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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1082 W Orchid Lane, Chandler 85224, Celebration BY Shea Homes Lot 1-133 TR A-G

  • $229,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,386
  • Lot size: 5,580
  • Year built: 1993
  • MLS #: 5806776
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2524 S El Paradiso --, Mesa 85202, Lake Park Development Unit 1 2ND Amd

  • $235,000
  • Bedrooms: 3, Baths: 3
  • Home size: 1,897
  • Lot size: 923
  • Year built: 1984
  • MLS #: 5803801
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921 S Val Vista Drive, Mesa 85204, Stonebridge Gardens Lot 1-183 TR A-H Pvt DR

  • $224,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,308
  • Lot size: 4,566
  • Year built: 1986
  • MLS #: 5807423
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1065 S Spur --, Mesa 85204, Mcafee Place Unit NO 1

  • $247,500
  • Bedrooms: 4, Baths: 2
  • Home size: 1,602
  • Lot size: 7,018
  • Year built: 1974
  • MLS #: 5795663
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4048 E Caballero Street, Mesa 85205, Greenfield Park Unit 2 Lot 236-400 TR A

  • $239,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,718
  • Lot size: 4,565
  • Year built: 1986
  • MLS #: 5794719
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1418 N Brittany Lane, Gilbert 85233, Gateway Court

  • $239,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,708
  • Lot size: 4,212
  • Year built: 1989
  • MLS #: 5807386
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1901 E 8th Street, Mesa 85203, Coury Estates Unit 2 Lot 39-70

  • $244,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,416
  • Lot size: 8,607
  • Year built: 1976
  • MLS #: 5776041
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2141 N 29th Place, Mesa 85213, Carina

  • $230,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,353
  • Lot size: 2,968
  • Year built: 1998
  • MLS #: 5804424
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2631 E Camino Street, Mesa 85213, Lindsay Park South Lot 1-72 TR A-B

  • $230,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,899
  • Lot size: 7,342
  • Year built: 1982
  • MLS #: 5803079
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2023 N 30th Street, Mesa 85213, Carina

  • $229,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,409
  • Lot size: 2,985
  • Year built: 1999
  • MLS #: 5802469
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2520 E Fairbrook Street, Mesa 85213, Brownmore Estates

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,607
  • Lot size: 10,037
  • Year built: 1972
  • MLS #: 5799961
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500 N Gila Springs Boulevard, Chandler 85226, Tesuque AT Gila Springs Amd

  • $190,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,257
  • Lot size: 1,200
  • Year built: 1997
  • MLS #: 5807356
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3719 E Inverness Avenue, Mesa 85206, Quail Vista Village

  • $239,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,743
  • Lot size: 3,150
  • Year built: 1997
  • MLS #: 5789422
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5490 E Boise Street, Mesa 85205, Dreamland Villa 2 Lots 50-58, TR B

  • $199,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,228
  • Lot size: 7,881
  • Year built: 1960
  • MLS #: 5803873
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102 S 110th Street, Mesa 85208, Signal Butte Manor 2

  • $239,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 2,179
  • Lot size: 4,400
  • Year built: 2001
  • MLS #: 5798788
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453 N Larkspur Street, Gilbert 85234, Village 2 Lot 90-225 & TR A

  • $216,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,406
  • Lot size: 7,031
  • Year built: 1979
  • MLS #: 5805764
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463 E Franklin Avenue, Mesa 85204, Citrus Grove Manor

  • $189,900
  • Bedrooms: 3, Baths: 1.5
  • Home size: 1,064
  • Lot size: 6,115
  • Year built: 1962
  • MLS #: 5794968
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1312 E 7th Avenue, Mesa 85204, Poinsetta Villa

  • $249,500
  • Bedrooms: 3, Baths: 2.25
  • Home size: 1,466
  • Lot size: 7,468
  • Year built: 1959
  • MLS #: 5799282
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119 S Matlock Street, Mesa 85204, Golden Grove

  • $155,000
  • Bedrooms: 3, Baths: 1
  • Home size: 1,073
  • Lot size: 9,453
  • Year built: 1950
  • MLS #: 5807252
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2103 E Birchwood Avenue, Mesa 85204, Casa DE Sol

  • $199,980
  • Bedrooms: 2, Baths: 2
  • Home size: 1,350
  • Lot size: 6,768
  • Year built: 1962
  • MLS #: 5796179
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1878 E Carla Vista Drive, Chandler 85225, Parcel B AT Tradition East

  • $249,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,310
  • Lot size: 5,759
  • Year built: 1996
  • MLS #: 5800878
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5006 E Fairfield Street, Mesa 85205, Northpointe 4 Lot 101-237 Tract A

  • $232,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,200
  • Lot size: 8,967
  • Year built: 1986
  • MLS #: 5806357
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11036 E Elton Avenue, Mesa 85208, Minnesota Manor Unit 2 Lot 37-54

  • $195,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,245
  • Lot size: 10,380
  • Year built: 1986
  • MLS #: 5805349
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1810 N Comanche Drive, Chandler 85224, Brooks Crossing 2 Lot 55-151

  • $239,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,420
  • Lot size: 7,941
  • Year built: 1981
  • MLS #: 5805739
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663 N Fort Street, Mesa 85207, Desert Air Grande

  • $188,000
  • Bedrooms: 3, Baths: 1
  • Home size: 1,404
  • Lot size: 9,108
  • Year built: 1979
  • MLS #: 5805495
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230 S Laveen Drive, Chandler 85226, Hearthstone Unit 1 LT 1-198 TR A-D

  • $235,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,101
  • Lot size: 4,979
  • Year built: 1985
  • MLS #: 5803106
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663 N Coral Key Avenue, Gilbert 85233, Summer Meadows

  • $239,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,358
  • Lot size: 7,338
  • Year built: 1997
  • MLS #: 5804409
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5257 E Duncan Street, Mesa 85205, Dreamland Villa 8

  • $138,500
  • Bedrooms: 2, Baths: 1
  • Home size: 924
  • Lot size: 7,459
  • Year built: 1967
  • MLS #: 5807143
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958 S Wildrose Circle, Mesa 85208, Parkwood Ranch Parcel 4

  • $237,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,518
  • Lot size: 5,471
  • Year built: 1998
  • MLS #: 5801401
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1352 E Waterview Place, Chandler 85249, Springfield Block Four

  • $210,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,072
  • Lot size: 4,269
  • Year built: 1999
  • MLS #: 5790468
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250 W Juniper Avenue, Gilbert 85233, Desert Winds

  • $245,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,730
  • Lot size: 4,740
  • Year built: 1996
  • MLS #: 5681852
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250 W Juniper Avenue, Gilbert 85233, Desert Winds

  • $245,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,730
  • Lot size: 5,187
  • Year built: 1995
  • MLS #: 5681875
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942 E Cantebria Drive, Gilbert 85296, Lindsay And Warner

  • $222,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,214
  • Lot size: 3,097
  • Year built: 2004
  • MLS #: 5807030
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640 E 1st Place, Mesa 85203, Mesa Villa Sub Plat 1

  • $215,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,238
  • Lot size: 8,233
  • Year built: 1944
  • MLS #: 5801033
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802 S Saranac Avenue, Mesa 85208, Apache Country Club Ests 1

  • $249,700
  • Bedrooms: 3, Baths: 3
  • Home size: 1,798
  • Lot size: 11,745
  • Year built: 1962
  • MLS #: 5789664
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833 S Chatsworth --, Mesa 85208, Parkwood Ranch Parcel 10

  • $245,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,518
  • Lot size: 5,500
  • Year built: 1999
  • MLS #: 5757798
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148 S 85th Street, Mesa 85208, Knolls Estates Lots 14-47, 62-78

  • $180,000
  • Bedrooms: 3, Baths: 1
  • Home size: 1,070
  • Lot size: 8,664
  • Year built: 1963
  • MLS #: 5806992
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10944 E Delta Avenue, Mesa 85208, Parkwood East

  • $229,999
  • Bedrooms: 3, Baths: 2
  • Home size: 1,452
  • Lot size: 5,500
  • Year built: 1999
  • MLS #: 5805959
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539 S 91st Place, Mesa 85208, Apache Trails

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,320
  • Lot size: 8,638
  • Year built: 1960
  • MLS #: 5804765
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9245 E Keats Avenue, Mesa 85209, Suncrest AT Augusta Ranch

  • $250,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,704
  • Lot size: 3,760
  • Year built: 2000
  • MLS #: 5791878
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1811 S 39th Street, Mesa 85206, Vista Villages 2 Lot 1-101 TR A-F

  • $229,900
  • Bedrooms: 4, Baths: 2
  • Home size: 1,493
  • Lot size: 4,680
  • Year built: 1988
  • MLS #: 5788466
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120 S Spencer --, Mesa 85204, Woodland Terrace

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,308
  • Lot size: 8,303
  • Year built: 1955
  • MLS #: 5785749
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1351 N Los Altos Drive, Chandler 85224, Silvergate 3 Unit 1 Lot 1-222 TR A-L

  • $249,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,328
  • Lot size: 4,822
  • Year built: 1983
  • MLS #: 5806868
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11419 E Elton Avenue, Mesa 85208, Desert Village

  • $219,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,312
  • Lot size: 9,117
  • Year built: 1972
  • MLS #: 5806837
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1123 S Drew Street, Mesa 85210, Beall Park 2

  • $210,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,370
  • Lot size: 8,149
  • Year built: 1969
  • MLS #: 5796463
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137 N Miller Street, Mesa 85203, Stewarts East Mesa Add

  • $200,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,324
  • Lot size: 7,514
  • Year built: 1965
  • MLS #: 5787140
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452 E Harrison Street, Chandler 85225, Summerset

  • $214,900
  • Bedrooms: 2, Baths: 1
  • Home size: 1,000
  • Lot size: 6,456
  • Year built: 1996
  • MLS #: 5796309
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8505 E Meseto Avenue, Mesa 85209, Lesueur Estates Unit 2

  • $230,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,508
  • Lot size: 6,491
  • Year built: 2000
  • MLS #: 5804307
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131 E Jacaranda Street, Mesa 85201, Old West Valley Lot 1-122

  • $209,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,196
  • Lot size: 6,978
  • Year built: 1979
  • MLS #: 5797606
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2324 W Osage Avenue, Mesa 85202, Knoell East

  • $226,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,106
  • Lot size: 6,612
  • Year built: 1978
  • MLS #: 5806793
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ARMLS Listing Data last updated 8/16/2018 10:37 AM MST.

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