Buy or rent
Model ownership, rent, transaction costs, investment returns and an earlier-than-planned move.
Illustrative model · Your assumptions stay in this browser tab
Higher modeled wealth at horizon
Rent$21,932 difference at year 10.Buy path at year 10
$341,296Rent path at year 10
$363,228Earlier move, year 4
-$49,578Buy minus rent; a separate scenario, not a likelihood.Annual buy-versus-rent paths
All amounts in US dollars unless shown otherwise.
| Year | Buy housing cost (USD) | Rent cost (USD) | Cumulative buy outlay (USD) | Cumulative rent (USD) | Home sale equity (USD) | Buyer investments (USD) | Renter investments (USD) | Buyer wealth (USD) |
|---|---|---|---|---|---|---|---|---|
| 1 | $51,941 | $38,400 | $196,941 | $38,400 | $112,087 | $0 | $165,791 | $112,087 |
| 2 | $52,316 | $39,552 | $249,257 | $77,952 | $133,945 | $0 | $186,845 | $133,945 |
| 3 | $52,702 | $40,739 | $301,959 | $118,691 | $156,611 | $0 | $208,151 | $156,611 |
| 4 | $53,100 | $41,961 | $355,060 | $160,651 | $180,120 | $0 | $229,698 | $180,120 |
| 5 | $53,510 | $43,220 | $408,569 | $203,871 | $204,513 | $0 | $251,473 | $204,513 |
| 6 | $53,932 | $44,516 | $462,501 | $248,387 | $229,833 | $0 | $273,462 | $229,833 |
| 7 | $54,367 | $45,852 | $516,868 | $294,239 | $256,123 | $0 | $295,650 | $256,123 |
| 8 | $54,814 | $47,227 | $571,683 | $341,466 | $283,429 | $0 | $318,020 | $283,429 |
| 9 | $55,276 | $48,644 | $626,958 | $390,110 | $311,803 | $0 | $340,553 | $311,803 |
| 10 | $55,751 | $50,103 | $682,709 | $440,213 | $341,296 | $0 | $363,228 | $341,296 |
How this tool calculates the result
The renter invests the buyer's initial down payment plus purchase closing costs. Each year, whichever path has the lower housing outlay invests that year's difference at the entered return. Buyer wealth equals after-cost home sale equity plus buyer investments. Rent wealth equals renter investments. Annual payments and costs are assumed at year-end for investment timing. Taxes, rent deposits, moving costs, tax deductions, maintenance surprises and investment volatility are excluded. Earlier move is a scenario, not a probability.