Not sure whether to rent or buy a home in Dallas TX? It can be a difficult decision because Dallas is a great place to buy or rent a home, depending on your circumstances. You can find affordable housing for purchase, as well as great single family rentals.  Dallas Texas also has a number of apartment developments with all of the recent growth during the past few years. To help you with your Dallas Texas rent vs buy decision here are some calculations for housing costs in the Dallas area. DFW home prices have been on the rise, and the affordability equation may not be what many industry pundits are advertising. My advice is to fact-check your sources and consider who is “selling” you on the rent vs buy choice.

Looking at third quarter 2017 closed single-family leases for 3-bedroom 2-bath homes in Dallas Texas in zip code 75248 the average lease price was $2168 per month. The average size 3-bedroom rental home was approximately 2113 square feet. Let’s see how the $2168 average lease price compares with the monthly cost of the average 3-bedroom Dallas TX home sold in the same zip code costing you roughly $378,640.

  • $1403 – Principal and Interest on $302,912 mortgage (assuming 20% down payment, 3.75% 30-yr fixed)
  • $756 – property taxes based on $9076 annual bill
  • $175 – hazard insurance
  • $ 50 – homeowners association dues based on $600 annual bill
  • $ 100 – miscellaneous repairs
  • $2484 – Total Estimated Monthly Expense for Ownership

In this particular zip code of 75248 buying a Dallas TX home is definitely more expensive than renting a comparable property. This is not surprising considering the rapid increase in home prices seen in the DFW area during the past 5 years. I pulled zip code 75248 because it is close to the average price of a Dallas TX home sold in September 2017 of $371,163. This example is not an outlier; It’s an example of what you can find all over the DFW area. Home price inflation has exceeded rent inflation in most DFW housing markets. Depending on who you are asking, the rent vs buy equation will likely bring up some interesting conversation.

Note! Trulia/Zillow, ATTOM and other third party aggregator sites may publish rent vs buy calculations using what is often flawed methodology.  I have detailed how bad some of their estimates can be. 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. 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 you will probably be better off purchasing a Denton, Texas home rather than renting.  The rent vs buy decision is not always as easy as some people make it seem. It often boils down to personal choice. To see what’s available in the local Denton Texas market call or email today.