sheet protection password?
Thanks
Great Information
I think that renting was commonly thought of as "throwing money away" in the past; however, the volatile state of our economy is pushing more people to rent. In Delaware, even some homeowners are packing up and moving into rental properties in order to save some money. The fact that they can save money will ensure that they can become homeowners again when the markets rebound. I think more people should consider this option instead of staying in a house they can't afford. Most times this causes foreclosure and can actually decrease your chances of homeownership in the future.
rate of return
Thanks for those answers.
For my circumstances I might as well stay in rented for 9 more years ! Think the desire to make changes and make it our own will mean we buy next year though.
Buy vs Rent Calculator
The ability to add value to the place is a good enhancement I could add.
Maybe I can even add in the pleasure you get from being in complete control of your own house.
Thanks for the feedback