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Should you buy or rent?

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The decision to buy or rent your home can be a big one–it’s both personal and financial. If you buy, you tie up capital that could be put to use elsewhere. But if you rent, you don’t get to participate in any of the upside should home prices appreciate.

To help with this decision, the New York Times recently put together an online calculator. It takes into account the opportunity cost of your capital, inflation rates, the expected home price growth rate, and a myriad of other factors. It’s the most detailed of these types of calculators I’ve ever seen.

If you’re thinking about this decision, you may want to take a look. Although, keep in mind that it’s a US model and in the US you can deduct the mortgage interest on your principal residence. You can’t do that in Canada.

I also wrote a post a few months ago called: What I see as the fundamentals of real estate investing. You’ll find it interesting if you are, in fact, thinking about buying or investing in real estate anytime soon.

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