To rent, or to buy, that is the question.
It currently costs less to buy a two bedroom home in Knoxville than it does to rent a two bedroom apartment, if you plan on staying there for longer than a few years. The average list price of a two bedroom house in Knoxville is $94,900 and the average rent for a two bedroom apartment is $680. Operating under these assumptions, the average homeowner would save $13,690 over a 5 year period and $32,902 over a 10 year period.
This calculation comes from Trulia’s Rent Vs. Buy Calculator, which compares the average list price of two bedroom homes with the those of a two-bedroom apartments. The calculations also take into context things such as: utilities, property taxes, tax benefits of buying a home, insurance premiums, and other costs and benefits that come with renting an apartment or buying a home.
Still, there are many other aspects to consider when making the decision of whether you should rent or buy. Check out the comparisons below to see which choice may be right for you.
Here is a list of reasons that it would make more sense to rent:
- Renting allows for more mobility. As someone who lives in an apartment, you have more choice when and where you can move. It may requiring waiting until your lease is up, but you have more freedom. Homeowner’s are tied to their houses selling. Knoxville offers a wide range of apartment complexes, with the median gross rent reported as $637, according to City-Data.com. For people who are not sure where they will be living in the next few years and lavish in the ability to move, apartment living may be the better option.
- As a renter, you have no maintenance fees. One of the downsides of homeownership is the maintenance fees that come with owning a home. Furnaces break, basements leak, and houses need to be repainted — all things that come at an owner’s expense. People who rent benefit from not having these costs. If something breaks in an apartment, you put in an maintenance request and the apartment will take care of fixing it. For people who want to avoid maintenance costs, apartment living could be a good option to consider.
- Renters in Knoxville enjoy a easier, less expensive application process. Applying for an apartment is a significantly easier process than applying for a loan to buy a home. Most apartment complexes charge a security of $150 and an application fee of $100 to cover a credit check, background check and other administrative fees. Getting approved for an apartment is also a less difficult process than securing a home loan, which makes it ideal for people with little or bad credit.
Here is a list of reasons why buying a home might be the right choice for you.
- When you buy a home, you building equity over time. When you rent an apartment, the money you pay for rent you will never see again. With the median rent in Knoxville being $637, that is $7,444 each year, $38,220 every five years that you will never see again. Money put into your home is an investment for the future.
- There are many tax benefits to buying a home in Knoxville. Homeowners can deduct the following from their gross income: mortgage interest payment [for mortgages below $1 million or $500,000 if married and filing separately], property taxes, loan origination fees, and loan prepayment penalties. Also, profits from selling your house can be excluded from your taxes up to $250,000 if filing as single and up to $500,000 if filing as married.
- The property you buy is yours. When you buy a home, you have more freedom to decorate it and change it how you please. If there is something you don’t like about a house, like wall color, carpeting, or landscaping, it is yours to change as you please. People who rent apartments are tied to the restrictions set forth by the apartment complex.
When you are debating renting vs. buying in Knoxville, there are many things to consider. If you are not planning on moving and want to feel like you are investing in something instead of throwing money away, buying could be the right decision for you. However, if you enjoy the mobility renting has offer, you may be better of renting. It is important to weigh the pros and the cons and how they relate to your lifestyle.
If you are debating the benefits of renting vs. buying in Knoxville, I’d be more than happy to answer your questions. Feel free to give me call at 865-696-9002, shoot me an email, or simply leave a comment on this post. I look forward to helping you in anyway that I can.