Lease vs Buy Analysis
Compare the total cost of leasing versus purchasing an asset
📋 Asset Information
Your cost of capital / borrowing rate
📄 Lease Option
$
$
$
$
🏢 Buy Option
$
$
$
$
$
39 years for commercial real estate
📊 Analysis Results
LEASE
Net Present Cost
$423,456
Total Cash Outflow
$567,890
Tax Savings
-$141,973
Deposit Returned
-$17,000
VS
BUY
Net Present Cost
$468,686
Total Cash Outflow
$623,456
Tax Savings
-$89,234
Residual Value
-$234,567
📈 Year-by-Year Comparison
💰 Detailed Cash Flow Analysis
| Year | Lease | Buy | |||||
|---|---|---|---|---|---|---|---|
| Payments | Tax Savings | Net Cost | Mortgage + Costs | Tax Savings | Net Cost | Cumulative Diff | |
📝 Key Assumptions & Considerations
🔒 Lease Advantages
- Lower upfront capital required
- Flexibility to relocate/upgrade
- Maintenance often included
- No residual value risk
- 100% tax deductible payments
🏠 Buy Advantages
- Build equity over time
- Potential appreciation
- Interest deduction (tax shield)
- Depreciation tax benefits
- Control over property
⚠️ Not Included
- Opportunity cost of down payment
- Transaction costs at sale
- Potential vacancy if buying larger
- Renovation/improvement costs
- Market condition changes
🎚️ Sensitivity Analysis
How the recommendation changes with different assumptions:
| If... | Lease NPV | Buy NPV | Winner |
|---|