Trulia debuted its new Rent vs. Buy Calculator today, a tool that enables users to determine whether it is cheaper to rent or buy in any market based on their preferences and income.
The calculator, which Trulia’s chief economist said is unsurpassed in sophistication, lets a user set a target monthly rent and target home price to see whether renting or buying would be cheaper on a monthly basis and by exactly how much.
By tweaking a home price, a renter considering buying could pinpoint the price of a home that would cost the renter the same on a monthly basis as that person’s current or target rent.
The tool has the capacity to factor in a wide array of data points that impact rent and buying costs. ”There’s nothing else like it,” said Trulia Chief Economist Jed Kolko in unveiling the calculator at a luncheon that Trulia hosted on Wednesday to celebrate the first anniversary of its initial public offering.
They include: the person’s intended stay in a home, tax bracket, mortgage rate, buying closing costs or selling closing costs, property taxes, rent insurance, homeowners insurance, utilities, down payment and mortgage term.
The calculator even weaves in certain “economic assumptions”: rent appreciation, renovations, discount rate (which reflects the opportunity cost of forking over money for upfront buying costs instead of investing that money), home price appreciation and inflation.
The more sophisticated data points, like the “economic assumptions,” have default settings that a user may change only by clicking on “Advanced Settings,” preventing the tool from overwhelming consumers.