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acem
acem
Joined: 26 Feb 2009
Posts: 740
Location: Las Vegas
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 Posted: Sat Jul 24, 2010 5:06 am Post subject: Rent vs Buy spreadhseet |
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www.khanacademy.org/downloads/buyrent.xls
Fill in the variables according to your locale and estimations.
NPV (net present value) in green at the bottom. If it is positive that is how much you make by buying, if it is negative that is how much you lose by buying. |
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RikaKazak
ON THE COME BACK BITCHES!!!!
Joined: 08 Sep 2006
Posts: 7081
Location: saving money???
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| Posted: Thu Jul 29, 2010 3:15 am Post subject: |
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| Interesting...generally I like the 10 year rule. If you plan to live there (and rent is almost as much as what a payment would be) then buying > renting. (dave ramsey likes the 5 year rule) |
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acem
acem
Joined: 26 Feb 2009
Posts: 740
Location: Las Vegas
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| Posted: Thu Jul 29, 2010 6:04 am Post subject: |
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| Those rules are too simple and don't figure in everything. Five year rule sounds horrible unless you bought it at a price that it has a positive cash flow over rents and you aren't planning on selling. |
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RikaKazak
ON THE COME BACK BITCHES!!!!
Joined: 08 Sep 2006
Posts: 7081
Location: saving money???
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| Posted: Fri Jul 30, 2010 4:41 am Post subject: |
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| acem wrote: | | Those rules are too simple and don't figure in everything. Five year rule sounds horrible unless you bought it at a price that it has a positive cash flow over rents and you aren't planning on selling. |
I agree with the disagree on the 5 year rule...that's why mine is 10 years.
Generally it's accepted that 2 years appreciation = realators fee/taxes 2 years = mortgage fees + appraisial etc. So the 5th year is where you start to "make a little money" + you got the tax breaks.
But that hassle + time that you can own 2 places at once when moving + the fact that the price might go down not up etc. etc. is why I just rough guess it and say 10 years. I admit though, if you REALLy want to know there's better ways to figure it, but usually if it's "close" I say rent...cause buying/selling places is a BITCH with big headaches ;) |
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