While more people are renting in recent years due to various economic and household situations, home ownership is still a financial goal for many. A financial comparison between renting and buying often overlooks various factors. An online calculator may be used to consider buying items such as the opportunity cost of investing your down payment (along with the taxes on capital gains), condo or home association fees, maintenance costs, and, of course, the tax benefits of property taxes and mortgage interest. On the rental side, the calculator considers initial costs (such as a security deposit and any broker’s fee) along with the opportunity costs of the initial costs and recurring costs, such as renter’s insurance.
For additional information on calculating the renting vs. buying your home, click here.
- Have students ask people to describe factors that affected whether they own or rent their housing.
- Have students conduct a personal financial analysis for renting and buying a place to live.
- What are benefits and drawbacks of renting and buying a place to live?
- Describe financial factors that might be overlooked when comparing renting and buying a place to live.