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Buy vs. Rent Calculator - Double Blind

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Buy vs. Rent Calculator - Double Blind Powered By Docstoc
					Purchase vs. Rent Spreadsheet
Instructions: Fill in GREY cells

Initial Capital                                          Comments
Purchase price                          $   250,000
Down Payment                        25% $   (62,500)     Cost of capital is accounted for in opportunity cost (last secti
Mortgage Amount                         $   187,500


Closing Costs
Mortgage Insurance                      $     1,219      Typical Rates: 35% down = 0.5% / 25% down = 0.65% / 20%
Appraisal Fee                           $       250
Home Inspection Fee                     $       500
Moving Costs                            $       500
Property Transfer Tax                   $     3,000      1% up to 200k, 2% over
… net of PTT refund                     $    (3,000)     Only if: First time buyer, then [< $425 = 100% / $425k-$450k
Prepaid Property Tax                    $       619      Assume half year
Property Insurance                      $       800
Legal Fees                              $       500
Title Insurance                         $       200
Total Closing Costs                     $     4,587


Operating Costs (Cashflow) / year
Property Insurance                      $       800
Property Taxes                          $     1,237        4.94817 Vancouver rate per $1,000
… net of Home Owner's Grant             $      (570)     Almost everybody gets this if resident
Maintenance                             $     2,400      Assume no special assessments!
Mortgage                                $    13,021          4.55%          25 year amortization
Total Op. Costs / year                  $    16,888

Opportunity Cost: Renting a place
Rent                                    $   (12,000)       $1,000 /month
Heating / Hot Water                     $       400      Typically the only free utility - would have to pay for ownersh
Cost of capital (downpayment)           $     1,641          3.75% 1-year risk-free rate              30%
Opportunity Cost (not renting)          $    (9,959)

Net difference:                         $     6,929 /year OR          $577 per month cost of ownership
opportunity cost (last section)




/ 25% down = 0.65% / 20% down = 1.00% / 15% down = 1.75% / 10% down = 2.00%




425 = 100% / $425k-$450k proportional / $450k+ = 0 ]




ld have to pay for ownership scenario
             Tax Rate


t of ownership

				
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