| |
Should I Rent, Buy or Invest Calculator
It is an age old question. Should I buy my own own house? Would it be cheaper than renting or dearer and by how much. What if I buy an investment property. Would I be better off in the long run, or will I not? I designed a 'Should I Rent, Buy or Invest' calculator back in 2004. It was made specifically for personnel that are employed by the Australian Defence Forces (ADF). I never released it because it was too hard to understand the results. I am now totally reworking it to make it easy to understand the statistical information. I am currently working on it when I need a break from PML2 development. It will work best for anyone that receives subsidised rent assistance, but can still be used by anyone to see the difference between the two over any given period. So if you are in the forces and living on base, receiving RA or living in a DHA house and your wondering if you should be buying your own house or should you be investing, then this calculator will show you what your options are.
The following screenshots are 70% of original size.
|
The first screen asks you to enter your current rental information and your proposed loan & house purchase information. All this input will be used to calculate a lot of useful information for you to absorb and ponder over. Every year your expenses such as council rates, insurance etc will go up. The last field is used to automatically increment the expense amounts by default to 5%, but you can change this if you wish. As you can see in this example the rent is very modest which is a typical rent paid by defence members living off base.
|
|
|
|
The next screen shows all the statistical results calculated from the previous screens input. Over a 6 year period, $53K is spent on rent. If you owned your own home, you would have spent $192K in the same period. But when you post out, if you sell your house, then after paying out the loan, you will be only $58K out of pocket for this period. This does not take into account the selling commission you have to pay the real estate agent. So you need to take this into account. In the long run, in this example you come out behind by $5K. over a 6 year period. So it has cost you an average of $2278 a month to own your own place which would be a great burden to anyones budget and in the end you are worse off. It would have been more beneficial to just have the money sit in your account collecting compound interest. While I am talking budget, it is quite clear that not everyone will have this amount available each month as it may be soaked up in other essential living items. Obvioulsy if you don't have this amount spare each month, then buying your own home is out of the question. This is one reason so many people can't get into their own homes. However if you do have a portion of this available then the following screens (still in progress) will show you some options.
The BLUE text changes and the More Info screens change depending on the amount shown in RED. I am currently setting up four different screens with different scenarios to help you understand what options there are for you.
For Non ADF people you can use this calculator to determine when it is a good opportunity to buy your own home. As the difference amount gets small it means that it costs about the same to own as renting.
|
|
|
This program will be available to you for FREE, Downloadable when I have finished & tested it. This will be after I have released V2 of Property Manager Lite. Down the track, if I get any interest shown, I will try and integrate this calculator into a special Edition of Property Manager Lite for ADF members.
|
|
