Katy, Texas is a great place to buy or rent a home.  You can find affordable housing for purchase, as well as a number of options for single family leases.  To help you with your Katy, Texas rent vs buy decision, here are some calculations for housing costs in one of Katy’s most popular master-planned communities, Cinco Ranch. This latest comparison includes data from 2016 third quarter closed sales. If you scroll down, you can also see how the rent vs buy scenario has shifted from a similar comparison 5 years ago.

Rent vs Buy Calculations For Cinco Ranch, Katy Texas

Cinco Ranch Purchase
Average Sale Price Q3 2016 $400,925
Average Sq Ft of Sold Home 3,275
P&I Payment (80% LTV @ 3.50% $1,440
Property Taxes @ 3% Tax Rate $902
Hazard Insurance $200
HOA $85
Routine Maintenance $100
Average Monthly Cost $2,727
Cinco Ranch Lease
Average Lease Price Q3 2016 $2,408
Average Rent For Similar Size Home (3275 Sq Ft) $2,915
Monthly Payment Difference $188
* Monthly property tax obligation assumes homestead exemption and full valuation by CAD


Cinco Ranch Purchase
Average Cinco Ranch Sale Price Q4,2011 $308,182
Principal  & Interest (80% LTV @ 4.25%) $1,213
Property Taxes (@ 3.2% tax rate) $822
Hazard Insurance $125
HOA Dues $80
Routine Maintenance $100
Average Estimated Monthly Payment $2,340
Cinco Ranch Lease
Average Cinco Ranch Lease Price Q4, 2011 $2,221
Monthly Payment on Similar Size Home (3186 s.f.) $2,643
Rent vs Buy Difference $303


Note! NAR, Trulia and other sites often publish rent vs buy calculations using what is often flawed methodology.  It’s important to take any rent-vs-buy study with a grain of salt, particularly if you can’t see all of the underlying assumptions or methodology used to calculate the numbers. Not surprisingly, many real estate industry websites can make buying a home look more affordable than it really is. I would encourage any prospective home buyer or renter to do their own research and crunch the numbers, paying particular attention to the property tax obligations for local homes. While Texas does not have a state income tax, we do have property tax rates which are more than double the national average.

Real estate is always local, so it pays to do your own research and decide what’s best for you and your budget.  If you have a good down payment and solid credit, my recommendation is that you’ll probably be better off purchasing a Katy, Texas home rather than renting.  To see what’s available in the local Katy market, just click on the links below to view Katy, Texas homes for sale or lease and get started with your own rent vs buy calculations.