The debate continues as renters and potential homeowners weigh their options as to buy or keep on renting. Skeptics on both sides have solid reasons for each but what does renting vs. buying look like in Reno and Sparks, NV?
Mark Robinson, of the Reno Gazette Journal, posted an informative blog about the rental rates and required income for a two bedroom apartment in Nevada. The post is taken from data presented by the National Low Income Housing Center’s report on high rental rates. While both articles have a lot of information I would like to focus on two main points.
- The fair market rent for a two-bedroom apartment in Nevada is $875 a month.
- The annual income to afford this apartment is $35,000.
Let’s see what that $875 will get you in the rental world.
- A boxed shaped living space within another larger box adjacent to many similarly boxed living spaces all connected by common walls.
- A front door that opens to a grand view of your neighbors door or wall.
- A patio that allows enough space for a BBQ (Community or Landlord approval needed) and maybe a fold up chair.
- Laundry rooms that are for common use. Meaning your neighbor will throw your half dried clothes out to dry his if you’re not watching.
- One covered parking space and guest parking. If you’re lucky you have a detached garage a half block from your unit that has enough space for a Miata.
- Freedom to live as you please… Well not completely free all improvements, painting, and decorating must be approved by the Community or Landlord.
Now let’s see what $875 per month has to offer in the world of home ownership…..
For a $120,000 home, a 3.5% down FHA Mortgage, 5% interest rate, and $1,500 in yearly taxes would have an estimated cost of $872 per month. That’s right, that’s the same or close to what a two bedroom apartment will cost you.
Here’s what you can get with that $120,000.
- There are 1,148 homes listed in our MLS that are active or pending at $120,000 or less. 815 of these are not under contract and available for purchase and 331 of these homes for sale are located in Reno and Sparks.
- All of these 331 homes have at least three bedrooms.
- None of these homes have a common wall with a neighbor.
I understand the initial cost of getting into a home is the biggest reason for being stuck in a rental. For many, especially those under at or under the $35,000 yearly income there is some help with down payments via the Nevada Rural WISH Program.
After all that I should probably go back and change the title to, “Why Are You Still Paying Rent?”.
Feel free to contact me with questions about home ownership, the home buying process, or the Nevada Rural WISH Program.