Rent vs. Buy in New Jersey
New Jersey has some of the highest property taxes in the country, so the rent-vs-buy math looks different here. This tool compares your ending net worth from buying versus renting over your holding period — using real county-average tax rates and a fair, same-monthly-budget investment model where the difference is always invested.
Your numbers
County rates are approximate county averages that vary a lot by municipality — pick your county to auto-fill, then edit the tax rate to match your town's actual effective rate.
Result after your holding period
Year-by-year net worth
Both sides spend the same total each month (the larger of the two housing costs); whoever spends less invests the difference. Net worth is measured as if you sold and cashed out at the end of that year.
| Year | Buyer net worth | Renter net worth | Buyer advantage |
|---|
How this works
We run the comparison month-by-month over the years you plan to stay, then measure the ending net worth of each path — the cleanest apples-to-apples comparison because both paths use the exact same monthly budget and the leftover cash is always invested.
Buying. You pay the down payment and closing costs up front (money tied up in the home). Each month you pay mortgage principal & interest, property tax, homeowners insurance, maintenance, and any HOA fee. The home value grows at your appreciation rate; property tax each year is that year's value times the tax rate. At the end we sell: sale proceeds = future value − selling costs − remaining loan balance. Your buying net worth = sale proceeds + any side investments (see below).
Renting. You pay rent (growing each year) plus renter's insurance. Because you didn't tie up a down payment, you start with (down payment + buying closing costs) invested, and each month you invest whatever you don't spend on housing. Your renting net worth = that investment balance.
Same budget, difference invested. Each month the total budget equals the larger of the two housing costs. Whoever spends less invests the difference at your investment-return rate. This keeps monthly spending identical on both sides, so the only thing being compared is where the money ends up — home equity vs. a portfolio.
Honest assumptions. The answer is very sensitive to three guesses: home appreciation, rent growth, and investment return. Small changes there can flip the result. This model ignores income-tax effects — notably the federal SALT deduction cap, which especially limits the tax benefit of NJ's high property taxes — and ignores transaction frictions beyond the closing/selling costs shown. The property tax rate is an approximate county average; your municipality's effective rate may be materially higher or lower. Estimates are educational, not financial advice.