This calculator helps you determine if a rent-to-own agreement is a financially sound choice by comparing the costs of renting with the eventual costs of buying, also incorporating the **5% rule** to assess a property's investment potential.
The **5% rule** states that the total annual costs of owning a home should be roughly **5%** of its market value. By comparing a property's estimated annual expenses to its market value, you can quickly decide if renting or buying is the better financial option for you.
First, you need to estimate the total annual costs of owning the property. Enter your property details below.
Annual Property Taxes:
Annual Maintenance:
Annual Cost of Capital:
Total Annual Owning Costs:
Now, let's use the 5% rule to evaluate your calculated owning costs.
Actual Annual Owning Costs:
5% Rule Benchmark:
This final step helps you make a more informed decision.
Monthly Cost of Owning:
Net Benefit of Rent-to-Buy (Monthly):
Total Savings from Rent Credit: