FreeTools Labs Glossary
Buying, renting and leasing
Learn how up-front costs, recurring payments, financing and residual value change a comparison over its chosen term. Monthly payments alone do not tell the whole story.
Relevant tool
Buy, Rent & Lease Calculator
Compare property renting, buying, rental returns and vehicle leasing.
Open Buy, Rent & Lease Calculator →This calculator compares entered purchase, rental and vehicle scenarios over a chosen period. A lower number in one scenario is a model result for those entries, not a recommendation to buy, rent, finance or lease.
What the model calculates
This calculator compares entered purchase, rental and vehicle scenarios over a chosen period. A lower number in one scenario is a model result for those entries, not a recommendation to buy, rent, finance or lease.
Inputs and available paths
Property comparison includes renting and owner occupation; a rental-property path shows gross yield, NOI, net yield, annual cash flow and cash-on-cash return. Vehicle paths compare cash purchase, financing and leasing; the lease path uses capitalised cost, residual value and money factor.
Calculation model
For a property purchase, the tool tracks equity, purchase costs, loan payments, owner costs, appreciation, sale costs and remaining debt. Rent uses monthly rent, annual increase, extra monthly costs and initial costs. Vehicle financing retains future vehicle value less remaining debt, while leasing does not create ownership equity.
Implemented relation
Net equity at sale = property value − sale costs − remaining debt; net purchase cost = all purchase cash outflows − net equity at sale.How the paths work
The first full year in which modelled net purchase cost is no higher than total rent is labelled as the break-even year. Rental NOI is annual gross rent after vacancy minus annual operating costs; annual cash flow subtracts debt service. The money-factor conversion × 2400 is only an approximate APR orientation.
Checked example
The fixed ten-year example shows why a rate alone is insufficient: cash flows, residual debt and the value assumed at sale all affect the comparison.
10 years: rent €1,200/month with 2% annual increase → €157,675.98. Purchase price €250,000, €50,000 equity, 4% loan, 25 years, €250/month owner costs, 1% appreciation and 3% sale costs → net purchase cost €91,528.77; difference −€66,147.21.
Assumptions, display and interpretation
All values use one entered currency without exchange conversion. Annual changes and residual values are scenario assumptions; negative results remain visible as scenario outcomes. The calculator does not automatically invest money that was not spent in another scenario.
Scope and limits
Taxes, legal costs beyond entered values, live offers, credit checks, insurance, maintenance surprises and opportunity costs are not inferred. The result is not personal purchase, leasing, rental or financing advice.