Every assumption below is yours to move. The model carries a 30-year fixed mortgage
month by month — amortization, PMI, the Texas 10% homestead assessment cap, insurance and rent
inflation — against a renter who invests the down payment, the closing costs, and every dollar of
the monthly difference.
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—
Buy · net after selling
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Rent + invest · after tax
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Difference
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Scenarios
The House
The Rental
The Market
Costs & fine print
Net worth, year by year
Buy — home equity after sale costsRent — portfolio after capital gains tax
What it costs to own, month one
Line item
Monthly
Per year
Breakeven rent
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Breakeven appreciation
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Crossover
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Holding period changes everything
Buying costs roughly 2% going in and 5.5% coming out. Over
a short hold that friction never gets amortized, so the appreciation rate needed to break even
climbs steeply the sooner you sell. This table recomputes that hurdle at your current settings.
Sell after
Buy
Rent + invest
Difference
Appr. needed
Two things this model cannot know
Whether the renter actually invests. Every dollar of the monthly
gap has to reach a brokerage account, every month, without fail. A mortgage is forced savings —
badly priced, but forced. If the surplus gets spent instead, buying wins on behavior even when it
loses on arithmetic. Set the stock return to zero to see that world.
Which way the correlation runs. The model
treats home appreciation and stock returns as independent dials. They are not. Falling rates tend
to lift both, and a recession tends to take both down. Move them together before trusting any
single reading.