A few days ago, Rhonda over at RCG made a post titled The Great Rent vs. Own Debate in which she attempted to prove that even in today's totally out-of-whack housing market, purchasing a home is still a better financial decision than renting. Obviously I disagree with her assessment.
The main problem I have with Rhonda's post is the overly simplistic nature of the comparison. Chief among her oversights were the omission of maintenance cost of the purchased property, overestimation of the purchaser's tax benefits, and not adding the renter's monthly savings to their investment.
In order to properly respond to her post, I have begun to put together a spreadsheet that will compare the financial situations of renting vs. purchasing (I won't say "owning" since you don't actually own it until you've paid off the mortgage). However, before I get my Excel on in a post of its own, I want to get some feedback about what factors should go into the calculation. Here's what I've got so far:
So what am I leaving out? I'd like to make this financial comparison as complete as possible, and I'd appreciate any help you all have to offer. Thanks!
Update: Wow, thanks for all the feedback, everyone! I received more emails about this post than any post yet. It will take me a little while to update my spreadsheet to incorporate your ideas. I doubt I will be able to account for every suggestion, but I will do my best to make it as comprehensive as possible.