Rent or buy? Inventory, interest rate, lifestyle guiding factors

By JAY POWELL / For Brentwood Home Page

At the moment, the real estate market is hot in Williamson County. One thing many people are deciding is whether it’s the right time to buy or to keep renting.

At the moment, the real estate market is hot in Williamson County. One thing many people are deciding is whether it’s the right time to buy or to keep renting.

At first, renting seems like the simpler, more economical option, but studies have shown that over time, owning a home is the overall cheaper route.

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Many determining factors go into which is better, based on the market .

One is mortgage rates. When they are low, like they have been for the past several years, it means your overall costs are going to be lower if you finance your home. Second is the market itself. If you buy when the market is hot, you’re appreciation may plummet if the market drops. Conversely, if you buy in a slow market, you likely can earn more value faster if the market picks up.

It’s all about the appreciation

Phillip Cantrell is the founder and owner of Benchmark Realty. Since 2006, the company has helped hundreds of clients find homes in Williamson County, Murfreesboro and Midtown Nashville. Cantrell says that the basic argument between renting versus buying comes down to the interest rates and average home appreciation for the market.

“The bottom line is that it depends on home price appreciation and interest rate mortgage,” Cantrell says.

“Interest has a huge factor,” Cantrell said. “What does a car dealer do when he’s trying to get you to buy a car? He’s not advertising the price of the car, he’s advertising the monthly payment.”

In some cases, if a future homeowner has a good credit score, a good mortgage rate and a rise in his/her monthly rent, buying a home can be heaper, even if the margin is small.

But that’s not always the case.

Cantrell said it may depend on what the government does with the mortgage industry. “They are pushing really hard to increase the amount of money that you have to have down, even on FHA mortgages.

“They’re trying to push it from three to five percent, which will impact people who are pushed more toward renting.”

In some markets, such as Williamson County where last month’s median single family home price was $379,323 and the median condo price was $163,900, rent prices have also risen sharply, causing more to consider buying based on economics alone.

Cost of home ownership far beyond the mortgage payment

Beyond initial expenses and monthly payments, what really goes into buying a home as opposed to renting is assuming responsibility for more than just rent fees and leasing contracts. Not everybody can afford the costs of homeownership; if the plumbing breaks, it’s your job to fix it.”

“Those are real expenses,” Cantrell says. “You own the house, you’re going to fix the roof. You don’t own the house, you don’t have to pay to fix the roof.”

Lifestyle can also be a big deciding factor. In Williamson County, which has seen a marked increase in the number of condos and apartments going up in the past few years, rental units remain a viable choice for many.

Certain lifestyle factors include:

  • Sudden layoff/transfer from a job
  • Being new to the area
  • Forced to sell house due to layoffs/divorce/etc.
  • Not planning on staying for a long period of time
  • Economically unable to afford to buy
  • The house sells quicker than expected

Getting your best dollar

When a home is sold during a buyer’s market, it often closes before spending a single day on the market. The previous owner is then forced to find something quick and renting is sometimes the only solution. According to Cantrell, renting temporarily is also a good way to get the best dollar value out of the whole process and is becoming a growing trend.

“Everybody wants to get top dollar for the house they sell and they want to pay bottom dollar for the house they buy,” Cantrell says. “But that’s contradictory in a free market. The only way to mix it up is to rent in between.”

Cantrell suggests that selling a Williamson County home now while the market is hot and inventory is low can bring in a good profit. On the flip side, “the best way to get bottom dollar is to wait for the climate to decline a little bit and rent for a while.” Buy again when prices come back into line.

The drawback to the rise in temporary renting is the rise in rates, which over time can add up to cost more than a monthly mortgage during a good market.

“There’s been a rise in the rental market and that’s driven rates up because of the people who can’t buy a home,” Cantrell says. He added that most of the people he talks with do not plan to rent long term.

Calculate the cost

There are many resources online for calculating the average monthly rent vs. buying costs, such as, and These sites calculate the average rent and for-sale prices of identical sets of properties based on the current market. These include initial costs, maintenance costs, future costs and the net present value of the property.

Although it’s sometimes the best choice to rent, owning a home is a life goal many continue to share. In order to get the best deal, however, sometimes other measures need to be taken, most of all patience.

“I think the truism is that people will always prefer owning versus renting, if they could. I think that’s human nature anyway,” Cantrell says.

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