Arizona Home Renting
Since mid-2009 in metro-Phoenix, the monthly cost to rent a home has been higher that the cost to buy. Renters have not only been paying for the owner’s asset while it increased in value, renters have also been putting cash into the owner’s pocket.
The really sad part to this is that there are “grant” programs available in Maricopa County that give, literally give, cash to people with which to buy a home … money that’s never paid back if the buyer lives in the house for three to five years, depending on the program.
However, it is true … over a short term period, five years or less, the trend for most local home markets may be up or down … but long term, a home is going to cost more … to buy or to rent
For a buyer, the biggest cost, acquisition, will have been fixed while the asset purchased increases in value … one of the very few things we buy that increases in value over time. Renting never fixes housing costs beyond the lease term, usually a year or less.
Even so, there are circumstances were renting is economically prudent. For example, to buy and/or sell real estate involves significant costs, so if you are likely to need to relocate within a few years, less than five, renting a residence is very likely to be less costly. For another example, financing costs and fees can go through periods where they are extraordinarily high, making purchase delay a logical tatic.
But such circumstances are the “exceptions”. Long term and in most circumstances, buying is economically superior to renting.
– As owner – Mortgage Interest write-off
– As Renter – None.
– As owner with no loan or a fixed-rate loan – Fixed
– As Renter – As landlord decides – and rent goes up forever
Options to change, decorate, & improve the property:
– As owner – As you see fit, and with the benefits of added value to you
– As Renter – As owner approves, and with the benefits of added value to the owner
– As Owner – Home appreciates to create equity
– As Renter – No equity ever!
Control of Your Life:
– As Owner – You make the decisions
– As Renter – Landlord makes the decisions – at lease end you could be evicted!
Home verses Living Quarters:
– As Owner – Your house is, and feels, like “home”
– As Renter – Your living situation is always temporary
Feeling of Accomplishment:
– As Owner – A sense of the “American Dream”, true freedom, accomplishment
– As Renter – Going nowhere!
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