Buy or Rent Case Study

Year
Purchase Information
Purchase Price
LTV
Debt/Loan Amount
Interest Rate
Term
Closing Costs
Expense Information
Insurance
Condominium Ass. Fee
Market Assumptions
House Price Appreciation
Cost & Rent Inflation

715,000
80.00%
572,000
4.00%
30 years
($8,000.00)

$67 month
$833 month

0.00% annum
3.00% annum

Taxes
Income Tax Rate
Property Tax Rate
Holding Period Assumptions
Holding Period
Cost of Selling Property
Rental Assumptions
Rent
Rental Inflation
Security Deposit
Savings Return

25.00%
$48.00 $monthly

5 years
6.00%

Year =

Cost Inflation
Housing Inflation
Rental Expenses
Rent
Security Deposit
Total Rent Expenses
Ownership Expenses
Operating Expenses
Insurance
Condominium Ass. Fee
Property Taxes
Total Annual Expenses
Debt Service
Equity down pmt
Payment/mo
Loan Balance
Principal Paid
Interest Paid
Total Ownership Cashflow
Net BT Cashflow Benefit of Ownership

$3,250 monthly
3.00% yearly
$3,250 initial
6%

Tax Benefits
Income Deduction Advantage
Net AT Cashflow Benefit of Ownership

3.00%
0.00%

3.00%
0.00%

3.00%
0.00%

3.00%
0.00%

3.00%
0.00%

3.00%
0.00%

(39,000)

(40,170)

(41,375)

(42,616)

(3,250)
(3,250)

(39,000)

(40,170)

(41,375)

(42,616)

(43,895)
3,250
(40,645)

(800)
(9,996)
(576)
(11,372)

(824)
(10,296)
(593)
(11,713)

(849)
(10,605)
(733)
(12,187)

(874)
(10,923)
(755)
(12,552)

(900)
(11,251)
(934)
(13,085)

(151,000)

($2,730.82)
561,927
(10,073)
(22,697)
(44,142)

($2,730.82)
551,443
(10,484)
(22,286)
(44,483)

($2,730.82)
540,533
(10,911)
(21,859)
(44,957)

($2,730.82)
529,178
(11,355)
(21,415)
(45,322)

($2,730.82)
517,360
(11,818)
(20,952)
(45,854)

(147,750)

(5,142)

(4,313)

(3,581)

(2,706)

(5,209)

5,818

5,720

5,648

5,542

5,471

(147,750)

676

1,407

2,067

2,837

262

715,000

715,000
(42,900)
672,100
(561,927)
0
110,173

715,000
(42,900)
672,100
(551,443)
0
120,657

715,000
(42,900)
672,100
(540,533)
0
131,567

715,000
(42,900)
672,100
(529,178)
0
142,922

715,000
(42,900)
672,100
(517,360)
0
154,740

(42,900)

(42,900)

(42,900)

(42,900)

(42,900)

($143,000.00)
572,000

PROPERTY ANALYSIS
Property Value at Sale
Sale/Closing Expenses
Closing Proceeds
Loan Balance Repaid
Reimbursable Initial Costs
Net Cashflow from Sale
Gain/Loss from Sale
Points Due at Origination
Equity Required at Origination

0
(151,000)

IRR ANALYSIS ( cashflows)

Year 0
Year 1
Year 2
Year 3
Year 4

IRR
(151,000)
(151,000)
(151,000)
(151,000)
(151,000)

110,850
676
676
676

122,064
1,407
1,407

133,634
2,067

145,759

-26.59%
-9.87%
-3.52%
-0.18%

Buy or Rent Case Study

Year
Purchase Information
Purchase Price
LTV
Debt/Loan Amount
Interest Rate
Term
Closing Costs
Expense Information
Insurance
Condominium Ass. Fee
Market Assumptions
House Price Appreciation
Cost & Rent Inflation

715,000
80.00%
572,000
4.00%
30 years
($8,000.00)

$67 month
$833 month

2.50% annum
3.00% annum

Taxes
Income Tax Rate
Property Tax Rate
Holding Period Assumptions
Holding Period
Cost of Selling Property
Rental Assumptions
Rent
Rental Inflation
Security Deposit
Savings Return

25.00%
$48.00 $monthly

5 years
6.00%

Year =

Cost Inflation
Housing Inflation
Rental Expenses
Rent
Security Deposit
Total Rent Expenses
Ownership Expenses
Operating Expenses
Insurance
Condominium Ass. Fee
Property Taxes
Total Annual Expenses
Debt Service
Equity down pmt
Payment/mo
Loan Balance
Principal Paid
Interest Paid
Total Ownership Cashflow
Net BT Cashflow Benefit of Ownership

$3,250 monthly
3.00% yearly
$3,250 initial
6%

Tax Benefits
Income Deduction Advantage
Net AT Cashflow Benefit of Ownership

3.00%
2.50%

3.00%
2.50%

3.00%
2.50%

3.00%
2.50%

3.00%
2.50%

3.00%
2.50%

(39,000)

(40,170)

(41,375)

(42,616)

(3,250)
(3,250)

(39,000)

(40,170)

(41,375)

(42,616)

(43,895)
3,250
(40,645)

(800)
(9,996)
(576)
(11,372)

(824)
(10,296)
(593)
(11,713)

(849)
(10,605)
(733)
(12,187)

(874)
(10,923)
(755)
(12,552)

(900)
(11,251)
(934)
(13,085)

(151,000)

($2,730.82)
561,927
(10,073)
(22,697)
(44,142)

($2,730.82)
551,443
(10,484)
(22,286)
(44,483)

($2,730.82)
540,533
(10,911)
(21,859)
(44,957)

($2,730.82)
529,178
(11,355)
(21,415)
(45,322)

($2,730.82)
517,360
(11,818)
(20,952)
(45,854)

(147,750)

(5,142)

(4,313)

(3,581)

(2,706)

(5,209)

5,818

5,720

5,648

5,542

5,471

(147,750)

676

1,407

2,067

2,837

262

715,000

732,875
(43,973)
688,903
(561,927)
0
126,976

751,197
(45,072)
706,125
(551,443)
0
154,682

769,977
(46,199)
723,778
(540,533)
0
183,245

789,226
(47,354)
741,873
(529,178)
0
212,695

808,957
(48,537)
760,419
(517,360)
0
243,060

(26,098)

(8,875)

8,778

26,873

45,419

($143,000.00)
572,000

PROPERTY ANALYSIS
Property Value at Sale
Sale/Closing Expenses
Closing Proceeds
Loan Balance Repaid
Reimbursable Initial Costs
Net Cashflow from Sale
Gain/Loss from Sale
Points Due at Origination
Equity Required at Origination

0
(151,000)

IRR ANALYSIS ( cashflows)

Year 0
Year 1
Year 2
Year 3
Year 4

IRR
(151,000)
(151,000)
(151,000)
(151,000)
(151,000)

127,652
676
676
676

156,089
1,407
1,407

185,312
2,067

215,532

-15.46%
1.90%
7.50%
9.92%

Buy or Rent Case Study

Year
Purchase Information
Purchase Price
LTV
Debt/Loan Amount
Interest Rate
Term
Closing Costs
Expense Information
Insurance
Condominium Ass. Fee
Market Assumptions
House Price Appreciation
Cost & Rent Inflation

715,000
80.00%
572,000
4.00%
30 years
($8,000.00)

$67 month
$833 month

-2.50% annum
3.00% annum

Taxes
Income Tax Rate
Property Tax Rate
Holding Period Assumptions
Holding Period
Cost of Selling Property
Rental Assumptions
Rent
Rental Inflation
Security Deposit
Savings Return

25.00%
$48.00 $monthly

5 years
6.00%

Year =

Cost Inflation
Housing Inflation
Rental Expenses
Rent
Security Deposit
Total Rent Expenses
Ownership Expenses
Operating Expenses
Insurance
Condominium Ass. Fee
Property Taxes
Total Annual Expenses
Debt Service
Equity down pmt
Payment/mo
Loan Balance
Principal Paid
Interest Paid
Total Ownership Cashflow
Net BT Cashflow Benefit of Ownership

$3,250 monthly
3.00% yearly
$3,250 initial
6%

Tax Benefits
Income Deduction Advantage
Net AT Cashflow Benefit of Ownership

3.00%
-2.50%

3.00%
-2.50%

3.00%
-2.50%

3.00%
-2.50%

3.00%
-2.50%

3.00%
-2.50%

(39,000)

(40,170)

(41,375)

(42,616)

(3,250)
(3,250)

(39,000)

(40,170)

(41,375)

(42,616)

(43,895)
3,250
(40,645)

(800)
(9,996)
(576)
(11,372)

(824)
(10,296)
(593)
(11,713)

(849)
(10,605)
(733)
(12,187)

(874)
(10,923)
(755)
(12,552)

(900)
(11,251)
(934)
(13,085)

(151,000)

($2,730.82)
561,927
(10,073)
(22,697)
(44,142)

($2,730.82)
551,443
(10,484)
(22,286)
(44,483)

($2,730.82)
540,533
(10,911)
(21,859)
(44,957)

($2,730.82)
529,178
(11,355)
(21,415)
(45,322)

($2,730.82)
517,360
(11,818)
(20,952)
(45,854)

(147,750)

(5,142)

(4,313)

(3,581)

(2,706)

(5,209)

5,818

5,720

5,648

5,542

5,471

(147,750)

676

1,407

2,067

2,837

262

715,000

697,125
(41,828)
655,298
(561,927)
0
93,371

679,697
(40,782)
638,915
(551,443)
0
87,472

662,704
(39,762)
622,942
(540,533)
0
82,409

646,137
(38,768)
607,369
(529,178)
0
78,191

629,983
(37,799)
592,184
(517,360)
0
74,825

(59,703)

(76,085)

(92,058)

(107,631)

(122,816)

($143,000.00)
572,000

PROPERTY ANALYSIS
Property Value at Sale
Sale/Closing Expenses
Closing Proceeds
Loan Balance Repaid
Reimbursable Initial Costs
Net Cashflow from Sale
Gain/Loss from Sale
Points Due at Origination
Equity Required at Origination

0
(151,000)

IRR ANALYSIS ( cashflows)

Year 0
Year 1
Year 2
Year 3
Year 4

IRR
(151,000)
(151,000)
(151,000)
(151,000)
(151,000)

94,047
676
676
676

88,879
1,407
1,407

84,476
2,067

81,028

-37.72%
-23.06%
-17.07%
-13.56%