Lease vs. Buy Analysis
Market Rental Rate vs.
Purchase
1500 SF
X $7.50SF - $8.00SF
Rent
→ $11,250yr /$937.50mo $12,000yr
/ $1000mo
↓ ↓
Amount of Purchase You can
Finance @ 7.25% Figured on 100% Financing
15yr $102,699
$109.545
20yr $118,614
$126,522
25yr
$129,703
$138,350
30yr $137,428
$146,590
plus – depreciation
– tax savings
plus – equity – you
end up owning the asset as apposed to leasing
plus – appreciation
– you also realize an increase in the value of your real estate
Purchase Example with
7.25% Loan and 25 Year Amortization
Unit 31 or
32
$139,700
Less 20% Down
payment
27,940
Balance
$111,760
Monthly
Payment
$ 807.81
Interest (year
1)
$ 8,048*
Depreciation (39 year
straight) $
3,582*
*Total
Deduction $ 11,630*
(You should consult your
accountant for actual qualified accounting advice)