Zillow Rent Vs Own Calculator

Cost Comparison Formulas:

\[ \text{Total Rent Cost} = \text{Rent} \times \text{Months} \] \[ \text{Total Own Cost} = \text{Mortgage} + \text{Taxes} + \text{Insurance} - \text{Equity} \]

Rent (dollars per month):

Months (number):

months

Mortgage (dollars):

Taxes (dollars):

Insurance (dollars):

Equity (dollars):

Total Rent Cost:

Total Own Cost:

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1. What is the Rent vs Own Calculator?

The Zillow Rent vs Own Calculator compares the total costs of renting versus owning a property over a specified period. It helps you make informed financial decisions about housing.

2. How Does the Calculator Work?

The calculator uses these formulas:

\[ \text{Total Rent Cost} = \text{Rent} \times \text{Months} \] \[ \text{Total Own Cost} = \text{Mortgage} + \text{Taxes} + \text{Insurance} - \text{Equity} \]

Where:

\( Rent \) — Monthly rental payment
\( Months \) — Duration of comparison
\( Mortgage \) — Total mortgage payments
\( Taxes \) — Property taxes paid
\( Insurance \) — Homeowner's insurance costs
\( Equity \) — Built-up home equity

Explanation: The calculator compares the straightforward cost of renting against the more complex costs of ownership, factoring in equity accumulation.

3. Importance of Cost Comparison

Details: Understanding the true cost comparison helps in making one of life's biggest financial decisions - whether to rent or buy a home.

4. Using the Calculator

Tips: Enter all costs in dollars. For accurate comparison, use realistic estimates of all ownership costs including maintenance (not shown here but important in real decisions).

5. Frequently Asked Questions (FAQ)

Q1: What's not included in this calculation?
A: Maintenance costs, opportunity costs of down payment, tax deductions, and home value appreciation aren't included but affect real decisions.

Q2: How accurate is this comparison?
A: It provides a basic comparison but consult a financial advisor for comprehensive analysis as many factors affect the true cost difference.

Q3: What time period should I use?
A: Typically 5-7 years is good for comparison, as shorter periods may favor renting due to transaction costs of buying.

Q4: How should I estimate equity?
A: Equity is principal paid down plus any home value appreciation minus selling costs (typically 6-10% of home value).

Q5: Does this account for rent increases?
A: This simple version assumes constant rent, but in reality rent typically increases 2-3% annually.