Rent vs Buy Calculator
A simplified, honest version of the classic comparison: years of rent totalled against the full net cost of owning — with everything this version leaves out printed on the page.
Simplified on purpose: excludes opportunity cost on the down payment, income-tax deductions, renters insurance, and moving costs. Those exclusions are the methodology — read them before the answer.
A SIMPLIFIED MODEL — READ THE METHODOLOGY. This comparison EXCLUDES: investment opportunity cost on the down payment, income-tax deductions, renters insurance, and moving costs. National tools model those with pages of assumptions; this page leaves them out and says so, which makes it a cleaner first pass and a worse final answer. Education only — not financial advice.
How the math works
Rent path: monthly rent × 12, grown yearly at your rent-growth rate, totalled over the horizon. Buy path: down payment + buying costs + every year of mortgage payments, property tax (assessed value grown at the Prop 13 2% cap — not at appreciation, because that is how California actually bills it), insurance, and maintenance — minus the net sale proceeds at the horizon (appreciated value − selling costs − remaining loan balance). The equity you built is a negative cost; the appreciation assumption that creates it is yours, printed, and the most dangerous input on the page.
A worked example
Seven years: renting at $2,800/mo growing 3% totals $257,459. Buying at $650,000 with 20% down at 7%, 3% appreciation, and a 6% sale cost: $551,824 of cash out, $277,486 of net sale proceeds after paying off the $473,967 balance — a net cost of $274,337. At year seven, renting is ahead by about $17,000 under these assumptions; move appreciation to 4% or the horizon to ten years and the answer flips, which is the real lesson of the tool.
Questions from the field
Is it better to rent or buy in Long Beach? It turns on horizon, appreciation, and the rent you are comparing against — the three inputs this page makes you state. Short horizons favor renting almost everywhere; long horizons let principal paydown and appreciation compound. Run your numbers, then argue with the assumptions, not the arithmetic.
Why is tax grown at 2% when the home appreciates faster? Because that is Prop 13: the assessed value a California tax bill is based on can only rise 2% a year until resale. National calculators that tax the appreciated value every year overstate California ownership costs for as long as you stay.
What does this version leave out? Opportunity cost on the down payment, mortgage-interest tax deductions, renters insurance, and moving costs — listed in the disclaimer at the top of the tool. They matter; they are also where comparisons go to be rigged, so this simplified version prints its exclusions instead of hiding them.
Why does the horizon change the answer so much? Buying front-loads its costs (down payment, closing, selling costs at the end) and back-loads its returns (principal paydown accelerates, appreciation compounds). Renting is linear. The crossover year is the output that matters most.
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