I was reading a recent Trulia report that really stuck out to me about renting and buying real estate. Rent v. Buy is an age old debate that has recently been raging like the Mississippi River due to the falling home values all across the United States. The housing bubble burst and then all everyone talked about was how great of a time it was to buy a home – especially if you were renting! But how can you know that it makes since financially?
Trulia put a study together that looked at asking prices for rentals and homes for-sale on Trulia.com while factoring in other costs like taxes, insurance and maintenance, etc. and they are calling it their Winter 2012 Rent vs Buy Index (you can read the report here). What were their findings nationally? Trulia found in 98 of America’s 100 largest metros it’s less expensive to buy a home than rent. And Nashville was one of the top performers on the list averaging a 9.92 rate on the Rent vs Buy Index from Spring 2011 to Spring 2012.
Trulia’s method is to take asking sales prices and divide them by annual average rents for the same area. If the resulting ratio is under 15 then it is determined that it is better time to purchase than to rent in that area. It’s a really interesting report and has some great data for cities other than Nashville that you might be interested in.
The shocking truth? Buying real estate in Nashville is more affordable than renting. Time to take action!
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