Why I’m Falling For Trulia

said on June 17th, 2010 categorized under: Buying A Duplex

love heartI fell in love today.

With Trulia.

While I’m generally not a fan of web sites like Zillow and Trulia, largely because much of inaccuracies in property valuations, I may be coming around on the latter.

All because of the addition of a cool little Rent vs. Buy widget in the sidebar of their recently added Rental section.

To make the decision whether it’s smarter to buy a specific property or rent, the calculator asks for the property price, the size of the down payment, the amount of monthly rent you’re paying, and the number of years you’re planning on comparing.

Let’s say we found a $280,000 duplex near one of the lakes with two bedrooms in each unit.  Renting one of the units costs $1100/month.

Over 30 years, Trulia estimates simply being a tenant in the place would cost you $396,000.

On the other hand, buying it would cost $586,217 in mortgage payments. However, Trulia also takes into account things like tax savings, opportunity cost and home appreciation.

When their widget calculates all these factors, it estimates buying that duplex would actually save you approximately $18,625 over 30 years.

Of course, their widget was structured for a single family home.

It doesn’t factor all the rent you would collect. Even if it was just $1100/month over 30 years, with a 5 percent vacancy rate, that would equal an additional $376,200 in income/savings. (Inflation would make that figure greater still.)

It also doesn’t consider that if you rent, that money is your landlord’s. Meanwhile, if you buy, you can eventually sell the property and walk away with the equity.

I wonder if anyone’s ever written a love song for a Widget…