This calculator compares rentvesting against buying your own home in New Zealand, two genuinely different strategies for the same money. Buying your own home is the traditional path: you live in the home you own, pay no rent, and the capital growth is yours. Rentvesting flips it around: you rent the home you live in, often somewhere you could not afford to buy, and put your deposit into an investment property in a more affordable area instead, getting onto the ladder as an investor while keeping the flexibility of renting. Which builds more wealth comes down to the interplay of capital growth and yearly cash cost. You enter the value of the home you would buy and the investment you would buy instead, your deposit, the mortgage rate, expected capital growth and the period, then the yearly property costs for each and the weekly rent you would pay and the rent the investment would earn. The calculator estimates each path's net wealth change, being capital growth minus the yearly cash cost over the period, and points to the stronger option. It is a simplified interest-only model that ignores tax and principal repayment, so use it to understand the trade-off rather than as a precise forecast. Estimate only, not financial advice.
Simplified interest-only model; ignores tax, principal repayment and price changes over time. A negative figure means cash costs exceeded growth over the period. Estimate only.
For each option, interest is the property value minus your deposit, times the mortgage rate. Capital growth is the value compounded at the growth rate over the years, minus the starting value. Buying your own home costs interest plus home costs each year. Rentvesting costs the rent you pay plus the investment's interest and costs, less the rent the investment earns. Net wealth change is the capital growth minus the total cash cost over the period.
Buying a 700,000 dollar home grows about 336,000 dollars over 10 years at 4 percent but costs roughly 440,000 dollars in interest and costs, a net of about minus 104,000. Rentvesting a 600,000 dollar investment grows about 288,000 but the net rent and costs leave it near minus 113,000. Buying your own home is about 9,000 dollars ahead here.
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