Should I Rent or Should I Buy?

RENT ACCUMULATION CHART

What you pay over time to someone else if you rent:

Per Month

10 Years

15 Years

20 Years

25 Years

30 Years

$750

$153,634

$310,853

$569,527

$995,125

$1,695,366

$800

$163,876

$331,576

$607,495

$1,061,467

$1,808,390

$900

$184,360

$373,023

$683,432

$1,194,150

$2,034,439

$100

$194,603

$393,369

$759,369

$1,326,833

$2,260,488

$1,200

$245,814

$497,364

$911,242

$1,592,200

$2,712,585

$1,400

$286,783

$580,259

$1,063,116

$1,857,567

$3,164,863

$1,500

$307,267

$621,705

$1,139,056

$1,990,250

$3,390,731

$1,700

$348,236

$704,599

$1,290,927

$2,255,616

$3,842,828

$2,000

$389,206

$786,738

$1,518,738

$2,653,666

$4,520,976

$2,200

$450,658

$911,834

$1,670,612

$2,919,034

$4,973,074

$2,500

$486,508

$983,423

$1,898,423

$3,317,083

$5,651,220

To the right is a comparison of $1,200 per month in rent

SHORT TERM - MONTHLY SAVINGS

versus a $200,000 purchase, with a 5% down payment,

Rent

Buy

an annual gross income of $60,000, filing married joint,

Monthly Payment

$1,200

$1,528

for a period of 5 years.

Average Tax Savings

$0

$403

Assumptions used in this calculation:

After-Tax monthly payment

$1,200

$1,125

Annual inflation rate = 3%

Annual property appreciation rate = 4%

LONG TERM - TIME IN THE HOUSE

Annual rent increase = 5%

Rent

Buy

Alternative investment rate = 6%

Total Cost over the next 5 years

$88,627

$42,625

Annual property tax rate = 1.5% of the purchase price

Annual hazard insurance = .325 of the purchase price

Annual cost of general maintenance and repairs = 1% of the purchase price