Rent & Housing
Rent vs Buy Break-Even Calculator
Buying can win over time, but upfront costs and selling costs matter. Estimate whether your expected stay is long enough.
Buying breaks even after about 21 years under these simplified assumptions.
Breakdown
| Monthly owner minus rent | $900 |
|---|---|
| Estimated annual ownership benefit | $3,492 |
| Upfront plus selling cost | $72,000 |
| Estimated break-even | 21 years |
| Selected state (none income-tax level, official benchmarks) | Texas |
| State income tax estimate (Planning-level state profile) | 0% |
| Rent cost pressure (2023 ACS B25064: $1,413/mo median gross rent) | near U.S. baseline |
| Childcare cost pressure (2023 DOL NDCP: $10,078/yr infant center care) | 21% below U.S. baseline |
| Car insurance pressure | 20% above U.S. baseline |
| Healthcare cost pressure | 2% below U.S. baseline |
- Run a flat home-price scenario too.
- Transaction costs make short stays harder for buying.
- State data is an estimate for planning. Confirm tax, marketplace, insurance, housing, and benefit decisions with official state or federal sources.
- State rent and childcare benchmarks use Census ACS 2023 median gross rent and U.S. Department of Labor NDCP 2023 state childcare estimates where available.
- Confirm taxes with the Texas tax agency and IRS state-government links.
Estimate only, not tax, legal, financial, or medical advice. Always confirm important decisions with official sources or a qualified professional.
Copyable inputs
If you might move soon, transaction costs can outweigh the benefits of buying.
Estimated break-even point quick reference
Use these reference points before entering your own numbers. The calculator above gives a more useful estimate for your exact situation.
| Item | Rule of thumb | Note |
|---|---|---|
| Short stay | Rent often safer | Transaction costs can dominate |
| Long stay | Buying may improve | Equity and rent inflation can help |
| Key risk | Assumptions | Appreciation and repairs are uncertain |
Rent-vs-buy assumptions are sensitive. Treat the result as a scenario, not a prediction.
Before You Decide
- Estimate realistic monthly owner cost.
- Include selling costs.
- Test a flat or falling home-price scenario.
- Think about how long you will stay.
Next three steps
- Compare break-even years with your expected stay.
- Test lower appreciation.
- Use mortgage and rent calculators for inputs.
Estimate only, not tax, legal, financial, or medical advice. Always confirm important decisions with official sources or a qualified professional.
Frequently Asked Questions
- Is buying always better long term?
- No. It depends on price, rent, rates, taxes, maintenance, appreciation, and how long you stay.
- What is break-even?
- The point where estimated buying benefits catch up with the extra costs of buying.
- Does this include opportunity cost?
- This first version uses a simplified approach and does not model investment returns on cash.