Real Estate Investment Analysis - Rent vs Buy Comparison

 

Notes:

• What problem does it solve?
  This code compares the total cost of renting versus buying a property over a specified period.

• How can businesses or users benefit from customizing the code?
  Homebuyers or investors can use it to assess whether it's more economical to rent or buy based on local market conditions.

• How can businesses or users adopt the solution further, if needed?
  This model can be expanded to include tax benefits, appreciation rates, and interest rate changes.

Actual Python Code:

class RentVsBuy:

    def __init__(self, rent_per_month, property_value, mortgage_rate, loan_term, property_tax_rate, insurance_rate):

        self.rent_per_month = rent_per_month

        self.property_value = property_value

        self.mortgage_rate = mortgage_rate

        self.loan_term = loan_term

        self.property_tax_rate = property_tax_rate

        self.insurance_rate = insurance_rate

    

    def rent_total(self):

        return self.rent_per_month * 12 * self.loan_term

    

    def buy_total(self):

        monthly_mortgage = self.property_value * self.mortgage_rate / 12

        monthly_taxes = self.property_value * self.property_tax_rate / 12

        monthly_insurance = self.property_value * self.insurance_rate / 12

        monthly_costs = monthly_mortgage + monthly_taxes + monthly_insurance

        return monthly_costs * 12 * self.loan_term

    

    def compare(self):

        rent_cost = self.rent_total()

        buy_cost = self.buy_total()

        if rent_cost < buy_cost:

            return "Renting is cheaper."

        else:

            return "Buying is cheaper."

# Example usage

comparison = RentVsBuy(rent_per_month=1500, property_value=300000, mortgage_rate=0.04, loan_term=30, 

                      property_tax_rate=0.01, insurance_rate=0.005)

print(comparison.compare())