How we calculate
Buy net worth = appreciated property value minus the financing balance. Rent net worth = the down payment plus the monthly difference between the cost of buying and renting, compounded at the alternative return rate.
Formula used
Buy net worth = appreciated property value − financing balance. Rent net worth = down payment and monthly differences invested, compounded monthly.
Patrimônio comprando = valor do imóvel valorizado − saldo devedor · Patrimônio alugando = entrada + diferença mensal investidas a juros compostos
Practical example
A R$ 400,000 property with 20% down, financed over 30 years at 10.5% a year, compared to R$ 2,000 monthly rent, with 4% annual appreciation and a 10% alternative return.
How to interpret the result
Pay attention to how the two curves evolve over time, not just the final value.
Limitations
Does not include transaction costs (transfer tax, notary fees, brokerage) or property maintenance, and assumes constant rent and condo fees.