Rent vs. Buy Calculator
Rent vs. Buy Calculator is a tool to check whether it is better to buy or rent a house. The should I buy or rent a house tool will let you know which will save you money.
Please enter a home value greater or equal to $50,000
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Sometimes renting might be a cheaper option when you are only planning to stay for a short period of time. In the long run, real estate market tends to appreciate.
If you are planning to stay in a city for a long time and you can afford to buy a house, then buying a house may be a better option.
Following is a chart that shows you how much your home will grow in value based on an annual appreciation rate of 4% - 6%.
One of the most important decisions for many families and individuals is to decide whether it is better to buy or rent an apartment or house.
There are pros and cons of rent vs. buy. Here are some of the factors to consider when you are looking for your next place to live.
Pros of Renting
- Low upfront cost - The initial costs are much lower compared to buying a house as all you need is a security deposit and the first month of rent payment.
- More flexible - It is much easier to move around renting an apartment rather than dealing with buying and selling a house each time you move.
- Less headache - Landlords have to deal with house maintenance, fixes, and renovation of the house. Tenants don't have these headaches.
Cons of Renting
- No equity - Since the house isn't yours, you are not building equity in the house. Once you move to a different place, the rent you pay throughout the years is gone forever.
- No control - Once your lease is ended, both the landlords and you will decide whether to decide to renew the lease. If you like the place and rent price, but if the landlord does not renew your lease, you will be forced to move.
- Rent increase - Landlords are free to increase the rent during renewals or throughout the lease terms. You will either need to pay more money to live in the same place or find a new apartment.
Pros of Buying
- Building home equity - You are building home equity each month when you pay you make your mortgage payments. Usually, home value appreciates over time so your net worth grows with the rise of your home.
- Stability - It's your home and as long as you make your mortgage payments and property taxes on time, no one will force you to move.
- Tax benefits - The interest payments on your mortgage are tax deductible which means you will save some money on your taxes.
Cons of Buying
- More upfront costs - The upfront costs for buying a house are much larger as you will need a sizeable amount for a down payment, closing costs, and other renovation costs if applicable.
- More responsibilities - As a landlord, you will need to deal with the headaches of maintaining your house.
- Less flexible - Once you buy a house, you are less flexible if you want to relocate or move from place to place. You will need to deal will buyers and real estate agents if you want to sell your house and move to a different place. Depending on the market condition, you may also end up losing money on your house if you don't allow enough time for your home to appreciate.
At the end of the day, you will need to make your own decision whether it makes more sense to rent or buy at any point in your life.