File:OwnvsRent.xls Copyright Zeppelin Real Estate Analysis Limited
TABLE ILLUSTRATING OWNING AND RENTING A HOME OR REAL ESTATE
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Subject: Owning vs Renting a Home = Net Rent Basis = Carrying costs e.g. management fee, maintenance, government rates etc are excluded (deemed to be the same for both owner and renter)
Date: Feb-01 Updated: Mar-01
Remarks: For rough reference only. No allowance is made for RISK in Investment. Calculations in Nominal Terms unless otherwise stated or configured.
This spreadsheet is for very preliminary estimates only and users are advised to seek proper professional consultation where required.
Zeppelin and its staff, executives, associates, consultants, and the like do NOT accept responsibility / liability for losses, damages, claims and the like arising out of the reference to or use of the content contained herein.
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Assumptions: Scenarios =  Choice of 5, 10, 15, 20 OR 25 Years (based on Mortgage Term)
Home Price $ =        3,000,000 Mortgage Level = 50.00% Mortgage $ =              1,500,000 Mortgage Rate = 9.00% Term years =  25 Home $ +/- pa = 4.00%
Rent per month $ =             12,500 Rent per year $ =                 150,000 Investment $ =              1,500,000 Investment +/- pa =  9.00% Lease Term years =  25 Rent +/- pa = 4.00%
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Summaries: Owner Scenario Nominal Value - Outlay + Nominal Net Value$ Now + Renter Scenario Nominal
Scenarios Total Outlay $ Value $ Now Value - Outlay $ % Gain / (Loss) Opportunity Cost Opportunity Cost % Gain / (Loss) Opportunity Cost Total Outlay $ Value $ Now Value - Outlay $ % Gain / (Loss) Net Value $ Now
5 Years (3,428,193) 3,649,959 221,765 6.47% (1,342,023) (1,120,257) -32.68%         2,307,936 (2,312,448) 2,307,936 (4,512) -0.20%           2,307,936
10 Years (3,837,301) 4,440,733 603,432 15.73% (889,687) (286,256) -7.46%         3,551,046 (3,300,916) 3,551,046 250,129 7.58%           3,551,046
15 Years (4,291,325) 5,402,831 1,111,506 25.90% 60,893 1,172,399 27.32%         5,463,724 (4,503,538) 5,463,724 960,186 21.32%           5,463,724
20 Years (4,786,394) 6,573,369 1,786,975 37.33% 1,833,247 3,620,222 75.64%         8,406,616 (5,966,712) 8,406,616 2,439,904 40.89%           8,406,616
25 Years (5,317,734) 7,997,509 2,679,775 50.39% 4,937,112 7,616,887 143.24%       12,934,621 (7,746,886) 12,934,621 5,187,735 66.97%         12,934,621
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