Relative Leasing Advantage: A Blended Methods Approach
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Relative Leasing Advantage: A Blended Methods Approach
de Sousa Camposinhos, Rui | Lello, José
German Journal of Real Estate Research, Online First : pp. 1–31 | First published online: November 13, 2025
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Rui de Sousa Camposinhos, School of Engineering, Polytechnic of Porto
José Lello, School of Engineering, Polytechnic of Porto
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Abstract
Abstract
This paper presents a streamlined framework to assess the relative advantage of leasing versus owning in real estate (“Buy vs. Rent”). The model prioritizes transparency and ease of use for practitioners operating under heterogeneous, data-constrained local markets. Combining cost-based and income-based valuation, we derive closed-form decision rules for investors/landlords and tenants. The framework avoids heavy stochastic machinery by design, trading granularity for portability across contexts. We document how key inputs (yields, operating costs, taxes, maintenance) shift thresholds for the leasing/ownership choice and provide worked examples to illustrate practical use. We also delineate scope and limitations, and outline how policy changes (e. g., rent control) would map into the model’s primitives. The result is a replicable tool for decision-making where simplicity and interpretability are paramount.