Rent vs Buy Worksheet
Run it three times: your appreciation guess, then 0%, then 5%. If the answer flips, the financial case is a tie.
BFCBrilliance · bfcbrilliance.com/tools/rent-vs-buy-calculator
The comparison
- Date
- Home price
- Deposit
- Rate
- Term
- Years staying
- Rent
- Rent growth
- Appreciation
- Investment return
- NET COST BUY
- NET COST RENT
- ADVANTAGE
The assumptions and what they do
- ⚠ The answer is decided by
- assumptions, not arithmetic
- ⚠ Appreciation
- NOBODY KNOWS. Test 0% and 5%
- At 3%/yr a $350k home gains
- $80,456 over 7 years
- Which is
- 20x the advantage figure
- Buying costs
- about 3%
- Selling costs
- about 6%
- Round trip
- about 9% before anything else
- So short stays
- favour renting almost regardless
- Maintenance rule of thumb
- 1% of value per year
- ⚠ Maintenance arrives as
- a roof, not a monthly bill
- ⚠ The renter's deposit
- EARNS — leaving it out rigs the answer
- Not modelled
- PMI, tax deduction, HOA, moving costs
- Also not modelled
- everything that actually decides it
Run the sensitivity
| Appreciation | Years | Net buy | Net rent | Who wins |
|---|---|---|---|---|
Before you trust the number
- Property tax looked up for the actual area
- Insurance quoted, not guessed
- HOA or service charge added if there is one
- PMI considered if the deposit is under 20%
- Maintenance budgeted as a lump, not a smooth cost
- Rent growth checked against the local market
- Investment return set honestly — 0 if it would sit in cash
- Appreciation tested at 0% as well as your guess
- Years tested at both ends of how long you might stay
- Moving costs remembered on the rent side too
- The non-financial reasons written down separately
The margin IS the appreciation
A $350,000 home at 3% gains $80,456 over seven years, and the advantage figure is a few thousand. The entire answer rests on the one input nobody can forecast. Test it at 0%.
Nine percent, round trip
About 3% to buy and 6% to sell, paid up front, before appreciation or principal repayment have had any time to work. That is why buying loses over short horizons almost regardless of the market.
Give the renter their deposit back
A renter holds an un-spent deposit that can be invested — $32,772 over seven years on these defaults. Omitting that is the commonest way this comparison gets quietly rigged.