 Current Market Conditions
Rent Vs Buy Comparisons The Real Deal The rent vs. buy comparison is a lot like any financial planning, the outcome is a guess on the future direction of rents, equity growth and carrying costs. In other words, predicting multiple variables in an uncertain future. A rent or buy comparison can never secure the best financial move, but it can point the buyer to how future equity increases and cost cap assumptions work in tandem to cover the costs of owning: including the down payment, property taxes, insurance and maintenance. The Rule Of Twenty A simple way to look at the rent ratio is to take the purchase price and divide by the annual cost of renting a similar property. 20 is considered a useful rule of thumb. If you do the math, a ratio above 20 means you should at least consider renting. When the ratio is well below 20, the case for buying becomes a lot stronger. Of course, these are simplified tools to help you make a decision. you should never use the online buy Vs rent calculators to rest your decision on. Best to use them to understand what cost parameters and equity assumptions you need to make it work. Think of these financial variables as levers and toggle them to tease out an understanding of how your assumptions work impact the purchase decision. REsourced fromhttp:// www.yourpropertypath.com www.yourpropertypath.com You may republish this article, as long as you do not edit and you agree to preserve all links to the author and www.yourpropertypath.com
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