Are you evaluating the rent vs buy decision? Denton Texas can be a great place to buy or rent a home. You can find affordable housing for purchase, as well as options for single family leases. Denton Texas also has a number of apartment developments around the University of North Texas. To help you with your Denton Texas rent vs buy decision here are some calculations for housing costs in the Denton area. DFW area home prices have been on the rise, and the affordability equation may not be perfectly clear until you look at all of your options. You can see my charts on Denton TX home prices to see how the market has been performing.
Looking at third quarter 2017 closed single-family leases for 3-bedroom 2-bath homes in Denton Texas the average lease price was $1531 per month. The average size 3-bedroom rental home was approximately 1592 square feet. Let’s see how the $1531 lease price compares with the monthly cost of the average 3-bedroom Denton TX home sold in September 2017 of $230,227.
- $853 – Principal and Interest on $184,161 mortgage (assuming 20% down payment, 3.75% 30-yr fixed)
- $549 – property taxes based on $6595 annual bill
- $150 – hazard insurance
- $ 50 – homeowners association dues based on $600 annual bill
- $ 100 – miscellaneous repairs
- $1702 – Total Estimated Monthly Expense for Ownership
Even if you strip out the $100 per month allowance for miscellaneous repairs, the cost of buying a comparable home in Denton Texas is still higher than the cost of renting. This is not surprising considering the rapid increase in home prices seen in the DFW area during the past 5 years. Home price inflation has exceeded rent inflation in most DFW housing markets. I have a similar rent vs buy example for Dallas TX. 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 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. 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.