The debate between renting and buying has been going on for years. It's something many are faced with, especially when moving to a new city. Here are some of the things you should consider if you're thinking about buying or renting a home.
Understand Why You Might Want to Rent
There are times when it makes perfect sense to rent in Nashville. If you're not sure which neighborhood you want to live in or you're trying to save up a down payment, renting might be the right decision. The desire to live in downtown Nashville is an option that many people consider, as also view this as shorter term commitment as they feel they may only live downtown for a couple of years. This may be a good time to rent a condo is a desirable development like The Icon.
However, you should always rent with the thought of actually buying a home sooner or later. It should be a temporary situation that helps you get to the next level.
Rent in Nashville can be Expensive
The city of Nashville saw some pretty high rent increases throughout the most popular neighborhoods last year. This is part of why the city became one of the "Best Buy Cities in 2014," on the Forbes list. Increases include:
- 5.9% in Hickory Hollow
- 7.2% in Donnelson, Wilson and Hermitage County
- 8.5% in Briley Parkway and Airport
- 5.5% in Belle Meade and West Nashville
- 6.4% in Murfreesboro Pike and Antioch
These increases make it a better situation for those looking to buy a home.
A Top City to Buy in the United States
With Nashville being named as one of the top cities to buy a home in 2014, it makes perfect sense to buy throughout the city. High rental rates and low interest rates usually point to plenty more buying compared to renting.
The Music City is ranked as the fourth best places to invest in a home and the tax deduction given for homeowners is very helpful, as well. If you're considering renting and you could buy a home instead, you may want to reconsider your options in Nashville.
If you think Millennials aren’t having a major impact on today’s real estate market, think again. As a strong pent-up demand of young and first-time home buyers slowly but surely starts to enter home ownership, inventory—especially in Nashville—continues to dwindle more and more with each passing day.
But even with more Millennials finally making that long-awaited transition from renting to owning, many are still opting to rent rather than buy, but not for some of the reasons you might assume. In recent months, there’s been lots of dialogue relating to hefty student loans negatively affecting the housing market, as potential first-time home buyers might find it difficult to manage the financial obligations of purchasing and owning a home while also balancing a significant amount of student loan debt.
But according to some statistics, the chances of a married couple with no student loan debt owning a home is right around 69.8%, while the chances of that same couple owning a home with around $30,000 in student loans is right around 67.7%—a difference that’s minimal at best.
So if student loans aren’t quite as much of a factor in Millennials forgoing home ownership, what is keeping younger home buyers from entering the marketplace?
Answer: high rents.
In markets all across the country, rentals have exploded over the past 12 to 18 months, and here in Nashville, downtown apartments have had some of the highest occupancy rates since 2007. As a result, rent prices continue to climb, ultimately making it harder for those living in a Nashville apartment to save for a down payment.
Furthermore, Nashville’s limited inventory—for just about anything and everything on the market—is also driving home prices up, additionally making it tough for Millennials and other first-time buyers out there just waiting to finally make a move.
If you are able to buy right now however and have just been waiting for the right time, that time is definitely now. With current mortgage rates staying put for the time being, those who want to take advantage of historically low rates better act fast before we inevitably see a jump, most likely sooner rather than later.
The Ashton Real Estate Group of RE/MAX Advantage
The #1 Real Estate Team in Tennessee and #2 RE/MAX team in the World!