Housing & wealth

Overview

Compare buying with renting and investing. Personal and corporate cash flows remain separate throughout the model.

Section

Using profile values

Overview

Compare buying with renting while keeping personal and corporate cash flows separate.

Highest modelled net worth

Rent + Invest

Highest modelled outcome

Under the assumptions entered, the highest modelled 15-year path is Rent + Invest.

$1,742,643

Tax-adjusted wealth · $70,351 above second-highest modelled path

What drives this model result

Keeps the down-payment capital invested and more liquid.
Avoids concentrating household wealth in one property.

What could change the model result

Buying wins if home appreciation exceeds 4.4%/yr.
Renting weakens if rent inflation exceeds 4.2%/yr.

Buy Home

$1,672,292

Tax-adjusted net worth · pre-tax $1,752,212

Personal liquid$303,765Corp (before tax)$223,248Corp (after tax)$156,273Home equity after selling cost$1,225,199Total rent paid$108,090Total mortgage paid$770,434

Liquid share17%

Home-price dependent17% liquid

Main weakness: More wealth is concentrated in an illiquid property and selling costs matter.

Rent + Invest

Highest modelled outcome

$1,742,643

Tax-adjusted net worth · pre-tax $2,152,556

Personal liquid$948,038Corp (before tax)$223,248Corp (after tax)$156,273Home equity after selling cost$0Total rent paid$669,561Total mortgage paid$0

Liquid share44%

More liquid44% liquid

Main weakness: No home equity; the outcome depends more on investment returns and the future rent path.

Projected net worth

Tax-adjusted wealth by year under the two modelled housing strategies.

Liquidity composition

A composition view of modelled final wealth. Home equity and corporate wealth may be less accessible than personal investments.

Buy Home

Final tax-adjusted asset composition

$1,685,238

Cash / personal investments

8% · $132,204

TFSA / RRSP value

10% · $171,562

Home equity

73% · $1,225,199

Corporate value after extraction tax

9% · $156,273

Rent + Invest

Final tax-adjusted asset composition

$2,085,582

Cash / personal investments

27% · $573,054

TFSA / RRSP value

65% · $1,356,255

Home equity

0% · $0

Corporate value after extraction tax

7% · $156,273

This calculator is for educational modelling only. It is not financial, tax, legal, mortgage, or investment advice. Incorporated professionals should review decisions with their accountant, tax advisor, lawyer, and financial planner.