Rent vs. Buy Calculator
The choice between renting and buying a property has always been of great debate among many on a global scale. Most people are known to make such decisions based on their own personal judgment or on the basis of what is circulating the market. Unfortunately, what most people don't realize is that with a few mathematical calculations, one can easily work out whether or not they should rent or buy a property. The only reason most people tend to avoid this option is because trying to calculate such figures for yourself can prove to be quite difficult. If you were to seek professional advice, that in it self would cost a fortune for something that can simply be provided for free.
This is where the rent vs. buy calculator is of such importance. This particular calculator has been devised to help individuals make the correct informed decision as to whether or not they should buy or rent a particular property. The rent vs. buy calculator requires one to enter certain information in four different steps. The type of information that is required includes the cost of rent on a monthly basis, the percentage increase on an annual basis, the mortgage loan for a house, other costs related to a house and the list goes on. Based on all this information, the calculator is able to provide you with a detailed explanation of which decision would suit you best. All of this would be based on your income as well.
SAMPLE: If you were to pay $800.00 per month, for example, and the average rental payment increase was 4.000%, you would pay $51,996.70 in a 5 year period toward rent. If you purchased a home and borrowed $250,000.00 with a 5.000% interest rate, and you paid $900.00 every year toward its maintenance, you would pay $110,752.41 in a 5 year period toward mortgage payments if your Federal tax rate is 26.000%, you pay $3,000.00 in taxes each year and your annual insurance rate is $1,500.00.
When you consider your tax benefits and the appreciation of your home, however, you will actually SAVE money by purchasing a home. If your home shows an annual appreciation of 5.000% and your selling cost is 7.000%, your house appreciation value will be $382,884.47. As a result, your total home purchase benefit will amount to $72,305.01.
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