PF in the Singular Form: Rent vs. Buy

This post is the latest in a sometimes series about personal finance and how it applies to single people. As with all financial advice, don’t trust a stranger on the Internet to know what’s best for you and your financial situation. Educate yourself.

A cute little condo complex near my apartment has a few For Sale signs in front of it. I’m feeling the pressure from a lot of sources, a little voice that’s saying, wouldn’t it be nice to own your own home?

Yes, yes it would.

There’s all the arguments pro-home ownership about tax benefits and equity building and bla bla bla American Dream bla. Then there’s the arguments anti-home ownership about maintenance costs and hidden costs and cost costs and what if something happened to me and I couldn’t work because OMG I HAVE ONLY ONE INCOME I’M SINGLE FEAR TERRIFYING CRIPPLING FEAR.

This is a blog post tagged in the Personal Finance category, where I look at the numbers side of things. So, my good chums, instead of sitting around in FEAR TERRIFYING CRIPPLING FEAR, off to the calculator I go!

From KJE Financial Solutions

You can find many Rent vs. Buy calculators if you type that into Google. There’s a couple reasons I like this calculator from KJE Computer Solutions:

1) It includes the fees and taxes that a lot of mortgage calculators (provided by mortgage companies) don’t, giving a more accurate picture of actual monthly costs. Not a completely accurate one, but a little *more* accurate.

2) It also includes in the calculations your current rent and the amount it expects inflation to increase your rent over the same number of years of your theoretical mortgage.

3) When you click “View Report”, it not only has a long explanation of the math so you can look at the numbers, but it says in big letters either when your home equity will be worth more than if you invested the cash you have on hand that you’d use for the down payment, or (as I often get when I’m inputting my numbers into this calculator), “Your home purchase does not break even after 30 years.”

As all people involved in personal finance, I love numbers. I love taking the reports and the calculations and using them to beat that FEAR TERRIFYING CRIPPLING FEAR to death.

And I’ll keep checking. Maybe one day, it’ll tell me that I’ll break even and it’s time to take that gamble.

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