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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2127 W Dixon Street, Mesa 85201, LA Mesa Village Lot 1-65 & TR A-C

  • $219,357
  • Bedrooms: 3, Baths: 2
  • Home size: 1,296
  • Lot size: 6,447
  • Year built: 1980
  • MLS #: 5900369
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623 S Olive Street, Mesa 85204, Lynwood Tract Lots 25-32

  • $199,000
  • Bedrooms: 2, Baths: 1
  • Home size: 1,484
  • Lot size: 7,449
  • Year built: 1985
  • MLS #: 5900356
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11554 E Covina Street, Mesa 85207, Meridian Hills Unit 1

  • $240,000
  • Bedrooms: 4, Baths: 1.75
  • Home size: 1,436
  • Lot size: 5,253
  • Year built: 1998
  • MLS #: 5899717
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921 S Val Vista Drive, Mesa 85204, Stonebridge Gardens Lot 1-183 TR A-H Pvt DR Lot 120

  • $240,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,652
  • Lot size: 1,652
  • Year built: 1987
  • MLS #: 5899980
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9823 E Onza Avenue, Mesa 85212, Mesquite Canyon Unit 3 Amd

  • $249,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,401
  • Lot size: 5,741
  • Year built: 2000
  • MLS #: 5876953
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383 E Harrison Street, Chandler 85225, Summerset

  • $218,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,120
  • Lot size: 6,146
  • Year built: 1996
  • MLS #: 5900006
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9506 E Fairbrook Street, Mesa 85207, Oasis Verde

  • $230,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,562
  • Lot size: 7,200
  • Year built: 1985
  • MLS #: 5867499
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2729 W Brooks Street, Chandler 85224, Cove AT Tiburon

  • $215,000
  • Bedrooms: 3, Baths: 2
  • Home size: 982
  • Lot size: 4,922
  • Year built: 1983
  • MLS #: 5899341
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2419 E Dolphin Avenue, Mesa 85204, Summer Place

  • $250,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,289
  • Lot size: 7,815
  • Year built: 1983
  • MLS #: 5874978
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2129 E Birchwood Avenue, Mesa 85204, Casa DE Sol

  • $235,000
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,485
  • Lot size: 5,961
  • Year built: 1961
  • MLS #: 5900154
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125 W Morelos Street, Chandler 85225, Chieftain Village

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,305
  • Lot size: 6,787
  • Year built: 1960
  • MLS #: 5898105
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111 W Galveston Street, Chandler 85225, Hoy Homes

  • $218,500
  • Bedrooms: 2, Baths: 1
  • Home size: 936
  • Lot size: 8,285
  • Year built: 1949
  • MLS #: 5883649
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104 E Franklin Avenue, Mesa 85210, Western Homesites

  • $200,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,348
  • Lot size: 7,318
  • Year built: 1955
  • MLS #: 5896496
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5412 E Boise Street, Mesa 85205, Dreamland Villa 2 Lots 50-58, TR B

  • $179,900
  • Bedrooms: 2, Baths: 1.5
  • Home size: 912
  • Lot size: 8,087
  • Year built: 1959
  • MLS #: 5890569
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1738 S Chatsworth --, Mesa 85209, Crismon Creek Village

  • $225,000
  • Bedrooms: 2, Baths: 2.5
  • Home size: 1,345
  • Lot size: 2,040
  • Year built: 2005
  • MLS #: 5897913
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1756 E Divot Drive, Tempe 85283, Continental Tempe Unit 2 TR A,B

  • $235,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,068
  • Lot size: 13,456
  • Year built: 1984
  • MLS #: 5899649
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1018 S Clancy Circle, Mesa 85208, Silverwood

  • $248,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,558
  • Lot size: 5,515
  • Year built: 2002
  • MLS #: 5899149
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735 N Cholla --, Mesa 85201, Village Park 4 Unit 2 Lot 97-170

  • $245,000
  • Bedrooms: 4, Baths: 1.75
  • Home size: 1,534
  • Lot size: 7,732
  • Year built: 1978
  • MLS #: 5871407
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2328 W Peralta Avenue, Mesa 85202, Knoell East

  • $209,000
  • Bedrooms: 2, Baths: 1
  • Home size: 915
  • Lot size: 7,453
  • Year built: 1976
  • MLS #: 5898224
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4507 E Edgewood Avenue, Mesa 85206, Sunland Village

  • $232,500
  • Bedrooms: 2, Baths: 2
  • Home size: 1,660
  • Lot size: 6,744
  • Year built: 1984
  • MLS #: 5869305
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6336 E Decatur Street, Mesa 85205, Dreamland Villa 12

  • $184,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,480
  • Lot size: 8,404
  • Year built: 1970
  • MLS #: 5896328
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6752 S Pebble Beach Drive, Chandler 85249, Sunbird

  • $240,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,283
  • Lot size: 5,528
  • Year built: 1994
  • MLS #: 5894682
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812 E Huber Street, Mesa 85203, Hohokam Village Unit 1-C Lot 129-238

  • $249,000
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,417
  • Lot size: 8,830
  • Year built: 1981
  • MLS #: 5897693
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1650 N Trevor --, Mesa 85201, Colony on the Green

  • $230,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,604
  • Lot size: 7,418
  • Year built: 1970
  • MLS #: 5896932
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2322 E Birchwood Avenue, Mesa 85204, Casa Del Sol

  • $229,998
  • Bedrooms: 3, Baths: 2
  • Home size: 1,385
  • Lot size: 6,242
  • Year built: 1968
  • MLS #: 5898812
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1415 W 6th Drive, Mesa 85202, Alma Ests 4 Lots 241-274, 302-318

  • $195,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,595
  • Lot size: 6,277
  • Year built: 1960
  • MLS #: 5898564
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327 N 85th Place, Mesa 85207, Knolland Estates

  • $224,900
  • Bedrooms: 3, Baths: 3
  • Home size: 1,537
  • Lot size: 10,890
  • Year built: 1971
  • MLS #: 5887273
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5040 E Elena Avenue, Mesa 85206, Sunland Village

  • $215,000
  • Bedrooms: 2, Baths: 2.5
  • Home size: 1,546
  • Lot size: 6,729
  • Year built: 1978
  • MLS #: 5899549
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5745 E Decatur Street, Mesa 85205, Dreamland Villa 9

  • $217,999
  • Bedrooms: 2, Baths: 2
  • Home size: 1,701
  • Lot size: 8,371
  • Year built: 1969
  • MLS #: 5877390
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10457 E Birchwood Avenue, Mesa 85208, Signal Butte Ranch Unit 1

  • $242,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,540
  • Lot size: 6,930
  • Year built: 1998
  • MLS #: 5899271
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1425 E Nielson Avenue, Mesa 85204, Mesa Homes Lots 15,16,27-36, 47-56, 67-73, 84-86

  • $199,900
  • Bedrooms: 3, Baths: 1
  • Home size: 1,002
  • Lot size: 8,917
  • Year built: 1953
  • MLS #: 5883820
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5726 E University Drive, Mesa 85205, Velda Rose Estates

  • $229,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,450
  • Lot size: 7,779
  • Year built: 1963
  • MLS #: 5852599
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6529 E El Paso Street, Mesa 85205, Dreamland Villa 16

  • $231,650
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,611
  • Lot size: 7,662
  • Year built: 1973
  • MLS #: 5849949
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1158 Leisure World --, Mesa 85206, Leisure World Plat 12 Lot 1100-1404 & TR A-T

  • $235,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,374
  • Lot size: 7,951
  • Year built: 1979
  • MLS #: 5869022
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1038 Leisure World --, Mesa 85206, Leisure World Plat 11 Lot 888-1097 & TR A-H

  • $209,500
  • Bedrooms: 2, Baths: 1.5
  • Home size: 1,294
  • Lot size: 7,474
  • Year built: 1978
  • MLS #: 5876896
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825 E Oakland Street, Chandler 85225, Kingston Manor

  • $234,950
  • Bedrooms: 3, Baths: 1
  • Home size: 1,422
  • Lot size: 5,888
  • Year built: 1972
  • MLS #: 5876952
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1915 S 39th Street, Mesa 85206, Vista Villages

  • $230,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,292
  • Lot size: 3,805
  • Year built: 1987
  • MLS #: 5853834
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1309 W Pueblo Avenue, Mesa 85202, Alma Ests 5 Lots 319-336, 372-407, 430-447

  • $218,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,692
  • Lot size: 6,207
  • Year built: 1966
  • MLS #: 5877646
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5042 E Edgewood Avenue, Mesa 85206, Sunland Village 3 Lot 555-859 & TR J

  • $239,900
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,704
  • Lot size: 6,813
  • Year built: 1979
  • MLS #: 5898932
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8355 E Edgewood Avenue, Mesa 85208, Fountain OF The Sun Parcel NO 4

  • $247,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,960
  • Lot size: 9,644
  • Year built: 1978
  • MLS #: 5873500
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1066 Leisure World --, Mesa 85206, Leisure World Plat 11 Lot 888-1097 & TR A-H

  • $233,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,691
  • Lot size: 8,637
  • Year built: 1979
  • MLS #: 5889502
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10218 E Bramble Avenue, Mesa 85208, Desert Village 2 LT 63-76, 89-102, 115-128

  • $239,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,040
  • Lot size: 17,367
  • Year built: 1974
  • MLS #: 5895749
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4336 E Oakland Street, Gilbert 85295, Willows

  • $245,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,329
  • Lot size: 3,285
  • Year built: 2006
  • MLS #: 5862244
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1257 E Forge Avenue, Mesa 85204, Toni Estates 2

  • $249,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,440
  • Lot size: 6,957
  • Year built: 1978
  • MLS #: 5879385
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11238 E Quicksilver Avenue, Mesa 85212, Mountain Ranch

  • $239,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,509
  • Lot size: 5,750
  • Year built: 2001
  • MLS #: 5886997
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1940 E Winged Foot Drive, Chandler 85249, Sunbird Unit Nine

  • $175,000
  • Bedrooms: 2, Baths: 2
  • Home size: 986
  • Lot size: 3,006
  • Year built: 1994
  • MLS #: 5888644
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2120 S Bernard --, Mesa 85209, Suncrest AT Augusta Ranch

  • $233,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,383
  • Lot size: 4,163
  • Year built: 2000
  • MLS #: 5886583
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1564 S Owl Drive, Gilbert 85296, Gardens Parcel 2

  • $213,900
  • Bedrooms: 2, Baths: 1.5
  • Home size: 1,096
  • Lot size: 2,808
  • Year built: 2002
  • MLS #: 5891908
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814 S 78th Street, Mesa 85208, Fountain OF The Sun Parcel 7-B UT 1415-1579 A-H

  • $230,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,840
  • Lot size: 8,172
  • Year built: 1986
  • MLS #: 5846997
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1900 E Winged Foot Drive, Chandler 85249, Sunbird

  • $195,000
  • Bedrooms: 2, Baths: 2
  • Home size: 974
  • Lot size: 2,953
  • Year built: 1994
  • MLS #: 5885202
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ARMLS Listing Data last updated 3/22/2019 7:39 PM MST.

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