How this calculation works
Both paths start with equal capital. The renter invests the deposit and upfront buying costs. Each month, whichever path has lower housing outgoings invests the difference. The buyer’s ending wealth is sale proceeds less selling costs and remaining bond, plus that side’s investments. Rent and owner costs rise annually.
A worked example
With zero growth, zero interest, no costs and a R120 000 home funded by a R12 000 deposit and R108 000 paid over 12 months, rent-free accommodation allows the renter to invest the buyer’s R9 000 monthly repayment. Both then have R120 000 at year end.
Assumptions & limitations
- This is a constant-assumption comparison, not a prediction. It assumes monthly end-of-month investments and equal available monthly budgets; investment returns entered must be after fees and tax.
- Taxes on sale, moving costs, insurance not entered in owner costs, investment volatility and rental deposits are excluded. A cash shortfall still requires available income.
