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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1018 S Roanoke --, Mesa 85206, Sunland Village 4 Lot 860-1110 TR K-L

  • $229,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,519
  • Lot size: 6,625
  • Year built: 1979
  • MLS #: 5994282
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1394 E Runaway Bay Drive, Chandler 85249, Springfield

  • $238,000
  • Bedrooms: 2, Baths: 1.75
  • Home size: 958
  • Lot size: 4,500
  • Year built: 1998
  • MLS #: 5994395
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9716 E Baltimore Circle, Mesa 85207, University Manor

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,300
  • Lot size: 4,400
  • Year built: 2002
  • MLS #: 5984024
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6933 E Exmoor Drive, Mesa 85208, Apache Country Club Ests 1

  • $240,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,480
  • Lot size: 7,205
  • Year built: 1964
  • MLS #: 5993367
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7620 E Butte Street, Mesa 85207, Amberly Lane

  • $239,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,549
  • Lot size: 3,613
  • Year built: 2003
  • MLS #: 5993336
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7517 E Hackamore Circle, Mesa 85207, Moondance

  • $225,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,178
  • Lot size: 9,736
  • Year built: 1987
  • MLS #: 5994230
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2489 Leisure World --, Mesa 85206, Leisure World-Verde Del Sur Lot 2458-2511 TR A-D

  • $237,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,539
  • Lot size: 7,242
  • Year built: 1989
  • MLS #: 5989670
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2519 E Butte Street, Mesa 85213, Mesa Villas Replat

  • $235,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,364
  • Lot size: 7,844
  • Year built: 1976
  • MLS #: 5991103
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2422 E Ivy Street, Mesa 85213, Russell Manor

  • $240,000
  • Bedrooms: 3, Baths: 2
  • Home size: 2,315
  • Lot size: 10,610
  • Year built: 1975
  • MLS #: 5994132
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1535 N Horne --, Mesa 85203, Horn Avenue LT 1-127 TR A-C

  • $245,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,356
  • Lot size: 3,502
  • Year built: 1985
  • MLS #: 5993668
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832 W Monterey Street, Chandler 85225, Sunnycrest 1

  • $247,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,120
  • Lot size: 7,976
  • Year built: 1969
  • MLS #: 5988454
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10741 E Portobello Avenue, Mesa 85212, Santa Rita Ranch Parcel 6

  • $249,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,635
  • Lot size: 5,500
  • Year built: 1999
  • MLS #: 5969162
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10707 E Portobello Avenue, Mesa 85212, Santa Rita Ranch Parcel 6

  • $249,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,278
  • Lot size: 5,500
  • Year built: 1999
  • MLS #: 5993308
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6036 E Billings Street, Mesa 85205, Dreamland Villa 14

  • $245,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,318
  • Lot size: 7,283
  • Year built: 1972
  • MLS #: 5987116
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248 N 65th Place, Mesa 85205, Velda Rose Estates East 5 Lot 381-442 & TR A

  • $250,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,601
  • Lot size: 7,517
  • Year built: 1980
  • MLS #: 5989509
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836 S Pasadena Street, Mesa 85210, Esquire Terrace

  • $244,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,514
  • Lot size: 6,787
  • Year built: 1959
  • MLS #: 5974096
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2022 E Marilyn Avenue, Mesa 85204, Fuller Ranch Subdivision Lot 1-410 & TR A-H

  • $249,900
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,272
  • Lot size: 9,304
  • Year built: 1982
  • MLS #: 5992747
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10142 E Carmel Circle, Mesa 85208, Sunrise AT Parkwood Ranch

  • $250,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,310
  • Lot size: 4,130
  • Year built: 2000
  • MLS #: 5992310
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7428 E Carol Circle, Mesa 85208, Linda Vista Unit 1

  • $249,990
  • Bedrooms: 3, Baths: 2
  • Home size: 1,890
  • Lot size: 6,993
  • Year built: 1973
  • MLS #: 5973819
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5856 E Decatur Street, Mesa 85205, Dreamland Villa

  • $218,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,506
  • Lot size: 7,520
  • Year built: 1969
  • MLS #: 5989169
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235 N 22nd Place, Mesa 85213, Stratford Place

  • $239,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,242
  • Lot size: 1,907
  • Year built: 1988
  • MLS #: 5993619
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246 E Juniper Street, Mesa 85201, Mesa Meadows

  • $250,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,548
  • Lot size: 6,055
  • Year built: 1979
  • MLS #: 5993493
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1440 E Bellerive Drive, Chandler 85249, Springfield Block Seven

  • $240,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,072
  • Lot size: 5,000
  • Year built: 1999
  • MLS #: 5993541
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23 E 2nd Avenue, Mesa 85210, Mesa

  • $249,900
  • Bedrooms: 2, Baths: 1
  • Home size: 978
  • Lot size: 6,982
  • Year built: 1935
  • MLS #: 5992664
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1262 S Jay Circle, Mesa 85204, Casa Mesa 3A

  • $219,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,465
  • Lot size: 5,921
  • Year built: 1970
  • MLS #: 5980637
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5826 E Grove Avenue, Mesa 85206, Summerlin Village

  • $245,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,661
  • Lot size: 2,485
  • Year built: 2006
  • MLS #: 5992110
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10325 E Wood Avenue, Mesa 85208, Desert Village 2 LT 63-76, 89-102, 115-128

  • $199,999
  • Bedrooms: 3, Baths: 2
  • Home size: 1,040
  • Lot size: 17,350
  • Year built: 1974
  • MLS #: 5985346
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5440 E Butte Street, Mesa 85205, Dreamland Villa 3 Lots 233-262

  • $225,000
  • Bedrooms: 2, Baths: 1.5
  • Home size: 1,144
  • Lot size: 8,618
  • Year built: 1960
  • MLS #: 5991381
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639 S Allen --, Mesa 85204, Gable Village

  • $235,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,268
  • Lot size: 6,325
  • Year built: 1960
  • MLS #: 5993267
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1436 S Lazona Drive, Mesa 85204, Stapley Gardens Lot 1-162 TR A

  • $199,900
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,118
  • Lot size: 4,452
  • Year built: 1980
  • MLS #: 5991263
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631 S 75th Place, Mesa 85208, Linda Vista Subdivision Unit 2

  • $199,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,040
  • Lot size: 6,582
  • Year built: 1974
  • MLS #: 5992947
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9096 E Wier Avenue, Mesa 85208, Apache Trails

  • $215,900
  • Bedrooms: 3, Baths: 1
  • Home size: 816
  • Lot size: 7,989
  • Year built: 1959
  • MLS #: 5985367
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638 S Portland --, Mesa 85206, Sunland Village

  • $220,000
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,333
  • Lot size: 6,460
  • Year built: 1976
  • MLS #: 5987993
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4634 E Edgewood Avenue, Mesa 85206, Sunland Village 7 Lot 1-182, 187-497 & TR A-L

  • $244,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,330
  • Lot size: 6,198
  • Year built: 1980
  • MLS #: 5991105
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564 N Drew Street, Mesa 85201, Bowen Tract

  • $239,990
  • Bedrooms: 3, Baths: 2
  • Home size: 1,400
  • Lot size: 6,660
  • Year built: 1955
  • MLS #: 5992734
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4114 E Alder Avenue, Mesa 85206, Chelsea Point Lot 1-226 TR A

  • $250,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,288
  • Lot size: 6,775
  • Year built: 1994
  • MLS #: 5992709
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258 N 62nd Street, Mesa 85205, Velda Rose Estates East 2

  • $218,990
  • Bedrooms: 2, Baths: 2
  • Home size: 1,590
  • Lot size: 7,501
  • Year built: 1972
  • MLS #: 5981562
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10133 E Billings Street, Mesa 85207, Mesquite Trails

  • $239,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,612
  • Lot size: 8,507
  • Year built: 1978
  • MLS #: 5987298
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7837 E Flossmoor Avenue, Mesa 85208, Fountain OF The Sun Parcel 6

  • $215,000
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,250
  • Lot size: 6,682
  • Year built: 1984
  • MLS #: 5979863
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2444 E Billings Street, Mesa 85213, Mesa Villas Replat

  • $249,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,704
  • Lot size: 7,912
  • Year built: 1975
  • MLS #: 5956522
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452 S Rochester --, Mesa 85206, Sunland Village 2

  • $247,500
  • Bedrooms: 2, Baths: 2
  • Home size: 1,589
  • Lot size: 6,384
  • Year built: 1976
  • MLS #: 5992489
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415 N Central Drive, Chandler 85224, Camelot Estates

  • $249,999
  • Bedrooms: 3, Baths: 2
  • Home size: 1,142
  • Lot size: 6,172
  • Year built: 1971
  • MLS #: 5990459
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354 S Dakota Street, Chandler 85225, N/A

  • $235,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,200
  • Lot size: 12,110
  • Year built: 1966
  • MLS #: 5990856
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2853 E Juanita Avenue, Mesa 85204, Ranch Unit 4 Lot 423-583 & TR A

  • $234,000
  • Bedrooms: 2, Baths: 1
  • Home size: 1,061
  • Lot size: 10,379
  • Year built: 1980
  • MLS #: 5981538
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8117 E Edgewood Circle, Mesa 85208, Fountain OF The Sun

  • $232,500
  • Bedrooms: 2, Baths: 2
  • Home size: 1,308
  • Lot size: 7,893
  • Year built: 1977
  • MLS #: 5972836
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11419 E Flower Avenue, Mesa 85208, Silverwood Amd

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,371
  • Lot size: 5,337
  • Year built: 2002
  • MLS #: 5979552
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6730 E Preston Street, Mesa 85215, Villas at Red Mountain

  • $239,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,001
  • Lot size: 4,190
  • Year built: 1998
  • MLS #: 5989437
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1061 W 5th Street, Mesa 85201, Emerson Manor Lots 68-119

  • $240,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,276
  • Lot size: 7,375
  • Year built: 1954
  • MLS #: 5983525
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9010 E Marguerite Avenue, Mesa 85208, Apache Trails

  • $248,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,538
  • Lot size: 8,024
  • Year built: 1972
  • MLS #: 5956791
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1019 W Sunward Drive, Gilbert 85233, Costain AT The Islands

  • $250,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,262
  • Lot size: 4,204
  • Year built: 1986
  • MLS #: 5970818
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ARMLS Listing Data last updated 10/20/2019 4:37 PM MST.

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