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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630 E Erie Street, Chandler 85225, Wilshire Park 2

  • $199,900
  • Bedrooms: 3, Baths: 1
  • Home size: 988
  • Lot size: 7,018
  • Year built: 1971
  • MLS #: 5703123
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3727 E Rolling Green Way, Chandler 85249, Springfield Lakes

  • $230,000
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,158
  • Lot size: 4,686
  • Year built: 2003
  • MLS #: 5712721
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906 N Wedgewood Drive, Mesa 85203, Wedgewood 1

  • $190,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,126
  • Lot size: 7,710
  • Year built: 1959
  • MLS #: 5694334
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1318 W Boxelder Court, Chandler 85224, Parkwood Estates UT 4 PH 2 LT 16-219 TR A-D F-V

  • $249,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,336
  • Lot size: 4,600
  • Year built: 1985
  • MLS #: 5699917
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11348 E Elena Avenue, Mesa 85208, Parkwood East 2

  • $219,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,544
  • Lot size: 5,810
  • Year built: 2000
  • MLS #: 5693389
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7648 E Caballero Street, Mesa 85207, Adobe Hills

  • $244,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,426
  • Lot size: 6,500
  • Year built: 2000
  • MLS #: 5704443
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5303 E Hopi Avenue, Mesa 85206, San Michelle

  • $240,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,521
  • Lot size: 4,675
  • Year built: 2001
  • MLS #: 5712222
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428 N Beverly --, Mesa 85201, Metes and bounds

  • $184,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,360
  • Lot size: 9,148
  • Year built: 1971
  • MLS #: 5712802
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3413 E Dennisport Avenue, Gilbert 85295, Chaparral Estates

  • $244,999
  • Bedrooms: 3, Baths: 2
  • Home size: 1,190
  • Lot size: 6,274
  • Year built: 2000
  • MLS #: 5710154
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8131 E Irwin Avenue, Mesa 85209, Casa Mia

  • $195,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,176
  • Lot size: 1,176
  • Year built: 1976
  • MLS #: 5704908
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2027 E Inverness Avenue, Mesa 85204, Mesa Tierra

  • $237,300
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,422
  • Lot size: 6,946
  • Year built: 1980
  • MLS #: 5690672
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2312 E Commonwealth Avenue, Chandler 85225, Colonia Coronita

  • $232,900
  • Bedrooms: 4, Baths: 2
  • Home size: 1,571
  • Lot size: 7,305
  • Year built: 1979
  • MLS #: 5676059
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5857 E Des Moines Street, Mesa 85205, Dreamland Villa 10

  • $149,900
  • Bedrooms: 2, Baths: 1.5
  • Home size: 924
  • Lot size: 7,503
  • Year built: 1969
  • MLS #: 5709999
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1522 W Plana Avenue, Mesa 85202, North Forty Unit Three Lot 151-227 & 271-273

  • $242,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,480
  • Lot size: 7,505
  • Year built: 1979
  • MLS #: 5683640
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1929 E 1st Avenue, Mesa 85204, Beverly Estates

  • $215,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,512
  • Lot size: 8,207
  • Year built: 1957
  • MLS #: 5711853
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1567 W Kesler Lane, Chandler 85224, Blakeman Ranch Unit 2

  • $245,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,321
  • Lot size: 5,754
  • Year built: 1997
  • MLS #: 5712716
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8032 E 4th Avenue, Mesa 85208, Desert Sage TR Blks 1, 2, 3, 4

  • $162,000
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,312
  • Lot size: 8,995
  • Year built: 1955
  • MLS #: 5710652
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548 S 37th Street, Mesa 85206, Lemontree

  • $244,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,399
  • Lot size: 9,585
  • Year built: 1986
  • MLS #: 5698612
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801 N 95th Street, Mesa 85207, Superstition Village

  • $242,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,828
  • Lot size: 8,786
  • Year built: 1974
  • MLS #: 5701805
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1789 E Oakland Street, Gilbert 85295, Gilbert Ranch Unit 2

  • $247,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,309
  • Lot size: 4,669
  • Year built: 1999
  • MLS #: 5703525
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935 E Redondo Drive, Gilbert 85296, Lindsay And Warner

  • $240,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,632
  • Lot size: 3,115
  • Year built: 2003
  • MLS #: 5699883
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642 S 72nd Street, Mesa 85208, Apache Country Club

  • $234,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,496
  • Lot size: 8,050
  • Year built: 1983
  • MLS #: 5711982
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658 S Pasadena --, Mesa 85210, EL May Villa Amd

  • $184,900
  • Bedrooms: 3, Baths: 1.5
  • Home size: 1,466
  • Lot size: 8,372
  • Year built: 1953
  • MLS #: 5671441
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1721 S Chatsworth --, Mesa 85209, Crismon Creek Village

  • $219,900
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,642
  • Lot size: 2,696
  • Year built: 2009
  • MLS #: 5712659
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7934 E Golf Avenue, Mesa 85209, Desert Sands Golf & Country Club Unit 8

  • $199,999
  • Bedrooms: 4, Baths: 2
  • Home size: 1,370
  • Lot size: 7,122
  • Year built: 1982
  • MLS #: 5712793
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1621 W Highland Street, Chandler 85224, Knoell East Unit 7 Lot 201-457 TR A-B

  • $235,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,211
  • Lot size: 7,554
  • Year built: 1986
  • MLS #: 5712369
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1925 E Marquette Drive, Gilbert 85234, Val Vista Lakes

  • $249,900
  • Bedrooms: 4, Baths: 2
  • Home size: 1,455
  • Lot size: 5,066
  • Year built: 1994
  • MLS #: 5712745
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6050 E Adobe Road, Mesa 85205, Dreamland Villa 15

  • $230,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,908
  • Lot size: 7,488
  • Year built: 1973
  • MLS #: 5699226
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2709 E Bart Street, Gilbert 85295, Lyons Gate Phase 1 And 2

  • $236,500
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,488
  • Lot size: 2,989
  • Year built: 2006
  • MLS #: 5709785
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6406 E Aspen Avenue, Mesa 85206, Desert Wells 2

  • $239,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,315
  • Lot size: 8,487
  • Year built: 1970
  • MLS #: 5708617
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620 W 2nd Street, Mesa 85201, Hosick Place

  • $169,000
  • Bedrooms: 2, Baths: 1
  • Home size: 849
  • Lot size: 8,769
  • Year built: 1948
  • MLS #: 5706124
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230 W San Pedro Avenue, Gilbert 85233, Oaktree Park Lot 1-115 TR A

  • $246,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,357
  • Lot size: 8,622
  • Year built: 1985
  • MLS #: 5681209
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7441 E Irwin Avenue, Mesa 85209, Desert Sands Golf & Country Club Unit 1

  • $189,900
  • Bedrooms: 3, Baths: 2
  • Home size: 1,702
  • Lot size: 6,403
  • Year built: 1971
  • MLS #: 5656692
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913 S 33rd Place, Mesa 85204, Countryside Estates Unit 2 Lot 101-262

  • $235,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,591
  • Lot size: 7,556
  • Year built: 1977
  • MLS #: 5711646
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1102 N Sailors Way, Gilbert 85234, Park Village Unit 3 Lot 1-89 TR A

  • $245,500
  • Bedrooms: 3, Baths: 2
  • Home size: 1,410
  • Lot size: 5,981
  • Year built: 1991
  • MLS #: 5702901
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5209 E Decatur Street, Mesa 85205, Dreamland Villa 8

  • $139,900
  • Bedrooms: 2, Baths: 1
  • Home size: 924
  • Lot size: 7,086
  • Year built: 1968
  • MLS #: 5656037
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344 S Laveen Drive, Chandler 85226, Hearthstone Unit 4 LT 431-555 TR A-H

  • $250,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,210
  • Lot size: 4,948
  • Year built: 1986
  • MLS #: 5710898
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2209 N Lema Drive, Mesa 85215, Apache Wells Mobile Park 4

  • $223,700
  • Bedrooms: 2, Baths: 1.75
  • Home size: 1,166
  • Lot size: 6,538
  • Year built: 1972
  • MLS #: 5711587
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2306 Leisure World --, Mesa 85206, Leisure World Plat 22 Lot 2271-2404 TR A-K

  • $209,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,434
  • Lot size: 9,240
  • Year built: 1986
  • MLS #: 5704679
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646 E Garnet Avenue, Mesa 85204, Sunset Mesa

  • $190,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,308
  • Lot size: 1,308
  • Year built: 1974
  • MLS #: 5704923
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416 W Linda Lane, Chandler 85225, Thunderbird Park Plat 6

  • $219,000
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,571
  • Lot size: 7,993
  • Year built: 1962
  • MLS #: 5711957
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6205 E Covina Street, Mesa 85205, Vineyard OF Mesa Lot 1-195 TR A-D

  • $212,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,324
  • Lot size: 6,993
  • Year built: 1988
  • MLS #: 5665326
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6451 E Sugarloaf Street, Mesa 85215, Red Mountain Village Mcr 309-22

  • $220,000
  • Bedrooms: 2, Baths: 2.5
  • Home size: 2,268
  • Lot size: 6,573
  • Year built: 1988
  • MLS #: 5674044
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1555 E Mahoney Avenue, Mesa 85204, Los Ranchitos

  • $208,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,140
  • Lot size: 10,299
  • Year built: 1940
  • MLS #: 5644385
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1670 Leisure World --, Mesa 85206, Leisure World Plat 14 Lot 1639-1803 & TR A-1

  • $225,000
  • Bedrooms: 3, Baths: 1.75
  • Home size: 1,882
  • Lot size: 10,919
  • Year built: 1979
  • MLS #: 5712242
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10462 E Abilene Avenue, Mesa 85208, Signal Butte Ranch Unit 1

  • $222,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,934
  • Lot size: 5,510
  • Year built: 1999
  • MLS #: 5712521
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1400 E Bellerive Drive, Chandler 85249, Springfield Block Seven

  • $225,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,072
  • Lot size: 4,900
  • Year built: 1999
  • MLS #: 5699686
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4647 E Laurel Avenue, Gilbert 85234, LA Aldea

  • $224,000
  • Bedrooms: 3, Baths: 2.5
  • Home size: 1,375
  • Lot size: 2,655
  • Year built: 2005
  • MLS #: 5711992
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507 N Balboa Circle, Mesa 85205, Stonecrest

  • $190,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,088
  • Lot size: 5,994
  • Year built: 1995
  • MLS #: 5704334
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701 W Dublin Street, Chandler 85225, Thunderbird Park Plat 2

  • $225,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,415
  • Lot size: 7,980
  • Year built: 1960
  • MLS #: 5696470
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ARMLS Listing Data last updated 1/23/2018 2:13 PM MST.

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