Year by year, which path leaves you wealthier, and the year buying overtakes renting.
IRS · Tax FoundationWhat renting the same place would cost.
$90,000 in cash.
Sets the property tax rate. Without one we use the Texas average of 1.68%.
The single input that decides this most often. Selling costs roughly 6% of the price, so a short stay rarely recovers it.
We follow two versions of you for 30 years. Both earn the same and both need somewhere to live. One buys. The other keeps renting and invests every dollar the buyer spends above their rent. Then we cash them both out and see who is holding more.
Buying is $11,636 ahead. That assumes the renting version of you actually invested the difference every single month. Most people spend some of it, and every dollar spent instead of invested moves the payoff earlier.
Before year 6, the transaction costs and the interest-heavy early payments keep the renter ahead; after it, equity and appreciation compound on a much larger base.
Owning costs here are principal, interest, property tax at 1.68% (Texas), insurance, maintenance, and HOA, less the tax benefit of itemizing. Principal is included as a cost, not a saving: it reappears as equity on the other side of the ledger.
Nominal dollars throughout. Assumes a primary residence, so the Section 121 exclusion covers the gain on sale. Property tax uses the county rate where a ZIP resolves to one, adjusted for what a new buyer pays, and is applied to the current value each year, which overstates the bill in assessment-cap states like California over a long tenure. Insurance starts at $35/mo per $100,000 of value, the rule Zillow quotes. Rent growth, appreciation, and investment return are assumptions, not forecasts: change them and the answer changes, which is itself the useful finding.
This answers one question in isolation. The playbook puts your answers in order and tells you which one to act on first.
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