If you have not noticed rent is going up and up for the last 5 years and so have the price of homes. So that means they are on the same pace when it comes to expense right? WRONG (Trump voice) it’s actually cheaper to rent than to buy right now let’s look at why.

   Now I can only speak for the Texas and surrounding Houston market, other markets may not reflect these numbers. I did a market analyses to provide accurate numbers for the Baytown area but what I’ve seen in the Houston and surrounding areas are consistent with the difference in renting and buying according to he area.

   As you can see below the average price sells price for a 3 bed 2 bath home you are looking at $208,000 and the average rental price is $1,650. At $208 how much do you think your monthly will be? Well let’s look at some numbers if you get a regular home loan, the average rate right now is 3.375%, 30 year loan, taxes are in the $4,000-$8,000 depending on neighborhood, and home insurance about $1,200. With all of this combined you are looking at a monthly of $1,404.04 with taxes at 5k a year not only are you saving $246 a month you are starting to build wealth! You may think “well I’m not ready I have roommates” that’s even better to be honest you have someone to pay most of your monthly payment! IT’S A WIN WIN and once you are ready for a place of your own you lease that one out completely, it pays its self, you make some extra cash as we covered because rent is more expensive than your mortgage, and you use that extra cash to pay for your next mortgage.

Side note: If we want to elevate, we must think like the 1%

   Last thing to touch on is the requirements and down-payment. You will be shooketh to find out that the requirements for a home loan are similar or less stringent especial for the nicer rental homes. Most landlords are looking for a someone with a 600+ credit score, good rental history, good background, and 3x the monthly income. For a home loan the basic is 580+ credit score, employment, and FHA guidelines allow for a DTI of 43% and sometimes up to 56.9% with compensating factors. With those numbers lets look at what kind of down-payment you are looking at, for a rental of $1,650 that would be a total of $3,330 to move in because of the first months rent and a matching security deposit. To buy a home you will be looking at a 3.5 down-payment for FHA at 208k that would be $7,280 but lets look at a deal that most new builders have. For example there is a new builder that is offering to give the buyer 2% of the home value for down-payment, they have a nice two storie for 219k with the incentive you would be looking at a down-payment of $3,285 that’s without an extra down-payment assistance that you might qualify for. You actually save money even when it comes to the down-payment.

Side note: depending on the builder and the specials they have going on you may even get money back. IE: two months ago at Goose Creek Landing (my favorite Neighborhood) they where offering thee buyers incentives of 18k if you bought an inventory home, meaning a home that is already built.

Jovani The Realtor 
Phone (call/text): 281.515.6828
Email: Jovani@lionsgaterealty.com

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