Own or lease?

The big question we’ve all been through… What do we do? Do we buy or lease?

A difficult question to answer, especially since factors that are not one hundred percent quantitative come into play.

But having certain data, there are things that are really quantitive. Regardless of whether you like one or the other option more, because it personally brings x or y benefits, there are certain things against which you cannot argue… and they are the numbers.

Cold and unfeeling, numbers, like the ‘ones and zeros‘ in computing, they are always right.

And here I come to present that to you, numbers, cold, but objective.

---

If you have read anything about me, you will know that I have been living the American adventure for a while now.

A few months ago, coinciding with the end of our leasing in the apartments where we used to live, this question began to resonate in our heads… ‘What if it is better not continue leasing and we buy something?’

In addition to all those things that I mentioned above that I didn’t want to discuss, about whether buying ties more, if renting gives more freedom… etc, etc, there was another thing that was on our minds; The $.

If we looked 100% at economics, how long would we need to live in a purchased house for it to start paying off vs living for rent?

In the United States there are some expenses when buying or selling a house. The dreaded ‘closing costs’. Every time a house changes owner, the buyer will have to pay some closing costs and the seller will have others. And they are not small thing.

These are mainly the expenses that affect the most when it comes to answer the big question.

In addition, there are many other things that also play a role, but they do not have as much weight.

How much time do we need for buying a house to be profitable?

I like excel more than a kid loves cake, so I was creating a new one even before the whole purchase idea came to my mind! The ultimate goal would be to give us back that magic number.

Here is the link to the document that I prepared to help us answer that question.

You should have read access, but if you want to use the document, simply make a copy

and from that point, touch and play as much as you need.

In this video below (so far in Spanish, but I hope to have it in English soon) I present it to you in a basic way so that you know where to go and what to touch to get the expected output.

Just a few input data and… voilà! you will have your magic number!

If you don’t dive much deeper and have full confidence on me and on my ability to excel… you don’t have much else to do.

But since I suppose that this is not entirely the case, I will leave you a somewhat more detailed explanation of what is behind the scene and the reason for those numbers.

I do not need a mortgage

You also can rely on the excel if you want to have an idea of when it will be profitable to buy instead of renting.

Take a look to the below video, where I share a little bit more about this special case.