## Should you buy a house or rent? The calculator to check it

Do you want to understand in a scientific and simple way if, in your specific case, it is more convenient to buy a house or to rent it?

This calculator will give you the definitive answer!

Enter the required parameters and, for an even more precise calculation, also those in the “Advanced” area.

*Below you will find a small guide to using the calculator.*

## What parameters does the calculator consider?

The calculator takes into consideration the following **parameters** which affect, for the most part, **the cost ** **of buying** , **maintaining and selling** the house:

– First home **purchase**

– **Mortgage – ****Restructuring**

costs , understood as a percentage of the value of the house – Maintenance **work** , value annual as a percentage of home value – Home buying and selling **expenses** , shown as a percentage of home purchase price – **Inflation** – **Appreciation**

(or depreciation) of the house over the years, annual value as a percentage of the value of the house

– **Cost of a rent** between the agency and the monthly fee

– Tax relief is not considered. However, they can be entered indirectly when choosing inputs

For ease of use, the parameters are pre-set. However, they can all be edited so that they can best reflect your situation **.**

## first graph: ?

The **first graph** above allows you to **analyze the costs** deriving from the purchase and maintenance **of a house compared to those linked to renting** .

In particular, for **the purchase of the house** the following will be considered:

– **Cost of the mortgage – ****Renovation**

costs – Annual **maintenance work** – Annual **appreciation** of the house (positive or negative) – Annual **inflation** (positive or negative) – **Expenses** to be incurred in **the purchase ****and in the ****sales** phase

**For the rent,** on the other hand, the following will be considered:

– **Agency cost**

– **Monthly rent**

The **two lines** therefore tell us:

– **What costs we would have had to bear after “x” years if we had decided to buy a house, including sales costs**

– **What is the disbursement we would have had to bear in the case of rent**

In this graph we therefore have an idea purely related **to the costs to be incurred** in the two cases, without considering any type of investment

A sort of **“sliding doors”** :

*What ** costs would be faced by buying a house (with initial costs and monthly mortgage for a certain number of years)* ?

*?*

**And which instead remaining in rent**## Second chart: is it better to buy a house or to stay in rent and invest?

With the second graph, however, **we want to go further** because the comparison shown in the first graph is not completely complete. In the Business Case relating to “it is better to buy a house”, in fact, we should consider that **the capital** made available **for the purchase of the house, in the case of renting, could be invested** rather than kept under the mattress.

We will therefore have the case in which **all the costs we had to face in buying the house** in year zero **will instead be invested in a financial instrument** that can give us an **annual return** chosen by us.

**On the basis of** everyone’s propensity for risk, **it is** therefore possible **to simulate** (in “Advanced”) the **return on an investment** and **compare it with a real estate investment** : in this way one has an idea of which of the two solutions would be more convenient on the basis of personal parameters.

Obviously, **the annual rent payment will be subtracted from the ****curve** relating to the **return** due to investments .

Therefore, * if the initial capital and the set return are not sufficient , it will happen that the money used for the rent will erode the capital* . In this case

**negative values**will be shown within the calculator.

For those wishing to have a practical example, you can read this **article** .

**All clear? From the test, did you make the right choice between buying a house or renting?**