Excel Model: Buy or Rent Calculator

Title: Buy or Rent Calculator

 Description:

 

This spreadsheet helps users decide whether to buy or rent a property by comparing the costs and benefits of each option over a specified period. It includes sections for entering assumptions, summarizing costs, and detailed monthly mortgage calculations.

 

  • Assumptions and Summary: Enter key assumptions for renting and buying scenarios, including initial costs, rates, and property details. The summary provides a comparison of the total costs and savings for both scenarios.
  • Monthly Mortgage Calculation: Detailed monthly breakdown of mortgage payments, including principal, interest, maintenance, property tax, insurance, and other expenses.

 

Advice/Tips:
  • Assumptions and Summary:
    • Ensure all assumptions are accurate and reflect your financial situation.
    • Regularly update the assumptions as market conditions change.

  • Monthly Mortgage Calculation:
    • Review the monthly mortgage calculations to understand the distribution of expenses.
    • Use the monthly breakdown to plan your budget and manage cash flow.

 

Source: Custom Calculator

Click the following icon to open the full workbook viewer in a new tab, allowing you to easily edit and save.

Click the following icon to download the spreadsheet, allowing you to save the file on your computer along with edits.

Example of using calculator:

Detailed example of using Spreadsheet: Tasks for user to complete:

 

  1. Assumptions and Summary Section:
    • Enter key assumptions for renting and buying scenarios.
      • Example values: Initial Monthly Rent – $2,100, House Purchase Price – $510,000.

  2. Monthly Mortgage Calculation:
    • Enter details for monthly mortgage payments.
      • Example values:
        • Mortgage Interest Rate: 3.49%
        • Maintenance %: 1.10%
        • Property Tax %: 0.86%
        • Insurance %: 0.23%
        • House Appreciation: 2.00%

Why is interactive calculator useful:

This spreadsheet consolidates all information related to buying and renting in one place, making it easier to compare the financial implications of each option. By providing a clear view of costs and potential savings, it helps users make informed decisions about their housing strategy.

 

Source: Custom Spreadsheet

Conclusion:

The Buy or Rent Calculator is an invaluable tool for evaluating the financial implications of buying versus renting a property. By providing a detailed and organized approach to recording and analyzing housing costs, it helps users achieve financial stability and make informed decisions about their housing strategy. Regular updates and reviews ensure that the strategy remains aligned with changing market conditions and financial goals.

Previous Lesson
Back to Course
Next Lesson

Leave a Comment