1. What is the Rent vs Buy Breakeven Calculation?

The breakeven calculation helps determine after how many years buying a property becomes more financially advantageous than renting in the Indian real estate market. It considers purchase price, closing costs, rent savings, and time period.

2. How Does the Calculator Work?

The calculator uses the breakeven formula:

Where:

• \( Purchase\ Price \) — Total property cost in INR
• \( Closing\ Costs \) — Additional purchase expenses in INR
• \( Rent\ Savings \) — Annual rent savings in INR
• \( Years \) — Time period for comparison

Explanation: The equation calculates the annualized cost difference between buying and renting a property.

3. Importance of Breakeven Analysis

Details: Breakeven analysis is crucial for making informed decisions about whether to rent or buy property in India, considering factors like market conditions, interest rates, and personal financial situation.

4. Using the Calculator

Tips: Enter all values in INR. For accurate results, include all associated costs when calculating purchase price and closing costs. Rent savings should reflect your current annual rent.

5. Frequently Asked Questions (FAQ)

Q1: What's included in closing costs?
A: In India, this typically includes stamp duty, registration fees, legal charges, and brokerage (usually 4-8% of property value).

Q2: How do I calculate rent savings?
A: This is your current annual rent minus any maintenance costs you'd pay as an owner.

Q3: What is a good breakeven point?
A: Generally, if breakeven is less than 5-7 years, buying may be favorable in Indian markets.

Q4: Should I consider home loan interest?
A: Yes, include total interest paid during the period as part of your purchase price calculation.

Q5: What about property appreciation?
A: This simplified model doesn't account for appreciation, which could significantly impact results in growing Indian markets.