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
- Enter your own values
- Make your own market assumptions
- Use at your own risk !
More Property Calculators
Data:
Wealth Diff Graph:
Intoductory Training Video:
Worked Example:
Advanced Training:
Enter your own values, make your own market assumptions, and use at your own risk !
IMPORTANT: Worried about SECURITY? Open Excel in SAFE MODE
| Attachment | Size |
|---|---|
| Buy-Or-Rent-Zero-Values.xls | 89 KB |
| Buy-Or-Rent-Example-Values.xls | 89 KB |
- Add new comment
- 10268 reads
Rent vs buy
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
Buy vs Rent Calculator
Glad you like the Buy vs Rent Calculator...
I have some answers:
1. The data that is on the sheet is intended for illustration purposes only. It does not accurately reflect the market or your personal circumstances.
You might want to take a look here for some price predictions:
http://www.houseprices.uk.net/articles/house_price_predictor/
2. Initially at least, I want to keep the calculator simple, and the main decision is whether to buy or rent, and the wealth implications of this. The type of mortgage (repayment or interest only) doesn't affect this decision as much as the other factors, so I have left it out. If enough people request it, I'll put it in.
3. See answer 1.
4. The best way to get a feel for this calculator is to enter big numbers into each field. That way you can immediately see what it affects. In this case, yes, maintenance affects only the house owners.
Try 20%..
; - >
rate of return
Thanks for those answers.
For my circumstances I might as well stay in rented for 9 more years ! Think the desire to make changes and make it our own will mean we buy next year though.
Buy vs Rent Calculator
The ability to add value to the place is a good enhancement I could add.
Maybe I can even add in the pleasure you get from being in complete control of your own house.
Thanks for the feedback
Excellent post thank you very
Excellent post thank you very much for taking the time to share with those who are starting on the subject. Greetings
