Luca Sawada
Coldwell Banker Real Estate
196 Waterman Street
Providence, RI 02906

401-585-7679 Office


Should I BUY or RENT financial calculator

Here is a good place to start . . . .
The financial advantages of buying a home or renting an apartment in Providence RI depends on several factors. These include, the rental prices, current market value, and the outlook for home price appreciation of properties in your area. This calculator allows you to see whether buying a new home will benefit you, using your assumptions.

I am always available to discuss your particular situation and to help you find the best place to buy of rent. - - Luca Sawada, Realtor

Contact me anytime Luca Sawada
Coldwell Banker Real Estate Providence

RENT vs BUY Calculator

Interest Rate %
Your Income Tax Bracket %
Property Tax Rate %
Estimated Rate of Appreciation %
Current Monthly Rent $
Current Condo Fee $
Market Value of Current Rental Property $
Years Planning to Keep New Home Yrs

  Note: The numbers in the boxes now are default values. Since nobody knows for certain how much houses will appreciate in your area in the future, it is impossible to be absolutely certain whether renting or buying will be advantageous for you.

Interest Rate
This is the interest rate on a mortgage with zero points. Because the starting rates on ARMs are unrealistically low, it is recommended that you use a fixed-rate mortgage rate for this calculation.

Your Income Tax Bracket
This is your marginal tax bracket. It should be the sum of your marginal tax rate on Federal income tax and on state income tax. One complication is that if you take on a big mortgage, your taxable income may fall and this could reduce your marginal tax bracket. If your current income is only slightly above the level needed to put it into the highest tax bracket, you might want to use the next highest tax bracket here to get a more realistic estimate.

Property Tax Rate
Input the property tax rate for your jurisdiction.

Estimated Rate of Appreciation
This is a critical assumption, and it requires a forecast. At what rate do you think that prices and rents will increase in your area for the next several years? In the late 1980's, people in California thought prices would go up 10 percent a year forever. Now, they seem to think that prices will decline forever. The most reasonable guess nationwide is that prices will go up with the general rate of inflation, about 2 percent per year. However, local supply/demand conditions tend to be more important than national averages in determining home prices.

Current Monthly Rent, Market Value of Current Rental Property
The rent is the monthly rent and the price is a selling price on comparable residences. It is more important that they be comparable to one another than that they be comparable to the place in which you live or are thinking of living. Do not compare the 2-bedroom apartment you are in now with a 4-bedroom detached home that you might buy. Instead, find a condominium complex where you can find the rental rate and selling price of similar units. Or look in the classified section of a newspaper for rental rates and asking prices of similar houses in a neighborhood.

Current Condo Fee
If you are comparing renting an apartment with buying a condo, make sure to include the monthly condo fee.

Years Planning to Keep New Home
This is the number of years you expect to remain in the house. This is important, because whenever you move you incur costs, including fees to real estate brokers. The longer you plan to stay in a house, the more likely it is that staying will be

This is an evaluation of whether or not it is advantageous financially to buy a home. To see how the results change depending on the inputs, try putting in different numbers, particularly for expected appreciation.The answers are on a scale that ranges from "strongly advise buying" to "strongly advise renting."