Austin TX rent vs buy breakeven calculator

Hyde Park / North University area — compare net wealth: buying vs renting and investing

Key Austin differences vs coastal markets: Texas has no state income tax (lower marginal rate for deductions), but property taxes are much higher (~1.8% vs ~1.2% in SF/CA) and reassessed at market value annually (no Prop 13 cap). No city transfer tax on sales. TX homestead exemption reduces taxable value by ~$100k. Austin home values have been flat to declining since 2022.

Purchase & financing

Purchase price

Down payment %

Mortgage rate

Mortgage term

Property tax rate (all entities combined)

TX homestead exemption (off assessed value)

Ownership costs

Monthly HOA ($0 for single-family)

Annual HOA growth

Monthly insurance

Annual insurance growth

Annual maintenance (% of home value)

Roommate rent offset

Transaction costs

Buyer closing costs %

Selling costs % (commission + misc)

Renting scenario

Comparable rent

Annual rent increase

Appreciation & investment

Annual home appreciation

Renter's portfolio return

Tax benefit

Marginal federal tax rate (no TX state tax)

Filing status (sets standard deduction baseline)

Tax benefit counts only the excess of mortgage interest + property tax (SALT cap $40k) above the standard deduction. If itemized deductions don't exceed the standard deduction, the tax benefit is $0. TX has no state income tax, so the deduction is worth less than in CA. Set marginal rate to 0% to disable entirely.

Breakeven year

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2-year gap

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5-year gap

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Monthly cost (buying, year 1)

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Net after roommate + tax benefit

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Buy: net wealth if sold in year N Rent: portfolio from investing instead

Year-by-year detail

Buy net = home value − loan balance − selling costs − initial cash (DP + buyer closing) + cumulative tax savings + buyer's invested surplus. Rent net = initial cash invested at portfolio return + renter's invested surplus. Both sides invest monthly surplus symmetrically at the portfolio return rate. Tax benefit = marginal rate × max(0, mortgage interest on first $750k + property tax up to $40k SALT − standard deduction). TX property tax is assessed at market value annually (grows with appreciation), minus homestead exemption. Excludes PMI if <20% down, renter's insurance (~$20/mo), and capital gains exclusion on sale ($250k single / $500k married if 2+ yrs primary residence).