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Rent vs. Buy

This compares your total net worth under each path — not just the payment. Both scenarios start with the same cash and spend the same amount every month; whichever is cheaper invests the difference. That's the only framing that doesn't quietly favor buying.

The home

Purchase price

Down payment

Interest rate

Rent you'd pay instead

HOA per month

Mello-Roos per year

Common in newer Inland Empire and South OC communities. Often $2,000–$5,000/yr and it does not go away quietly.

The two rates that decide this

Home appreciation per year

Return on money you don't put into a house per year

These two numbers matter more than the interest rate. Move them and watch the break-even swing by twenty years. Anyone who shows you a rent-vs-buy answer without showing you these is selling you something.

Carrying costs & growth

Property tax rate

Prop 13 resets assessed value to your purchase price, then caps growth at 2%/yr. Most of SoCal is 1.05%–1.30% including bonds.

Insurance % of value/yr

Maintenance & repairs % of value/yr

From managing properties: 1% is the honest long-run average once you include the roof, the HVAC, and the sewer line.

Rent growth per year

Cost to sell later

Closing costs to buy

Tax treatment Include the mortgage interest & property tax deduction

Marginal tax rate

Standard deduction

Itemizing only helps to the extent it beats this. Many buyers get less benefit than they expect.

SALT cap

Verify for the current tax year — this limit has changed recently and is scheduled to change again.

Mortgage interest is deductible only on the first $750,000 of loan balance. That bites in Southern California, and the model accounts for it.

Compare over

Buying pulls ahead in

—

Cost to own /mo

—

year one, all in

Cost to rent /mo

—

year one

Cash to close

—

down + closing

Equity at year 10

—

value less balance

Net worth over time

Buying assumes you sell at that year and pay selling costs. Renting assumes the down payment and every monthly saving stay invested.

How much do those two rates matter?

Break-even year for your inputs across a range of assumptions. Your current setting is outlined. If the answer moves this much, treat any single number — including mine — with care.

Year by year

Year	Home value	Loan balance	Equity	Net worth if buying	Net worth if renting	Difference

Estimate only, for education. Not a loan estimate, appraisal, or tax advice. Historical rates shown are rounded long-run averages from public sources, not predictions. Your actual result depends on the specific property, your loan terms, your tax situation, and market conditions nobody can forecast. Confirm every figure with your lender and a tax professional.