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Health & Fitness

Rent Vs. Buy - Here's a quick formula to help you decide!

Here’s a quick formula that you can use to help you figure out whether it’s better to buy or rent, which works with any duration of ownership (1 year, 5 years, etc)

Calculate: Seller and Buyer Agent Fees When You Sell + Purchase Price You Paid + Maintenance Cost for the Time of Occupancy + Interest Paid on Mortgage for the Time of Occupancy + Investment Gains from Your Down Payment + Property Taxes + Closing Costs – Selling Price. This number could come out negative or positive, but if it’s lower than the rent you would have paid during the same time frame, then you would be better off buying. If the number is higher, meaning that the selling price wasn’t high enough to cover all those costs, then renting would be the more cost-effective choice.

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