If you’re thinking of moving to Phoenix, Arizona, you’re likely already considering where you want to live. There are so many wonderful suburbs of Phoenix to call home, it may be a daunting task trying to decide which neighborhood to call home. Once you’ve settled on a spot, the age-old dilemma pops up…to rent or to buy? Whether you are renting or buying a home in Phoenix, each comes with its own set of benefits and hardships.
Rent or Buy a Home in Phoenix?
Is It Cheaper to Rent or To Buy in Phoenix?
The median cost of rent in Phoenix is currently about $2,550 a month for an average, small home with no pool or extra amenities. For most homes, if you have put 10% down on the home, your monthly mortgage rate will be less than rent would be. As inflation rises and homes become more and more expensive in the Phoenix area, many are left wondering if they should still try to buy in this volatile market or rent until the housing market calms down.
Benefits of Renting a Home in Phoenix:
When you rent a home or apartment, you are paying not only for the space you live in, but the “not my problem” added bonus of not being the actual property owner. This means when appliances break, plumbing has an issue, or something needs a fresh coat of paint, your landlord will be the one organizing and paying for the repairs. For many, the added stress of these sometimes extremely exorbitant problems being theirs to solve is overwhelming.
Once you own a property, every potential hazard becomes yours to fix, and sometimes that can be a much bigger ordeal than you had originally suspected when you noticed a small leak coming from the gutters.
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Renting also provides a sense of security for the commitment-phobes of the world. No, we aren’t talking about being unable to have a healthy relationship or stay at a job for more than two years. Buying a home means committing to this house, this lot, this neighborhood, for a long time. When you rent, you have the freedom to leave if for any reason you decide you don’t love the area or just want a change of scenery. If you start to outgrow a space, this isn’t a big deal if you are renting.
But if you decide the home you have purchased is no longer suiting your needs, getting it off of your hands is a much bigger ordeal.
The Phoenix Metro Area has a large concentration of short-term rental properties, which offers a great insight into different parts of town. If you want to move to Phoenix and rent for a while until you decide where you would really like to put down roots, this could be a useful tool for you.
Many of these homes are rented on websites like Airbnb, or VRBO. They generally come fully furnished as well. If you are moving to Phoenix with all your possessions in tow, this might pose an issue for you. But if you have the opportunity to store your belongings or even leave them elsewhere while you are trying out various parts of town, this is a great way to try before you buy.
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Benefits of Home Ownership in Phoenix Az:
The benefit of owning an asset at the end of the day is always going to serve in your best interest, so theoretically, buying a home is the better choice. This isn’t always an option, but the advantages of home ownership are numerous. Unless you buy a home in full, in cash, you can expect to pay a mortgage payment monthly to slowly whittle away at your mortgage debt.
The average American does not have the financial means to buy a home in cash, especially if they have yet to sell the home they’re currently living in, so let’s assume you will be paying that monthly mortgage rate.
Your mortgage payment may come out to be more or less than monthly rent. This depends on the part of town you consider renting in, the size of the space, etc. But let’s assume you are paying about the same price each month whether you rent the space or own it. After five years of renting a space, when your lease is up, you have nothing to show for it. You will sign another one, or pack up and leave, now looking for somewhere else to live. After five years of living in a home you have purchased, you are five years closer to paying off your mortgage, five years closer to owning this asset in full, and you don’t have to find anywhere else to live; it’s yours forever.
Deciding to buy over rent sounds like simple math, right? Why would you throw your money away each month when you could be making an investment? Unfortunately, it isn’t as cut and dry as the Econ 101 breakdown above. In Phoenix in particular, the rising cost of real estate is making home ownership cost prohibitive to many.
With a ten percent down payment, many still find it difficult to make the minimal payment necessary to purchase a home. The pandemic only compounded the issue for the average prospective home buyer, as homes sold for sometimes hundreds of thousands of dollars over asking price.
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So…Which Is Better? Renting or Buying?
At the end of the day there isn’t a better choice because each buyer/renter is different. Deciding on buying or renting your home is a big decision, and many variables play into the outcome. If you think you are ready to buy, setting up a meeting with a realtor is an excellent place to start, and will put you in contact with an industry expert who can help you navigate these intimidating waters.
