Arlo Finance
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Rent Vs Buy - The Simulation
That Changes Minds

March 24, 2025 | 4 minutes read time

Renting often appears more affordable in the short term, but the long-term financial implications tell a different story. Let's examine how homeownership compares when we simulate both paths over time.

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Consider a typical renter paying $550 per week:

  • Monthly repayments are approximately $3,450
  • Assuming a 7% annual capital growth rate, the property could appreciate by $240,000+ in 5 years
  • Add around $40,000 in loan principal reduction

Total equity accumulated: $280,000+

The opportunity cost of renting instead of owning could exceed $200,000 in just five years.

Note: These figures reflect an owner-occupier scenario. For rentvestors, the financial outcomes differ based on structure, deductions, and investment loan variables.

WHY THIS MATTERS

Many renters delay purchasing due to perceived affordability issues. But the long-term equity growth from homeownership often outweighs the short-term savings from renting.

WHAT TO DO NEXT

If someone is renting and unsure whether they could buy, we can run a simulation to model both outcomes. A quick comparison may shift their entire financial trajectory.

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