Rent Vs Buy

Rent vs Buy Skill

Rent-vs-buy arguments are usually two people comparing different questions: one counts equity and forgets transaction costs and carry; the other counts rent as "thrown away" and forgets the renter can invest the difference. This skill runs the symmetric model — both paths get their real costs and their real compounding — and delivers a breakeven horizon, because the honest answer is almost always "it depends how long you stay."

What This Skill Produces

• The year-by-year table — owner net position (equity minus selling costs) vs renter net position (invested savings), per year
• The breakeven year — before it, renting won; after it, buying won, on the stated assumptions
• The assumption ledger — every input labeled, defaults flagged as defaults
• The not-modeled list — taxes/deductions, renovation risk, the non-financials — stated up front

Required Inputs

Ask for these if not provided:

• Home price and comparable monthly rent — same home, same neighborhood; comparing a condo rent to a house purchase is the classic apples-to-oranges error
• Down payment %, mortgage rate, term (defaults 20% / 6.5% / 30yr, labeled)
• How long they expect to stay — the single most decision-relevant input
• Growth assumptions — appreciation, rent growth, investment return (defaults 3/3/5%, labeled)

Programmatic Helper

python3 scripts/rent_vs_buy.py --price 450000 --rent 2200
python3 scripts/rent_vs_buy.py --price 450000 --rent 2200 --horizon 10 --appreciation 2 --json

Deterministic. The renter's pot starts at the down payment + closing costs (the money a buyer parts with on day one) and each year absorbs the difference between owner outflow and rent. Selling costs are applied at every horizon — equity you can't access without paying 7% isn't fully yours.

Framework: The Symmetry Rules

• The renter invests the difference — the model's load-bearing assumption; a renter who spends the difference makes buying win almost automatically, and that's a behavior question, not a math question. Say so.
• Carry costs are real — tax, insurance, maintenance (~2%/yr of value) never build equity; "my mortgage is like rent" omits them
• Transaction costs decide short horizons — ~3% in and ~7% out is why breakeven is measured in years, not months
• Appreciation is an assumption, not a birthright — vary it before trusting a conclusion; a 1-point change often moves breakeven by years
• The output is a horizon, not a verdict — "buying wins if you stay past year N" is the honest deliverable

Output Format

Rent vs Buy: [scenario]

The Table and the Breakeven

[Script output: year-by-year net positions, breakeven year]

What the Breakeven Means

[Two sentences: how the user's expected stay compares to the breakeven, and which assumption the conclusion is most hostage to.]

What This Model Ignores

Taxes and deductions (jurisdiction-specific) · renovation and repair surprises · rate refinancing · the non-financials (stability, flexibility, the yard) — which are allowed to outvote the math.

Educational model, not financial advice — verify with a licensed professional before acting on it.

Quality Checks

• The renter-invests-the-difference assumption is stated explicitly
• Selling costs are inside the owner's net position at every horizon
• The breakeven year is compared against how long the user expects to stay
• At least one sensitivity note (appreciation or investment return varied)
• The disclaimer line appears in the artifact

Anti-Patterns

• Do not declare a universal winner — the deliverable is a breakeven horizon
• Do not count rent as "thrown away" without counting interest, tax, and maintenance the same way
• Do not compare non-comparable homes (rent a 1BR vs buy a 3BR)
• Do not model jurisdiction-specific tax benefits — name them as unmodeled instead
• Do not let the math silently overrule stated non-financial priorities — surface the tension