Buy vs rent tool
Buy vs rent with a rental suite
Rental income can turn ownership from a cost into a partly self-funding asset. Add a suite or roommate to the buy vs rent comparison and see the effect.
Example with default assumptions
After 10 years, buying finishes ahead of renting by about $221,534. On these assumptions buying overtakes renting after about 2.3 years, once selling costs are counted. The owner's first-month cash cost is $3,339, compared with $2,625 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $724,500 | $547,521 | $137,891 | $163,408 | −$25,517 |
| 2 | $749,858 | $534,473 | $175,377 | $180,331 | −$4,954 |
| 3 | $776,103 | $520,832 | $214,315 | $197,310 | $17,005 |
| 4 | $803,266 | $506,571 | $254,759 | $214,322 | $40,438 |
| 5 | $831,380 | $491,660 | $302,303 | $231,343 | $70,960 |
| 10 | $987,419 | $406,289 | $537,159 | $315,624 | $221,534 |
Check suite legality first
Before counting rent from a secondary suite, confirm with your municipality that the suite is permitted and meets safety codes, and tell your insurer. Income from an illegal suite is risky to depend on.
Questions people ask
Is suite income taxable?
Rental income is generally taxable, net of eligible expenses. The calculator applies the tax rate you enter.
Does a suite affect the principal residence exemption?
It can, depending on how the property is used. Ask an accountant before relying on a full exemption.
What vacancy should I assume?
The default is 5%. Use a higher number if the suite is hard to rent or seasonal.
Educational estimates based on your inputs; not advice. See the methodology and assumptions.