Rent or buy: how to do the honest calculation

Add up all payments: rent, utilities (if not included) and internet. This is your full monthly housing cost when renting. The deposit is a temporary outlay that will be returned; spread any agency fee over the rental term.

Renting allows you to change jobs, cities or countries without losing your investment. This flexibility has real financial value — especially if you are early in your career or work in an unstable sector.

If you rent, the down payment you are not paying continues to sit in a deposit account earning a return. This return reduces the real cost of renting. Include it in your calculation — otherwise the comparison is dishonest.

Add to the monthly payment: property tax, property insurance, building management costs. In the early years, up to 70–80% of the payment goes on interest, not on repaying the debt.

The international standard is to budget 1–2% of the property value annually for upkeep and repairs. Owners often overlook this until it is time to replace pipes or windows.

Notary, registration, valuation, agent fee — 3–6% of the price on purchase. On sale — another 2–4%. In total, 5–10% of the flat's value 'disappears' just on entering and exiting. If you plan to stay fewer than 5–6 years, this one-off cost is hard to recover.

In many countries the gain from selling property held for fewer than 3–5 years is taxable. Check Kyrgyzstan's rules before buying: in some cases the tax wipes out the entire appreciation in the property's value over the first few years.

Add up all one-off costs on buying and selling. Divide by the monthly difference between the full cost of renting and the full cost of owning. The result is the number of months after which buying starts to 'win'. In most cities in the region this is 5–8 years.

If you plan to stay in the city for fewer than 4–5 years, renting is almost always financially superior. If annual rent for a comparable flat is less than 4% of its price, the market is overvalued and buying is uneconomical. If the down payment wipes out your entire buffer, after buying you are living without a financial safety net — which is dangerous.

A long horizon (7+ years), stable income, a down payment that leaves your emergency fund intact, high rent relative to price — under these conditions buying is generally more effective. Also worth noting: if the feeling of owning your own home has high personal value to you, that too is part of the calculation.