Choosing between buying a home and renting one is a big decision! Many will find that the costs of buying are more varied and complicated than they are for renting, which makes it hard to tell which is a better deal. To help you decide, lets compare a few of the homes currently listed on the market for sale and for rent. Similar in size, these homes are great to compare the benefits of buying a home versus renting a home in the same area.
Comparable # 1:
RENT: 4209 Switchgrass is currently for lease for $2,695/month in Celina (Prosper ISD). This home is 4 bedrooms, 3-1/2 bath at 2,725 square feet in size.
BUY: 1627 Grove Drive is currently listed for $364,000 which is approximately $2,884/month** in Celina (Prosper ISD). This home is 3 bedrooms, 2-1/2 baths at 2,724 square feet in size on a premium greenbelt lot.
Comparing the two homes above which are both located in Light Farms in Celina and both offering similar square footage, you can see where in this case you would be paying less a month to rent versus buying.
Comparable # 2:
RENT: 9008 Bedford Lane, McKinney is currently for lease for $2,300/mo in McKinney. This home is 4 bedrooms, 2-1/2 bath at 3,250 square feet in size with a pool.
BUY: 5501 Pandale Valley is currently listed for $359,900 which is approximately $2,606/month** in McKinney. This home is 5 bedrooms, 4 bath at 4,018 square feet in size with a pool.
Comparing the two homes above which are located in McKinney and both offering a swimming pool; although there is quite a bit more space in the buy home; you can see where in this case again you would be paying less a month to rent instead of buying.
RENT: 828 Field Crossing is currently for lease for $2,650/mo in Little Elm. This home is 4 bedrooms, 3-1/2 baths bath at 3,288 square feet in size.
BUY: 5640 Colchester is currently listed for $320,000 which is approximately $2,276/month** in Prosper. This home is 4 bedrooms, 3-1/2 baths at 3,089 square feet in size.
Comparing the two homes above which are located in the 380 Corridor and both offering similar square footage, you can see where in this case you would be paying less a month to buy vs renting.
Remember real estate is a pathway to increasing personal wealth – either yours or a landlords! Of course in every personal situation there are many individual circumstances and life plans to consider in addition to just the monthly mortgage or leasing costs. In either situation you will have initial costs, recurring costs, opportunity costs, and net proceeds. Some costs are more or less depending on buying versus renting a home. The New York Times Rent vs. Buy calculator is a great way that we’ve seen for simplifying these complexities, depending on your own individual specifics.
We know a calculator can only do so much as it might tell you the better long-term decision on paper-that still doesn’t mean it’s the best decision for you. There are numerous advantages and disadvantages to both – that’s why it’s always a great idea to sit down with a trusted real estate advisor. Give The Marr Team a call at 214-620-0411 to help run the numbers for your specific situation so YOU can make the best decision.
**Please note: Numbers used for monthly mortgage payments are ESTIMATES. These PITI estimates were configured with a 10% down Conventional loan with a 720 credit score, 4.625% interest and $120 monthly homeowners insurance on a 30-year loan.