Looking for a new place to live is a challenge. There are many things to consider. What size place do you need? What neighborhood are you going to live in? What luxuries will you require? Do you rent the place, or do you buy it?

This last question can be a doozy. Sometimes, renting is clearly the better option (check the first sidebar at the end of this article 12 reasons this is the case); sometimes, buying clearly makes more sense (the second sidebar at the end of this article gives 11 reasons you should buy). Often, however, the rent or buy question simply comes down to which option is the better investment. That used to involve guesswork. Not now!

Do not swat any flies with this article, because you will want to keep it pristine. After a survey of the financial and tax factors that influence home purchase, we will introduce you to, and explain, the one formula that allows you to project the exact financial outcome of your intended home purchases. This is a landmark article—it is the first time we have published the Bradford Formula.

The formula takes the confusion out of the many factors that go into the home purchase decision. (You got a taste for those factors when you checked the buy/rent sidebars.)

The sections below are designed to help you use the formula more effectively. For example, how home prices have behaved for the past 38 years gives you a solid platform from which you can make projections. You can affect ... Log in to view full article.