Are you better off buying a home in Knoxville or continuing to rent?
I get inquiries often from buyers who find the cost of buying a home to be a bit overwhelming.
But after we sit down and I lay out the benefits of actually owning a Knoxville home of your own versus continuing to rent one they almost always see the financial and other intangible benefits of buying now.
Here’s how you can do your own analysis.
Currently our average sales price in the Knoxville, Tennessee area is around $165,000 for a typical 3 bedroom, 2 bath home with a 2 car garage. A home like this would typically rent for $800-1,000 a month.
In this market I can usually negotiate seller paid closing costs into a sale so your cash to get into a new home would be $0; that’s right, you can still get $0 down mortgages at affordable rates in Knoxville, Tennessee.
Here are the numbers for a 5 year, buy vs. rent scenario.
| Buying Analysis | |
| Based on the information provided for a 5 year period: | |
| You will pay a monthly PI (Principal and Interest) payment of: |   $885.00 |
| You will gain a tax advantage of: |   $11,105.00 |
| You will gain an equity appreciation of: |   $52,751.00 |
| Totaling a net value gain of: |   $63,857.00 |
| Selling the home in 5 years will incur closing costs of: |  ($6,317.00) |
| Giving you a total net benefit of ownership of: |   $57,539.00 |
| Rental Analysis | |
| Based on the information provided for a 5 year period: | |
| If you chose to buy you would have paid home buying expenses of: |   $53,145.00 |
| You will pay rental expenses of: |  ($66,495.00) |
| Giving a difference of: |   $-13,350.00 |
| Investing the average yearly difference of $-2,670.00 for 5 years at %8 yields: |   $0 |
| Final Analysis |
| Because your Total Benefit of Ownership of $57,539.00 is GREATER than your investment yield of $0, it would be in your best interest to BUY this home rather than to RENT it. |
When you combine the tax benefits of owning a home, the annual appreciation in value, plus the investment benefits, it almost always makes more sense to buy than continue to rent.
Visit www.KnoxvilleHomeCenter.com to find some great choices in homes to buy then let’s get started buying you a Knoxville home of your own instead of renting and helping your landlord buy the home or apartment you’re in now.
