True Cost of Buying
Buying costs include your down payment (opportunity cost), monthly mortgage payments, property taxes, insurance, maintenance, closing costs at purchase, and selling costs when you eventually sell. The calculator subtracts the equity you build — including any appreciation in the asset's value — to give you a net cost.
True Cost of Renting
Renting costs include monthly rent (with annual increases), security deposit, and renter's insurance. The key advantage of renting is that the money you would have spent on a down payment and the monthly difference between buying and renting can be invested elsewhere. This calculator accounts for that investment growth.
Break-Even Point
This is the year where buying becomes cheaper than renting (or vice versa). Before this point, one option is cheaper; after it, the other takes the lead. For homes, this is typically 5–7 years. For cars (which depreciate), buying is usually cheaper long-term. For commercial property, it depends heavily on location and market conditions.
Different Asset Types
Cars depreciate, so the appreciation field should be negative (typically -15% year 1, then -10% per year). Land doesn't require maintenance or insurance in most cases, and tends to appreciate. Commercial properties (offices, shops, warehouses) have different tax structures and often use triple-net (NNN) leases where the tenant pays taxes, insurance, and maintenance.