Question

Purchasing A Home versus Renting A Space

Step 1: Identify a home in your area (or wherever you'd like to live).

Step 2: Based on the price of the home, determine how much it would cost you on a monthly basis to purchase that home. Your payment will consist of Principal, Interest, Taxes, and Insurance (PITI).

Note: Use current 30-year interest rates; Assume 5%-10% downpayment; The "insurance" in the PITI is not property coverage, it is insurance to protect the lender in case you default on the loan.

Step 3: Identify a comparable rented space and compare that cost to the monthly cost in Step 2.

Step 4: Give the comparison in an Excel spreadsheet or Word file.  

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Answer 1

Please see the table below. Please be guided by the second column titled “Linkage” to understand the mathematics. The last row is your answer. Figures in parenthesis mean negative values. All financials are in $.

I can't give you a spreadsheet. But you can understand the things from the table below and create your won spreadsheet.

Sources have been mentioned towards then end.

Location		Houston, Texas
Option	Linkage	Buy	Rent
Average Home Price	A	200,9001
Down payment	B	10%
Loan funding	C = 1- B	90%
Loan amount, PV	D = C x A	180,810
Tenure (years)	E	30
30 year interest rate	F	3.82%2
Inputs for PMT function
i	G = F / 12	0.3183%
n	H = 12 x E	360
PV	-D	(180,810)
FV	I	0
Payment per month (Principal + interest)	J = PMT (G, H, -D, I)	844.56
Insurance + taxes payments per month	K	200.00
Rental per month	L	-	1,548.003
Total monthly outgo	J + K + L	1,044.56	1,548.00

Sources:

^{1, 3}https://www.thebalancesmb.com/best-places-to-buy-rental-property-2018-4177639

²https://ycharts.com/indicators/30_year_mortgage_rate