As the Mississippi ebbs and flows, living in Memphis is quickly becoming one of the most enticing cities you can call home. This City has grown from the home of the blues, bar-b-que, and Beale Street, into the bustling hub of commerce, art, history, architecture and all flavors of entertainment, that you see before you.
With countless inspirations and the dreams of living your best life inevitably leading you down the path to Beale and beyond, the next question to solve is the one of where to lay your hat. Is it time to put down your roots and purchase a home in the Birthplace of Rock and Roll, or should you survey the city without a long commitment through renting?
Well, let’s talk about it.
The decision of renting or buying a home comes with many items to consider: What is the cost of rent versus the cost of a mortgage? What are the trials and freedoms of owning a home compared to becoming a tenant in someone else’s? Is the current housing market in Memphis affordable? And of course, Is the long-term investment worth it? Anxiety of making huge decisions like this are always difficult, however, The city of does it’s best to make the transition of both purchasing a home and renting a property as painless as possible, especially if you plan on putting down your roots and catching the wave of growth, technology, and culture that our City is becoming known for.
To rent or to own? That is the Question!
Memphis is clearly in the midst of a cultural and commercial evolution, becoming one of the most interesting and enticing centers for career opportunity, home equity growth, and according to CNBC.COM “The 5 cities in America where you can live like royalty on a $50,000 salary .” The incentives to flock to Memphis are boundless, but, when coming down to the brass tacks of the decision to buy or rent, cost is always paramount to the decision. There are many amazing resources to help mold the decision, and to boil it down for you a bit more, here are some hints and details that we have cobbled together to help you along your journey.
But what does this really mean? “The amount of time it takes for owning a typical U.S. home to make more financial sense than renting an identical home is now 1.96 years – or a little under a year and 11 months,” according to Zillow’s Buy-Rent Breakeven Horizon. The breakeven horizon varies by region, with the shortest among major markets in Memphis, Tenn., where it takes just 1.32 years (a year and almost four months) for owning to financially beat renting.” The key take-away here, is that after a year and four months of paying your mortgage, you will have more equitable value in your home than if you were to decide to rent. If you can put down 20% as an initial down payment, your mortgage should be around $780 a month for a 30-year fixed rate mortgage, as opposed to $1,100+ a month for renting a similar property.
Owning Versus Renting: The Challenges and Choices:
Generally speaking, the goal of both renting and owning a home is to find a comfortable location to enjoy yourself, find some rest, and feel safe. What happens however when there is an electrical short and half of your kitchen catches fire? As a homeowner, it is time to act, look up the phone number for your homeowner’s insurance, and dole out the deductible. Your kitchen will be saved; however, your credit card might be a bit lacking for space when it comes to fill the brand-new cabinets that were just installed.
As a tenant, depending on your landlord (and lets assume for this example, they are an outstanding and shining example of the perfect landlord), contacting them, explaining the situation, and asking for assistance leaves the cost and coordination to the property owner, saving you from breaking the bank to remove the soot from the ceiling.
Certainly, as an owner of the home, you have the power to decorate, improve, and create the perfect home of your dreams. You could even own a Giraffe if you wanted to, without anyone dropping by and asking about the extra “headroom” in the garage, not to mention the equity of the house that will grow with each improvement you make to your home.
At the end of the day, making the choice to rent or to own a home is based around your budget, level of commitment, and dedication (or lack thereof) to the upkeep of your property. Considering the Federal Reserve recently cut interest rates, if you’ve been saving up to buy a home, the time is now!
You may also be interested in: Memphis Property Tax: Here’s how to calculate your property tax!