Bradford Rent or Buy Your Home Analyzer                                      
Copyright 2009 by W. Murray Bradford, CPA   Comments: Send e-mail to  
Step 1: Replace the sample data below with your data. (This is easy! See the results change in Step 2.)   Step 2: View your projected results! Note that you can see the projected results in three views below.  
Purchase of Home     Result View 1--Gross return (think compound interest)  
Price you will pay for the home?   Your safe investment rate before taxes is  
Down Payment?   Your compound rate of return on this home is  
Mortgage (calculated)   This return is better (worse) than your safe rate by  
Mortgage period in years? Use a fixed rate mortgage for your calculations.        
Mortgage interest rate? Result View 2--After-tax adjusted rate of return    
Monthly payment (calculated) Your safe investment rate after taxes is    
Points (percent)?   This home produces an after-tax annual return of  
Points (calculated dollar amount)   This return is better (worse) than your safe rate by  
Closing costs?        
Total Settlement costs (calculated)   Result View 3--After-tax cash profit (loss)    
Annual private mortgage insurance (PMI) cost?   In today's dollars (present value), you invest  
  In tomorrow's dollars (future value), you walk away with  
      This gives you a cash profit (loss) of    
Existing Rent     Number of years you will own this home  
Your current monthly rent?          
Expected annual increase in rent as a percentage (your best guess)?      
  The calculations above assume that you itemize your tax deductions and realize the tax benefits of home ownership.  
Current monthly utilities?    
Expected annual increase in utilities as a percentage?  
Home buyer tax credit  
Home sale exclusion ($250,000 single or $500,000 married)  
Federal tax rate on ordinary income?  
State tax rate on ordinary income?  
Federal tax rate on capital gains?  
State tax rate on capital gains?  
Investment Return    
Annual percentage return you earn on a safe investment? Your safe investment rate is the compound annual return you earn on a safe investment, like perhaps a CD at the bank.  
Tax rate (combined state and federal) that applies to this safe investment?  
After-tax safe return (calculated)  
Appreciation in Home Value    
Years you expect to live in this home as your principal residence?  
Anticipated average annual appreciation in home value?  
Selling price of home (calculated)      
Real estate commissions and closing costs on the sale of this home as a percentage of selling price?  
Home Ownership Costs    
Real estate taxes per year?  
Annual increase in real estate taxes?  
Repairs and maintenance per year?  
Annual increase in repairs and maintenance?  
Homeowners' insurance  
Annual increase in insurance?  
Utilities per year?  
Annual increase in utilities?  
Condo fees?  
Annual increase in condo fees?  
Other expenses?  
Annual increase in other expenses?  
The numbers you enter in the white spaces above are used to make the calculations below. These are the calculations that produce the results in this form.  
Calculated amounts to produce the results above.  
  Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year Year  
  1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 We built this spreadsheet to cover 21 years. If you need more years, simply copy and paste as needed.
Mortgage interest
Points (Year 1 deduction)                                        
PMI (Year 1 deduction)                                        
Real Estate Taxes
Tax-deductible cash outflows  
Repairs & Maintenance  
Homeowners' insurance  
PMI (Years other than year 1) N / A  
Utilities on home  
Condo fees  
Mortgage principal paid  
Closing costs (other than points, yr 1) N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A  
Down payment N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A  
Rent no longer paid  
Utilities on rental no longer paid  
Home buyer tax credit                                        
Tax paid (refunded) from deductions  
Cash outflow (inflow)  
Cash outflow only  
Applicable cash outflow  
Present value of applicable outflow  
Cumulative present value  
Cash inflow only  
Applicable cash inflow  
Future value of applicable inflow  
Cumulative future value  
Add net cash from sale of home  
Less taxes on sale of home  
Net cumulative future value  
Tax Deductions  
Tax Rate  
Tax Refund (Payment)  
Selling price of home  
Selling expenses and closing  
Net sales proceeds  
Payoff mortgage  
Net cash from sale  
Net sales proceeds  
Purchase price (basis)  
Gain (loss)  
Amount subject to tax  
Tax rate  
Taxes on sale of home  
  Year Beg/Prin End/Prin Pmts Int. Prin/Pay Total  

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