Buy vs rent scenario
Buy vs rent for a condo with high fees
Condo fees, rising yearly, and a special-assessment allowance reduce the advantage of owning.
After 10 years, buying finishes ahead of renting by about $18,006. On these assumptions buying overtakes renting after about 6.9 years, once selling costs are counted.
Year-by-year results for this scenario
After 10 years, buying finishes ahead of renting by about $18,006. On these assumptions buying overtakes renting after about 6.9 years, once selling costs are counted. The owner's first-month cash cost is $2,952, compared with $1,925 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $434,700 | $328,512 | $81,734 | $107,647 | −$25,913 |
| 2 | $449,914 | $320,684 | $104,226 | $125,960 | −$21,733 |
| 3 | $465,662 | $312,499 | $127,589 | $145,033 | −$17,444 |
| 4 | $481,960 | $303,942 | $151,856 | $164,905 | −$13,050 |
| 5 | $498,828 | $294,996 | $180,382 | $185,616 | −$5,234 |
| 10 | $592,451 | $243,773 | $321,295 | $303,289 | $18,006 |
Questions people ask
Does buying beat renting in this scenario?
After 10 years, buying finishes ahead of renting by about $18,006. On these assumptions buying overtakes renting after about 6.9 years, once selling costs are counted.
What changes in this scenario?
Condo fees, rising yearly, and a special-assessment allowance reduce the advantage of owning. All other inputs keep the calculator’s default planning values.
Is this a forecast?
No. It is an illustration of how one assumption changes the buy vs rent comparison. Replace the inputs with your own numbers.
Other buy vs rent scenarios
- 5% down, 30-year amortization
- 20% down, ten years
- Five-year stay
- Seven-year stay
- Fifteen-year stay
- Full amortization
- Rates at 6.5%
- Rates at 3.5%
Educational illustration; not advice. See the assumptions.