To buy or rent, what's the best option in Nashville?
If you are currently renting in Nashville or considering it, then this story is for you.
You’ve probably noticed that renting in Nashville is getting expensive.
In the last year, the average rent for a 2 bedroom unit in Nashville had risen more than $200 to $1,547 a month.
That amounts to $2,400 more in rent per year and that’s a tough pill to swallow as the average income is not increasing as fast.
And all other expenses are going up too due to inflation.
So here is the good news.
Buying right now is significantly cheaper than renting in Nashville.
For example, you could buy an average price home in Nashville for $250,000 and your payment (with taxes and insurance) would be roughly the same as the average rent.
If you want to review my math or see the details, you can check it out here: mortgagecalculator.org
You can also play with the numbers at this site and make them work for your specific situation.
Like all good things, this too will come to an end.
A renter has three big risks if they plan to buy in the near future.
Risk #1 would be the rent appreciation that we already discussed.
Risk #2 is the rising interest rates. Rates have already moved up since the election and are expected to continue their slow climb.
For every 1% increase in rates, the consumer losses $11,000 in purchasing power. That doesn’t seem too bad until you look at the additional interest over the life of the loan. Using the scenario in the mortgage calculator plus 1% would equal $50,792 in additional interest over 30 years. I hope that got your attention.
Risk #3 is rising home prices. When you have both rising rates and prices, it’s the equivalent of the one-two punch. You feel it in your head and your wallet.
You don't have to take my word for it, here is a quote from Trulia and a link to their recent article, "Nashville ranks 15th where buying a home beats renting when comparing the top 100 U.S. metropolitan areas. In Nashville, it is 49% cheaper to buy."
So, if you are renting now and want to purchase in the near future, my recommendation would be to move up as far as you can in your timetable.
And if you have any questions or need a good lender, just hit reply. I’m here for you.
The Daily Deal in Nashville is a nice, 4 bedroom home on 2 acres in Goodlettsville for less than $250,000.
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