Should you keep renting in Lubbock or put down roots and buy? If you feel torn, you’re not alone. The right choice depends on your monthly budget, how long you plan to stay, and a few Texas‑specific costs that can shift the math. In this guide, you’ll get a clear framework, local context, a quick worksheet, and a simple example to help you compare your options with confidence. Let’s dive in.
A simple decision framework
Use these four drivers to steer your decision:
- Price-to-rent ratio: Compare the home price to one year of rent for a comparable place. Lower ratios can favor buying; higher ratios often favor renting.
- Monthly cash flow: Stack your real monthly outlay to own against the rent you would pay for a similar home.
- Time horizon: If you expect to stay a short time, renting often wins. Longer stays usually help buying due to equity build-up and transaction cost recovery.
- Down payment and financing: Your loan rate, loan type, and whether you’ll pay mortgage insurance can move the line between rent and buy.
Also weigh personal factors: flexibility for job changes, appetite for maintenance, and the desire to customize a home.
Gather your Lubbock numbers
You can pull current local inputs from these official and trusted sources:
- Home price trends and regional reports: the Texas Real Estate Research Center at Texas A&M University. Check the latest city and regional housing data at the Texas Real Estate Research Center.
- Local rent benchmarks: look up Fair Market Rents and trends from HUD’s dataset at Huduser FMR, then compare with current listings.
- Property tax rates and homestead exemption details: visit the Lubbock Central Appraisal District for tax guidance.
- Mortgage rate context: review the weekly national rate survey at Freddie Mac PMMS and compare with a lender quote.
- Local market updates: your REALTOR association publishes area insights; see the Lubbock Association of REALTORS for market information.
- Broader context: the U.S. Census ACS and the BLS Lubbock MSA page show population, rent, and employment trends that affect demand.
Keep these handy as you work through the steps below.
Price-to-rent: a quick Lubbock screen
Price-to-rent ratio (PTR) is a fast way to gauge the landscape. It’s simply:
- PTR = median home price divided by annual median rent.
How to use it:
- Under 15 often points toward buying, depending on your loan and timeline.
- Between 15 and 20 is a gray zone. You’ll want a full monthly and breakeven analysis.
- Over 20 often favors renting in the near term.
Treat these as starting points, not hard rules. Lubbock’s taxes, homeowners insurance, and your expected stay can change the outcome. Pull price data from the Texas Real Estate Research Center and check rent benchmarks at HUD’s FMR page, then compute PTR for your target home and neighborhood.
Monthly cost breakdown: owning vs renting
When you compare monthly outlays, include every recurring item so you’re looking at a true apples-to-apples picture.
Owning costs to include
- Mortgage principal and interest: Based on loan amount, interest rate, and term.
- Property taxes: Texas property taxes are significant compared to many states. Estimate using assessed value and your local rates. If the home will be your primary residence, factor in the homestead exemption rules from the Lubbock Central Appraisal District.
- Homeowners insurance: Include wind and hail coverage typical for West Texas. Use an annual quote divided by 12.
- Mortgage insurance: If your down payment is under 20% on a conventional loan, include PMI. FHA and VA have their own insurance or funding fee structures.
- HOA dues: If the property has an HOA, include monthly dues and any transfer or initiation fees if applicable.
- Maintenance and repairs: A common rule of thumb is 1% of home value per year, adjusted for age and condition.
- Utilities and services: Owners may pay more items directly. Include the incremental difference versus renting.
- Optional, but smart: Opportunity cost of your down payment. Assign a conservative after-tax return you could earn elsewhere.
- Potential tax effects: Mortgage interest and property taxes can be deductible if you itemize, though the SALT cap and your income level matter. Ask a tax pro how this applies to you.
Add these up to get your total monthly owning cost, then subtract any estimated monthly tax benefit if you expect to itemize.
Renting costs to include
- Base rent.
- Renter’s insurance.
- Utilities and services not covered by the landlord.
- Parking and pet fees, if applicable.
Your total monthly renting cost is the sum of these recurring items.
Timeline and breakeven: how long will you stay?
Transaction costs make the time horizon a key factor. Buying and selling include fees that take time to recover through equity growth.
- Buyer closing costs often run about 2% to 5% of the purchase price.
- When you sell, plan for agent commission and seller closing fees that often total about 5% to 6% of the sale price, plus any prep or repair costs.
A simple rule of thumb:
- If you plan to stay under 3 years, renting often costs less.
- Between 3 and 7 years, it depends on your inputs and the market.
- Over 7 to 10 years, buying tends to work better in many markets due to principal paydown and appreciation.
Worked example (hypothetical only)
This example shows the process. Replace every number with current Lubbock inputs before you decide.
- Home price: $220,000
- Down payment: 10% ($22,000)
- Mortgage: 30-year fixed at 6.5%
- Estimated monthly rent for a comparable home: $1,200
- Annual appreciation: 3%
- Annual rent growth: 2.5%
- Property tax rate: 2.0%
- Homeowners insurance: $900 per year
- Maintenance: 1% of home value per year
- Buyer closing costs: 3%
- Future seller commission: 6%
How to analyze:
- Compute your monthly owning cost using the components above and compare it to your rent. Early on, owning may show a higher monthly outlay.
- Add equity gains from principal paydown and estimated appreciation each year.
- Compare the cumulative net cost of owning to the cumulative cost of renting over your expected holding period, including future selling costs.
Result to watch for: the breakeven year where owning becomes less costly than renting on a cumulative basis. With inputs like these, breakeven often occurs in the mid to later single-digit years, but your actual result will depend on your rate, taxes, and price-to-rent in your target area.
Texas-specific tax and insurance notes
- No state income tax: This improves after-tax cash flow for both renters and owners.
- Property taxes: Factor in the full levy for your neighborhood and confirm any homestead exemption eligibility with the Lubbock Central Appraisal District.
- Insurance: West Texas wind and hail risk can lift premiums. Get a local quote so your monthly model is accurate.
Sensitivity: what moves the math most
Test at least two versions of your scenario to avoid surprises:
- Mortgage rate: A 0.5% rate change can shift your monthly payment more than you think. Track recent trends at Freddie Mac’s PMMS.
- Appreciation and rent growth: Try a conservative case and an optimistic case. Use the Texas Real Estate Research Center for history and then choose reasonable forward assumptions.
- Property tax and insurance: Adjust these to your actual property and quotes. The difference can be material in Texas.
- Time horizon: Re-run the model at 3, 5, 7, and 10 years to see breakeven risk.
Local context in Lubbock
- Demand drivers: Texas Tech University, regional healthcare, and steady local employers support housing demand. See the BLS Lubbock MSA page for employment trends that influence rents and prices.
- Supply signals: Watch inventory and new construction to understand pricing power. Your REALTOR can share current listing and absorption trends from the local MLS.
- Pricing perspective: Review city-level history at the Texas Real Estate Research Center, and check the U.S. Census ACS for median rent and home characteristics.
Build-your-own calculator: inputs and steps
Use this worksheet to run your numbers:
Required inputs
- Target purchase price
- Down payment percent or dollars
- Mortgage rate and term
- Annual property tax rate and assessed value estimate
- Annual homeowners insurance cost
- HOA dues (if any)
- Expected monthly rent for a comparable home or apartment
Optional inputs
- Expected annual home appreciation
- Expected annual rent growth
- Maintenance rate (percent of home value per year)
- Mortgage insurance rate if down payment is under 20%
- Buyer closing costs percent
- Future seller commission percent
- Marginal tax rate for potential deductions
- Opportunity cost on down payment (expected investment return)
- Holding period in years
Steps
- Calculate monthly owning cost: principal and interest + monthly property tax + insurance + PMI + HOA + maintenance + utility adjustments.
- Calculate monthly renting cost: base rent + renter’s insurance + utilities and fees.
- Project each scenario over your holding period with growth rates. Include closing costs and selling costs on the owning path.
- Identify your breakeven year and compare the cumulative cost gap.
If you prefer a quick gut check before you model, compute your price-to-rent ratio first. If it is low and you plan to stay 7 or more years, run a detailed analysis to confirm whether buying wins under your financing.
When renting wins vs when buying wins
Buying may win if:
- You plan to stay 7 to 10 years or longer.
- Your PTR is on the low side and your loan rate is competitive.
- You value stability, want to customize your space, and can budget for maintenance.
Renting may win if:
- You plan to relocate within 1 to 3 years.
- You prefer flexibility and a simpler monthly budget.
- Your PTR is high and local taxes or insurance push owning costs up.
Your next step
Run the worksheet with today’s Lubbock inputs, then talk with a local advisor who can pressure-test your assumptions against current listings, new-build options, and neighborhood-level trends. If you want help pulling quotes, modeling scenarios, or comparing resale homes to new construction, reach out to Dane Hensley for practical, hands-on guidance.
FAQs
How do I compute price-to-rent for a Lubbock neighborhood?
- Divide the price of a comparable home by one year of rent for a similar property, using price history from the Texas Real Estate Research Center and rent benchmarks from HUD’s FMR dataset.
What monthly costs should I include when comparing rent vs buy in Lubbock?
- Include principal and interest, property taxes, homeowners insurance, PMI if needed, HOA, maintenance, utilities, and any tax benefit; for renting, include rent, renter’s insurance, utilities, and fees.
How long do I need to stay in a Lubbock home for buying to make sense?
- Under 3 years renting often costs less, 3 to 7 years depends on your inputs, and over 7 to 10 years buying tends to work better in many markets due to equity and appreciation.
How do Texas property taxes and homestead exemptions affect my monthly cost?
- Texas property taxes are a major part of owning costs; primary-residence homestead rules can reduce taxable value, so verify details with the Lubbock Central Appraisal District.
If I might relocate in 1 to 3 years, is renting always better in Lubbock?
- Renting usually wins in short timelines because closing and selling costs are hard to recover, but run your numbers in case your PTR is very low and your rate is favorable.
Where can I find current Lubbock prices, rents, and rates to update my model?
- Use the Texas Real Estate Research Center for home prices, HUD’s FMR page for rent benchmarks, and the Freddie Mac PMMS for mortgage rates; pair these with local MLS data from your agent.
