Should I Rent or Should I Buy ? ?

SHOULD I RENT OR OWN A HOME ANALYSIS?

Somewhat surprisingly, people often ask this question.  As a Real Estate Consultant the question seems somewhat rhetorical, but people need to decide for themselves.  Here is a analysis table comparing renting versus renting.

 This example cites a $299,000 condo with 25% down payment 3 year term at 2.99 % mortgage interest rate.

Monthly Rent: $			No. of Years you plan on keeping the home:
Annual Rental Increases:	%		Yearly Appreciation on the Home:  %
Monthly Renter Insurance:	$		Annual Home Maintenance: %
Savings or Investment Rate:	%

 

Your Results

Your customized Rent versus Owning analysis is based upon: An initial monthly rental payment of $1,000.00. We assume that your rent will increase by 2.5% per year. You are considering buying a home valued at $299,000.00, with a down payment of 25.08% or $75,000.00. Your monthly mortgage payment of $930.27 includes both principal and interest and is based upon a loan amount at an interest rate of 2.9%. (current 3 year term )

Summary:  By buying your home versus renting you will have saved $93,040.76 over the next 5 years.  (Net Appreciation - Total Investment Return + Total Rental Payment - Total Mortgage Payment)

Breakdown of this Analysis: Total Rental Payment: $64,875.94   Total Mortgage Payment: $67,776.40 Down Payment: $75,000.00   Home Value: $381,608.19 Interest Earned: $11,945.55   Remaining Loan Balance: $198,721.41 Total Investment Return: $86,945.56   Net Appreciation: $182,886.78

$93,000 is a lot of money for anyone to lose out on.

You can play around with various scenarios using the link below:

http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca01821.html