# 15-Dec-08 NEW: Buy Or Rent Calculator

There are many reasons to buy or rent a house, but this calculator looks at the financial side.

It forces you to really think about the commitment you are making.

You also need to make realistic assumptions in order to make the correct decision.

In the years of 10% annual house price rises, it was a no-brainer to buy, leverage, and buy again. Now the equation is different.

Hope this calculator makes people think a bit! I wrote it for myself originally (as a "sell to renter"), but would like to share it out, and appreciate any feedback.

It might appear a bit tricky for someone new to finance, but if you're a financial advisor, this could be a valuable marketing tool

• Make your own market assumptions
• Use at your own risk !

Data:

Wealth Diff Graph:

Intoductory Training Video:

Worked Example:

AttachmentSize

### Other Costs

Can you tell me what the "Other Costs" components are in the spreadsheet?

Thanks,

Glenn

### Question Regarding an Time Frame of Calculations

First off, thank you very much for providing such and excellent resource that allows the consumer to become more educated. This is hands down the best Rent vs Buy calculator on the net!

I have a couple questions regarding one of the built in assumptions:
1) At what point in time do the per annum values represent? Ex. Does the \\\"Buy Wealth\\\"\\\" after 6 years represent the wealth at the conclusion of the 52nd wk of the 6th year, or does it represent the value at day 1 of the 6th year?

I am assuming the latter as, the wealth value listed under year 1 is equal to the amount of initial capital.

2) What I am try to evaluate is my wealth at the conclusion of 6 years, at which time I will be selling and moving. What should I enter under \\\"I\\\'ll probably move in X years.\\\" It appears as though, if I place 6, then the selling costs are not included in the \\\"Year 6 Wealth value.\\\"

One suggestion, would be to provide a table similar to the ratios, that provides the calculated values broken down monthly.

Thank you for clarifying. And once again, thank you for the excellent resource. I certainly will be coming to you if I need any made to order spreadsheets.

Brett

### 1. 1 = end of year 1..2 = end

1. 1 = end of year 1..2 = end of year 2.. etc..

2. enter 6 if you plan to move every 6 years.. but yes, I agree with you, the calcualtor assumes that the impact of wealth is accounted for in the next year.

in this case enter 5.. all it does is change when that cost is allocated... your results will be adjusted appropriately as long as your time horizon is less than 10.

### Thank you very much for the

Thank you very much for the prompt reply.

### Excellent Product Based on a Significant Amount of Work!

I wiill be back to purchase some of your products and tutorials.

Jim in DC

Thanks for making this available and how come there is no slot for opportunity cost of mortgage deposit. If I can get 6% in the bank v buying a house it is significant?. Cheers. Martin

### Use the "Post Tax Investment

Use the "Post Tax Investment Rate" field..

### What about a capital+interest mortgage?

Great spreadsheet, but I want to be able to assess whether to rent or buy on the assumption that I get a capital and interest mortgage, and which then factors in the fact that I will own X% of the value of the house after Y years.

Is that possible with this spreadsheet?

Great spreadsheet but a few questions:
1. Why does the rent go up by 60% in year 13.
2. Be good to see this compared to repayment mortgage as that is my plan (sold to rent, plan to buy 2010).
3. Extra income of £100,000 in yr 15 - many wont notice this so best to remove from downloaded example ?
4. The maint charge is that applied to purchased house only - would expect that.

Thanks