Rent or Buy Your Home…Which is Better?

Rent or buy? Gosh, isn’t that the $64 Million Dollar question? And as many things go in real estate, the answer depends on your circumstances.

Keys to Success When Buying a Home

Smart Tips for Buying Your Home

Let’s start with the current state of rentals here in Phoenix.

In the ARMLS rental database the overall average lease rate for active listings is $1,820 per month and the average sq. ft. is 1,932. For apartments, the average rent is $1,568 with an average sq. ft. of 1,102 giving us an average rent of $1.42 per sq. ft. A year ago the rate was $1.22 per sq. ft., so the rise in asking price is 16.6% in just 12 months. The number of active apartment rental listings has declined 10% from 643 to 578 since last year.

In  nutshell, rents are rising and there are fewer homes to rent. And by the way, who wants to live in an apartment? Seriously. So let’s just focus on the houses.

If you are paying $1820 a month to rent a house, you might be thinking that you could be spending that money on a mortgage payment instead. For a low down payment, FHA-type loan, that gets you about $265,000 in house spending dollars. That gets you into a pretty nice house! But is it still better to buy or rent?

Reality time…

Check out this great rent-vs-buy calculator that the NY Times put together. It factors in all the costs of both buying and renting, and analyzes the pay-off for each. Given the scenario above, spending $1800 in rent vs $1800 in mortgage (plus taxes and insurance), if you are staying put for at least 2 years, buying will probably be the better choice, financially speaking. If  you are spending $1500 in rent, but could buy an equivalent house for $225,000, in two years, you will be ahead if you buy instead of renting.

Given the current climate in Phoenix right now, if you stay at least 2-3 years at the same address, you will most often  spend less if you buy a home rather than renting an equivalent home.

Of course, there’s the matter of the down payment…for an FHA loan, you must put down at least 3.5% of the purchase price for your down payment. Add to that closing costs, and you are looking at about $13,500 in cash. Yikes!

But start thinking you will never live long enough to make this dream a reality. It is possible to negotiate with the seller to add the closing costs to the purchase price, effectively financing those closing costs. AND you might be eligible for on of the down payment assistance programs that could cover the down payment. With $1000-2000 in your pocket, you could cover the remaining costs. Now that’s a pretty sweet deal!

Check out homes in the East Valley – Mesa, Tempe, Chandler and Gilbert – that might make great alternatives to renting…

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2933 E Caballero Street Mesa 85213, Alamos East 1 Lot 1-94

$240,000
Bedrooms: 4
Baths: 2
Sqft: 1,345
MLS: #6056102
Broker: HomeSmart
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8201 E 3rd Avenue Mesa 85208, Desert Sage Tr 4

$150,000
Bedrooms: 2
Baths: 1
Sqft: 804
MLS: #6056827
Broker: eXp Realty
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8664 E Crescent Avenue Mesa 85208, Wynstone

$245,000
Bedrooms: 3
Baths: 2
Sqft: 1,245
MLS: #6058200
Broker: Altus Realty LLC
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143 S 111th Place Mesa 85208, Signal Butte Manor 2

$235,000
Bedrooms: 3
Baths: 2
Sqft: 1,300
MLS: #6050153
Broker: Walt Danley Christie's International Real Estate
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1230 E 9th Avenue Mesa 85204, Gable Village

$241,900
Bedrooms: 3
Baths: 2
Sqft: 1,145
MLS: #6054002
Broker: Realty ONE Group
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11257 E Camino Street Mesa 85207, Dave Brown AT Mountain & University

$225,000
Bedrooms: 3
Baths: 2
Sqft: 1,138
MLS: #6056821
Broker: Keller Williams Integrity First
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1401 E Bellerive Drive Chandler 85249, Springfield Block Seven

$249,900
Bedrooms: 2
Baths: 2
Sqft: 1,072
MLS: #6057397
Broker: eXp Realty
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9951 E Dolphin Circle Mesa 85208, Wynstone Park

$243,000
Bedrooms: 3
Baths: 2
Sqft: 1,055
MLS: #6040247
Broker: Delex Realty
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938 E Glade Avenue Mesa 85204, Sherwood Manor

$239,900
Bedrooms: 2
Baths: 1.5
Sqft: 1,348
MLS: #6054379
Broker: 1st Dream Realty
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9709 E Butte Street Mesa 85207, University Manor

$240,000
Bedrooms: 3
Baths: 2
Sqft: 1,300
MLS: #6054392
Broker: Realty ONE Group
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5722 E Colby Street Mesa 85205, Velda Rose Estates 2

$249,999
Bedrooms: 2
Baths: 2
Sqft: 2,023
MLS: #6047270
Broker: Agave Homes & Investments
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937 W Macdonald Street Mesa 85210, Stewarts South Mesa Add Unit 2

$225,000
Bedrooms: 3
Baths: 1
Sqft: 1,130
MLS: #6058281
Broker: Novus Realty Agency
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2219 E Inverness Avenue Mesa 85204, Mesa Tierra NO 3

$249,800
Bedrooms: 3
Baths: 2
Sqft: 1,067
MLS: #6056545
Broker: Prime Equity Real Estate
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262 S 92nd Place Mesa 85208, Mary Francis Estates Replat

$164,900
Bedrooms: 3
Baths: 2
Sqft: 1,152
MLS: #6058228
Broker: Ensign Properties Corp
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1720 E Jarvis Avenue Mesa 85204, Mesa Linda

$250,000
Bedrooms: 3
Baths: 2
Sqft: 1,640
MLS: #6056389
Broker: Elite Results Realty
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5249 W Jupiter Way S Chandler 85226, Twelve Oaks 3

$249,500
Bedrooms: 2
Baths: 2
Sqft: 912
MLS: #6058169
Broker: North & Co
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1810 E 2nd Avenue Mesa 85204, Secluded Village

$234,900
Bedrooms: 3
Baths: 2
Sqft: 1,224
MLS: #6056630
Broker: Berkshire Hathaway HomeServices Arizona Properties
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1056 W Frito Avenue Mesa 85210, Country Village 1

$227,500
Bedrooms: 3
Baths: 2
Sqft: 1,669
MLS: #5995192
Broker: Momentum Brokers LLC
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5410 E Butte Street Mesa 85205, Dreamland Villa 3 Lots 233-262

$219,000
Bedrooms: 2
Baths: 1
Sqft: 1,144
MLS: #6043760
Broker: Presidential Realty, LLC
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1804 W Kiowa Circle Mesa 85202, Dobson Pines Lot 1-34

$245,000
Bedrooms: 2
Baths: 2
Sqft: 1,215
MLS: #6057867
Broker: Realty Executives
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460 E San Tan Street Chandler 85225, San Tan Vista 3

$228,900
Bedrooms: 3
Baths: 1.75
Sqft: 988
MLS: #6057924
Broker: eXp Realty
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11530 E Covina Street Mesa 85207, Meridian Hills Unit 1

$245,000
Bedrooms: 3
Baths: 2
Sqft: 1,204
MLS: #6057919
Broker: MovingAZ Realty, L.L.C.
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4514 E Catalina Avenue Mesa 85206, Sunland Village

$249,900
Bedrooms: 2
Baths: 2
Sqft: 1,748
MLS: #6008220
Broker: Visionary Properties
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825 S 77th Way Mesa 85208, Fountain OF The Sun Parcel 7-B UT 1415-1579 A-H

$249,900
Bedrooms: 2
Baths: 2
Sqft: 1,637
MLS: #6054039
Broker: Keller Williams Legacy One
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5446 E Baltimore Street Mesa 85205, Dreamland Villa 3 Lots 233-262

$221,500
Bedrooms: 3
Baths: 2
Sqft: 1,435
MLS: #6054639
Broker: HomeSmart
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6313 E Evergreen Street Mesa 85205, Dreamland Villa 15

$200,000
Bedrooms: 2
Baths: 2
Sqft: 1,118
MLS: #6018061
Broker: Opendoor Brokerage, LLC
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761 Leisure World -- Mesa 85206, Leisure World Golden Hills Plat 9 Amd

$184,900
Bedrooms: 2
Baths: 1
Sqft: 952
MLS: #5999901
Broker: RE/MAX Classic
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1322 Leisure World -- Mesa 85206, Leisure World Plat 12 Lot 1100-1404 & TR A-T

$248,650
Bedrooms: 3
Baths: 1.75
Sqft: 1,723
MLS: #6053175
Broker: RE/MAX Classic
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6666 E El Paso Street Mesa 85205, Dreamland Villa 16

$250,000
Bedrooms: 3
Baths: 2
Sqft: 1,602
MLS: #6057063
Broker: My Home Group Real Estate
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5428 E Cicero Street Mesa 85205, Dreamland Villa 5

$199,000
Bedrooms: 2
Baths: 1
Sqft: 884
MLS: #6045602
Broker: The Real Estate Brokers
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37 S 82nd Way Mesa 85208, Desert Sage TR 4 Blks 29 Lots 19-36

$249,000
Bedrooms: 4
Baths: 2
Sqft: 1,401
MLS: #6057271
Broker: Ashby Realty Group, LLC
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5662 E Decatur Street Mesa 85205, Dreamland Villa

$189,000
Bedrooms: 2
Baths: 1
Sqft: 956
MLS: #6057146
Broker: DPR Realty LLC
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5923 E Casper Road Mesa 85205, Velda Rose Estates 4

$215,000
Bedrooms: 2
Baths: 2
Sqft: 1,297
MLS: #6056903
Broker: Maplewood Homes
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1915 S 39th Street 116 Mesa 85206, Vista Villages

$250,000
Bedrooms: 3
Baths: 1.75
Sqft: 1,292
MLS: #6033636
Broker: Keller Williams Integrity First
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8019 E Frito Drive Mesa 85208, Fountain OF The Sun Parcel NO 4

$250,000
Bedrooms: 2
Baths: 2
Sqft: 1,294
MLS: #6056349
Broker: Infinity & Associates Real Estate
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9714 E Boston Street Mesa 85207, Lost Dutchman Villas

$215,000
Bedrooms: 2
Baths: 2
Sqft: 917
MLS: #6054421
Broker: eXp Realty
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729 N Los Feliz Drive Chandler 85226, Copperfield Estates

$249,900
Bedrooms: 2
Baths: 2
Sqft: 1,381
MLS: #6056267
Broker: My Home Group Real Estate
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9118 E Crescent Avenue Mesa 85208, Apache Trails

$219,900
Bedrooms: 3
Baths: 1
Sqft: 1,100
MLS: #6055488
Broker: Realty Executives
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220 N Horne -- Mesa 85203, Easton Place

$215,900
Bedrooms: 3
Baths: 1
Sqft: 1,174
MLS: #6056185
Broker: My Home Group Real Estate
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2253 E Flossmoor Circle Mesa 85204, Summer Place Phase 2 Amd Lot 93-309

$235,000
Bedrooms: 2
Baths: 2
Sqft: 1,117
MLS: #6056127
Broker: CTR Realty
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2462 E Hilton Avenue Mesa 85204, Knoell Mesa Unit 2

$250,000
Bedrooms: 3
Baths: 2
Sqft: 1,120
MLS: #6053852
Broker: TCB Realty
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427 S Horne -- Mesa 85204, Horne Acres Amd

$235,500
Bedrooms: 2
Baths: 1
Sqft: 1,251
MLS: #6050665
Broker: Stunning Homes Realty
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2726 E Harmony Avenue Mesa 85204, Old West Village 2 Lot 33-91

$244,900
Bedrooms: 3
Baths: 2
Sqft: 1,085
MLS: #6054511
Broker: West USA Realty
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10034 E Isleta Avenue Mesa 85209, Crismon Creek Village

$235,000
Bedrooms: 2
Baths: 2.5
Sqft: 1,345
MLS: #6052975
Broker: My Home Group Real Estate
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1874 Leisure World -- Mesa 85206, Leisure World Plat 17 Amd

$239,900
Bedrooms: 2
Baths: 1.75
Sqft: 1,672
MLS: #6044501
Broker: Canam Realty Group
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57 N Hunt Drive E Mesa 85203, Randall Hts

$199,900
Bedrooms: 3
Baths: 1
Sqft: 918
MLS: #6037273
Broker: My Home Group Real Estate
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1022 S Daley Street Mesa 85204, Mcafee Place Unit NO 1

$250,000
Bedrooms: 3
Baths: 2
Sqft: 1,298
MLS: #6049976
Broker: HomeSmart
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650 W 2nd Place Mesa 85201, Hosick Place

$220,000
Bedrooms: 2
Baths: 1
Sqft: 864
MLS: #6050531
Broker: West USA Realty
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1055 N Recker Road 1239 Mesa 85205, Brookfield West 1 Amd

$215,000
Bedrooms: 3
Baths: 2
Sqft: 1,160
MLS: #6053966
Broker: Venture REI, LLC
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2135 E Rosarita Drive Tempe 85281, Torre Molinos--Las Brisas

$192,500
Bedrooms: 3
Baths: 2.5
Sqft: 1,712
MLS: #6053518
Broker: Berkshire Hathaway HomeServices Arizona Properties
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ARMLS Listing Data last updated 3/29/2020 4:07 PM MST.

Kristin LaVanway
480-282-7464
kristin@hereinphoenix.com