Owner-occupied

Lease vs own

Over the years you will actually be there, is owning cheaper?

Runs the rent you would pay, escalating, against the cost of owning the same space — debt service, operating expense and the equity you hold at the end — and reports the year the two cross.

Every default here is an illustrative figure chosen to be plausible. Nothing on this page is a rate sheet, a quote or an offer, and no licence or NMLS number exists to attach to it.

Owning

Leasing

The hold

Advantage of owning——
Equity at exit——
Net cost of owning—All cash out, less equity recovered
Net cost of leasing—All rent paid, nothing recovered

Cumulative cash out, both ways

Illustrative

Owning starts higher because of the down payment. Rent starts lower and escalates every year. The third line is what owning really costs once the equity you are building is credited back — and where it crosses the rent line is the answer.

Cumulative cost of leasing against owningThree lines comparing cumulative rent, cumulative ownership cost and ownership cost net of equity.
Cumulative rent Cumulative cost of owning Owning, net of equity built

Year by year

YearRentOwn — cash outCumulative rentCumulative own

Assumptions on this page

  • Everything is nominal — no discounting to present value, and no tax effect. Depreciation, interest deductibility and the treatment of rent all move this materially, and guessing your tax position on a demonstration site would be worse than leaving it out.
  • Leasing assumes the rent covers the landlord’s taxes, insurance and structural maintenance, which the owner’s operating cost line represents on the other side.
  • Appreciation compounds annually and selling cost is applied once, at exit.
  • Tenant improvement allowances, free-rent periods, relocation costs and the flexibility of a lease are real and are not in this arithmetic.
  • Illustrative only. This is a way to see the shape of the decision, not to make it.

Want a person to look at the real numbers?

Demonstration

On a live site this is where the deal would go. Here it validates and stops.

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