Tip:
Highlight text to annotate it
X
The Rent-vs-Own calculator can be a very useful sales tool.
I'll click on P rospects
and open a prospect record.
We want the third tab down on the left.
The Rent-vs-Own calculator.
As you can see, there are four tabs across the top.
You will just go through each tab
and answer the questions.
What the calculator will do
is figure out the relative advantages
of owning verses renting
for a period of say five years.
Will your prospect be better off
if they purchase a home and sell it after five years,
or if their rent it for five years?
Often people don't realize how beneficial it can be to own home,
and this calculator really lays it out for them in black and white.
So let's go through the process
starting with the Rent tab.
Let's say my rent is one thousand dollars a month.
I expect my rent to go up by five percent each year,
and renters insurance will cost me two hundred and fifty dollars a year.
If there are any other expenses I'll have to pay if I choose to rent
I can fill those in here.
Let's go on to the Own tab
how much would it cost me to buy a home equivalent to the one I would rent?
Let's say one hundred thousand dollars
and all get a fixed rate loan
with twenty percent down
at four point seven five percent.
Interest rates are pretty well right now.
For the taxes PMI, home insurance and other expenses
I can just click on estimate taxes at the top
and RealtyJuggler will estimate my taxes
based upon my purchase price.
Notice that the PMI is zero,
because I put twenty percent down.
The Buy/Sell Tab
cover some basic assumptions.
How long will they stay in the home?
What expenses will incur by buying and selling?
For instance, what closing expenses will I have?
how much will I have to pay in sales commissions
when I sell the home?
We also ask about your income tax rate
because the tax benefits of owning a home have a lot to do with your tax rate.
Finally, I'll click on the results tab
and RealtyJuggler will work out the benefits
of buying vs renting.
If it's more beneficial to rent
we'll lay that out.
But in this case,
it's more beneficial to purchase a home,
live in it for five years and sell it,
rather than rent an equivalent home for five years.
Quite a bit more beneficial. In fact, a difference of sixty two thousand four hundred fifty four
dollars.
This page also goes over the details.
An eighty thousand dollar loan,
at four point seven five percent,
with twenty percent down.
You can see your monthly payments,
your mortgage, and taxes,
and your total home ownership expenses.
We'll even work out what your interest expenses and taxes will be
and assuming your interest is tax deductible,
you'll get a benefit from that as well.
On the renting side,
we have the expense of your rent,
and we assume that the money you're not putting into a down payment
will go into a good investment,
like government bonds
so you'll get some gains from that.
In this case
six thousand two hundred dollars.
You can click on the download/print report button at the bottom of the screen
to download this information as a file that you can open in Microsoft Word.
And, as you can see
it's just a clear summary
in plain english.
It makes a lot of sense.
As you can imagine,
a report like this can be a very compelling argument for purchasing a home.
That means its a great sales tool.
In fact, that's why it's in the Prospects section -
So you can show a first-time homebuyer in black and white
exactly why they should own
or rent.