Rising rents convince many to plunge into home ownership

Listening to the footsteps of upstairs neighbors made Robin Rhodes and Kyle Shoulders think about buying a home of their own. When they realized their monthly mortgage payment would be about the same as their rent, their minds were made up.

“Renting, you’re flushing thousands of dollars a year down the drain. Now we won’t just be paying someone else’s mortgage,” said Rhodes.

The combination of low mortgage interest rates, rising home prices and the rising cost of renting an apartment is making the idea of buying a home more attractive, said Re/Max Masters Realtor Angela Gallinari. She was Rhodes' and Shoulders’ agent.

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The average monthly rent payment for an apartment in Nashville was $1,246 in December 2015, according to Rent Jungle, which tracks national trends. In Green Hills, where Rhodes and Shoulders were renting, the average was $1,787.

After Rhodes and Shoulders close on their house in mid-February, their monthly payment will be $300 more than the $1,500 they pay for an older apartment. They expect to benefit from the ability to deduct their mortgage interest from their federal income taxes and from the equity they’ll build in the house.

Their new home, which is being built by DuBolt Construction, has 2,300 square feet of space, three bedrooms, 2.5 baths and a two-car garage. What it doesn’t have is just as important, said Rhodes.

“No neighbor on top of us, stomping around,” she said.

Keith Bolton, a partner in DuBolt, said virtually all of the company’s clients are first-time buyers.

“A lot of people are still trying to live the American Dream,” he said.

Buying a 'no-brainer'

Renting can be a smart choice when people move to the region and are learning their way around, said Gallinari. Once they choose a neighborhood and are ready to buy, she advises them to be prepared to make an offer without delay.

“It’s so competitive. Once they realize houses are going so fast, they know it’s ‘go time,’ ” she said. “When you find what you want, you have to put in your offer or you’ll lose it.”

Even making an offer above asking price does not guarantee success. One house in Antioch, in southeast Davidson County, received 21 offers, said Gallinari.

Finding a house to rent also can be difficult. Carly Crouch discovered that when she arrived at a rental open house to find five other applicants in line ahead of her. Another house was outdated and had baseboard heaters “so old I’d never seen the likes of them.”

“A friend mentioned maybe it was time to buy. I didn’t think I could do it financially,” said Crouch, who wondered about her credit rating and lack of a down payment.

After learning that she qualified for an FHA mortgage and $5,800 in down payment assistance from the Tennessee Housing Development Agency, she decided to buy a house.

With the help of Kim Cunliffe, a Realtor and broker with The Wilson Group, Crouch found a house in Donelson just over a year ago. She purchased a recently renovated home with 1,367 square feet of space, three bedrooms and one bath.

“I decided to go for it and we wrote a contract for the asking price after it had been on the market for two days. When I found out my mortgage note would be $1,038 a month, I was so happy. Compared to the prices I found available for rent, it was a no brainer,” said Crouch.

Chad Wohlers, a Realtor with Parks, said renting can be convenient, but it doesn’t necessarily cost less than owning a home.

“A lot of times, a mortgage is equal or less than renting. And there’s the value of investing in a city like Nashville,” he said.

Reach Bill Lewis at 615-262-5862 or wlewis77229@comcast.net.