Nicole Lapin

But I like to go back to the numbers.

Listen, I was a poetry major.

I did not get my MBA.

So...

I am not a numbers girl in the traditional sense, but when you stick to the numbers in these types of conversations, it actually strips out a lot of the emotion.

So there are a few things to think about that quantify this subject of renting versus buying.

One of them is the 5% rule.

So the 5% rule says take 5% of what that purchase price is.

And what goes into that would be everything you can't

earn back.

So everything you waste.

So 1% to maintenance, 1% to property taxes, 3% to the opportunity cost.

Because if you look at apples to apples, you're actually needing to look at the full housing costs, not just rent versus mortgage, because you're not taking into account the stuff that you don't get back.

The equity you will get back later.

Everything else, like you're not getting your property taxes back.

You're not getting the maintenance back and you're not getting the opportunity cost of investing in the market.

The investment opportunity cost.

Housing historically has yielded 3% to 5%.

Well, the thing that you want to look at to equalize this is the price to income ratio.

So this will tell you over time how much...