Nashville has a particularly exciting array of available condos, from lofts in restored historic buildings to gleaming high-rise condos with amazing views. With all the excellent reasons to move to Nashville, it's no surprise that condos are in high demand. But is it better to buy or rent a Nashville condo? Read on and explore the factors below to weigh what may work best for you.
Consider Rent Costs vs. Mortgage Payments
To decide whether it's better to buy or rent a condo, consider the costs of rent vs. mortgage payments. At a glance, renting might seem more affordable, as renters have fewer financial responsibilities than owners. However, the cost of rent still adds up significantly in the long run, especially because rent prices have a tendency to change, and that change is typically upward.
Mortgage payments, on the other hand, are often more stable in that the interest rate is usually fixed. That means payments remain the same throughout the loan repayment period, which in most cases is about 30 years. As a result, owners can easily work out an efficient repayment plan that they'll rely on for the life of the loan, making repayment simpler. Also, unlike rental costs, some mortgage payments are tax-deductible. Generally, mortgage borrowers are eligible for both state and federal tax breaks for cleared mortgage debts up to $750,000.
Those on the fence should consider working out the cost difference between renting and buying in the area they're interested in, taking into consideration how long they expect to live there. They might find that homeownership isn't as out of their reach as they thought.
If You Own a Condo, You Can Rent it Out
Another perk of buying vs. renting a condo in Nashville is that owners can always rent their condo out if it's not their primary residence. And with Nashville's significant tourism potential, owners can be confident of attractive profits from the venture. Nashville is even nicknamed the Athens of the South for its countless attractions, ranging from its famed music to architectural gems and natural spaces.
According to Nashville hospitality research and statistics, Nashville attracts over 16 million visitors annually, and the majority of those who come here stay an average of three to four days and spend roughly $180 per room per night. About 44% of those who visit are often here to see sights and attractions or attend the city's annual festivals, such as the annual Nashville Film Festival, while about 41% come to Nashville for business. What's more, about 91% of visitors report they're likely to come back. These stats indicate the incredible profitability potential of turning a Nashville condo into a vacation rental. As a bonus, rent payments can be put toward paying down the owner's mortgage.
If You Own a Condo, You Can Build Equity
Even though renting offers the flexibility of moving whenever convenient and means renters are only responsible for their own belongings, rent payments can be compared to throwing money into a void since renters don't see returns at the end of the lease.
When one buys a condo, on the other hand, they build equity with each mortgage payment. For instance, if they spend $5,000 in mortgage payments, they automatically get the same amount in equity. By the end of the mortgage repayment, they'll have built equity they can leverage to renovate the condo, make a down payment for a second property, or make other real estate investments. They'll also have complete ownership over the condo, adding to their portfolio of assets.
If You Own a Rent a Condo, You Can Avoid Homeownership Costs
Similar to buying, renting has its perks, too, one of the most significant ones being no homeownership costs. As a renter, residents are aware of exactly how much to set aside for the condo each month or during each lease, and should there be changes, the landlord will update renters beforehand. Renters are also only responsible for their belongings, while the condo owner handles overall maintenance costs.
Renters don't have to stress about home insurance, or monthly utility costs such as sewer management costs, as these are typically handled by the landlord as well. This makes living in a condo a breeze for the renter as they only have to ensure they pay the lease or monthly rent required, while the rest, from maintenance to insurance, is taken care of by the landlord.
To Rent or Buy a Condo in Nashville
While the decision to buy or rent a condo in Nashville boils down to preferences, purchasing a condo helps owners build equity and expand their asset portfolio. Owners can also renovate and make improvements to personalize and maximize their condo space to their liking. While mortgage payments might be expensive in some instances, owners can always rent out their condo and use the passive income to cover mortgage payments, making it a profitable asset. But renting has its perks, too. For instance, renters can easily pack up and go when their lease is over. Each individual may have a different answer that's best for them.
Nashville Condo Resources
- Buying a Condo vs. Renting: 4 Things Nashville Buyers Must Consider
- Condo Maintenance in Nashville: Understanding Common Elements & Limited Common Elements
- 4 Design Tips That Make Condos Stylish & Spacious - Coming Soon!
- Search Nashville Condos For Sale
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