Vol. II Templates BUY-VS-RENT Free
The buy-vs-rent math, done honestly.
A hold-period IRR comparison of ownership vs. leasing – for residential, commercial owner-occupied, and investment-property use cases. Tax-adjusted, opportunity-cost-aware, and transaction-cost honest. The math your typical online calculator skips.
Definition
What it is
3 use cases
Residential personal, commercial owner-occupied, investment property.
XLSX
Single workbook with three side-by-side IRR comparisons.
$12
$19 retail. 14-day refund.
Audience
Who this is for
Personal investors
Buying a primary residence vs. renting. The decision lives or dies on hold period and transaction costs – both modeled explicitly.
Owner-occupied commercial
Buying owner-occupied commercial vs. signing a lease. Tax-adjusted comparison with SBA financing options modeled.
CRE pros for personal use
Apply institutional-grade math to a personal real estate decision. Quickly defensible to a spouse or financial advisor.
Advisors
Standing reference for client decisions. Same model, different inputs, comparable across clients.
Inclusion
What's in the file
- Residential variant (primary residence)
- Commercial owner-occupied variant
- Investment-property variant (passive income)
- Tax adjustments (MI deduction, SALT, depreciation)
- Opportunity cost of capital modeling
- Transaction cost honesty (entry + exit)
- Cross-over hold period output
- Sensitivity table: appreciation × hold period
Reference
FAQ
Personal residence treatment?
Capital-gain exclusion ($250K single / $500K joint), MI deduction with current SALT cap, alternative-use-of-down-payment modeling.
SBA / 504 financing for owner-occupied?
Owner-occupied variant supports SBA 504 financing with the typical loan-tranche structure and the rate spreads modeled explicitly.
Refund policy?
14-day refund if the file is materially different from what was described, corrupted, or not delivered correctly. Email support@valoreregistry.com.
Pricing
Pricing
Retail at release $19
Founders' price (first 14 days) $12
Single XLSX delivery. Free point-update releases for 12 months. Informational only – not investment, tax, or financial advice. Personal decisions warrant qualified advisor engagement.
Implementation
How to use Buy vs Rent Calculator
Six steps from download to a defensible crossover analysis. Which variant to start with, how to set the opportunity-cost and transaction-cost inputs most people get wrong, and how to read the break-even year and net-worth gap outputs.
A. Six steps
- 1
Download the workbook and choose your variant
The XLSX has three side-by-side tabs: Residential (primary residence purchase vs. renting) – Owner-Occupied Commercial (buying vs. leasing business space, with SBA 504 support) – Investment Property (passive income property vs. deploying capital elsewhere). Start with the tab that matches your decision. Do not mix inputs across tabs – each variant has its own assumption set.
- 2
Enter the buy-side inputs
Blue-fill cells are inputs. Buy-side inputs: purchase price, down payment %, mortgage rate, loan term, expected annual appreciation, closing costs at entry (%), and annual carry costs (property tax rate, insurance, HOA, maintenance as % of value). For the Investment Property tab, also enter expected gross rent yield and projected vacancy rate.
- 3
Enter the rent-side and opportunity-cost inputs
Rent-side inputs: current monthly rent, annual rent growth rate, renter's insurance cost. Opportunity-cost input: the expected annual return you would earn on the down payment if deployed elsewhere (use your realistic alternative – not an aspirational number). This is the single input most calculators omit; it is often the deciding factor on a short hold period.
- 4
Enter the tax and transaction-cost assumptions
Tax inputs: marginal federal income tax rate, state income tax rate (for mortgage-interest deduction), capital-gain tax rate at exit. Transaction-cost inputs: closing costs at entry and selling costs at exit (typically 6–8% for residential). The Residential tab also applies the capital-gain exclusion ($250K single / $500K joint) automatically when the hold period exceeds two years.
- 5
Read the crossover output
The output panel shows three numbers: (1) the break-even hold period – the year at which the buy scenario's cumulative net worth exceeds the rent scenario's net worth; (2) the net-worth gap at year 5 and year 10 – how much better or worse the buy scenario looks at each horizon; (3) the effective annual return on equity deployed (IRR of the buy decision over the modeled hold). Below those three numbers is the annual cash-flow comparison for the modeled hold.
- 6
Run the sensitivity table to stress-test the decision
The bottom of each tab has a pre-built sensitivity table: appreciation rate (rows) × hold period (columns), showing the net-worth crossover gap under each combination. The break-even year moves significantly as appreciation assumptions change. Identify the appreciation + hold-period combinations under which the buy decision clearly wins, clearly loses, and is marginal – then assess which cell of the table reflects your realistic scenario.
B. Practitioner tips
- The break-even hold period is sensitive to transaction costs. On a residential purchase with 6% entry closing costs + 6% selling costs, the buy scenario often does not break even before year 5–7 at moderate appreciation assumptions. If the honest hold period is under 5 years, the numbers frequently favor renting.
- Opportunity cost of capital is the input most buyers understate. If the down payment could conservatively earn 6–8% annually in a diversified portfolio, use that – not 2%. The rent scenario's net worth compounds that return; the buy scenario deploys it into illiquid equity.
- Mortgage interest deduction: the current SALT cap ($10K combined) limits the federal deduction benefit for many buyers in high-tax states. The template applies the cap automatically; do not inflate the deduction benefit manually.
- For the Owner-Occupied Commercial variant, SBA 504 financing (typically 10% down, 40% CDC loan, 50% bank loan) changes the leverage and cash-flow math materially. Fill in the SBA tranche rates and terms separately; do not blend into a single mortgage rate.
- The Investment Property tab computes the after-tax cash yield separately from the appreciation component. A deal with a weak cash yield can still show a strong IRR if appreciation dominates – or vice versa. Look at both components, not just the summary IRR.
- Annual carry costs for residential: use actual property tax rate (not the effective rate on purchase price) + insurance quote + realistic maintenance (historically 1–2% of value per year for an older property). Underestimating carry is how buyers end up surprised.
C. Scope & limits
- The Residential tab models a single property with standard mortgage amortization. It does not handle jumbo financing, adjustable-rate mortgages, or bridge-to-permanent structures – use the mortgage inputs to approximate if needed.
- The tax treatment is simplified to the key federal mechanics. State tax treatment varies; the template does not model state-specific depreciation rules (Investment Property tab) or state capital-gain regimes. Engage a qualified advisor for jurisdiction-specific decisions.
- The model does not account for rent control or rent stabilization. In jurisdictions where rent growth is capped, the rent-side assumption may require manual override to reflect the actual regulated trajectory.
- This is informational modeling, not personal financial advice. The decision to buy or rent involves factors the model does not capture (liquidity needs, employment stability, family plans, credit access). Engage a qualified advisor for decisions above your financial risk threshold.
D. Pairs with
-
Tax Analysis
Template (available now)
Depreciation, 1031, and cost-seg mechanics for the Investment Property scenario. Pair to model the after-tax exit in more detail than the summary IRR here.
-
Cash Flow Projection
Template (available now)
For investment-property scenarios where a full 10-year DCF is warranted. The Buy vs. Rent template is the screening tool; Cash Flow Projection is the full model.
Quarterly refresh. Free re-download for 12 months from purchase.
14-day refund if the file is materially different from what was described, corrupted, or not delivered correctly.
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Buy vs Rent Calculator – free with Dispatch
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