Most people will agree that one of the biggest decisions that anyone can make in their life is to purchase a home. However, with the burst of the housing bubble, credit crisis, and millions of foreclosures across the U.S., some homebuyers may be wondering if buying a home in Greater Nashville, or anywhere else for that matter, is a smart plan.
Like every other market, the housing market unavoidably has it's ups and it's downs. However, even though the market fluctuates, it doesn’t mean buying a home in the Nashville area is a bad investment. The truth still holds that homeownership is considered "one of the best long-term investments for individual households."
History has repeatedly shown us that real estate has increased in value, despite shorter periods of depreciation due to local markets and/or national economic conditions. Housing data also reveals that homes generally appreciate around 5% per year.
Savings & Investments
You may be thinking that 5% is not the greatest ROI, but you have to think about it in the context of the situation. Let’s say, for example, that you put 10% down on a $275,000 house. That is a $27,500 initial investment - and at 5% annual appreciation rate, your $275,000 home would gain $13,750 in value during the first year.
Earning $13,750, on an investment of $27,500 is a 50% return, which is not too shabby. Furthuremore, if you were to, instead, invest that $27,750 down payment in the stock market - with a 5% return, you would gain only $1,000 in profit.
Tax Benefits of Home Ownership
At this point, you might be saying that a home may have a higher return, but that's before you consider all of the costs involved with owning a home, such as taxes, etc. There are actually many tax benefits that could potentially make owning a home quite profitable.
Your property taxes as well as the interest on your mortgage are both tax deductible. And you can deduct those costs from your income - reducing your overall taxable income.
Other Advantages of Home Ownership
Aside from your property taxes and the interest on your mortgage being tax deductible, there are other advantages to buying a home in the Nashville area to consider, such as:
- The pride of homeownership (number one reason why people desire to own their home) and making an investment towards your future.
- Over time, equity is built up by the payments and appreciation of the home's value. (Equity is the actual value of the home owned beyond the amount due on the mortgage).
- The cost of ownership can often be less than renting.
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- The experience of personal freedom by being able to redecorate, remodel, or make improvements as you see fit.
- The experience of fewer restrictions. There are a fewer number of rules that a homebuyer must abide by, such as restrictions as far as pets, children, and noise goes.
- A significant advantage of home ownership is a sense of stability for the property owner and his or her family.
- When mortgage payments are made on time, the homeowner can achieve a better credit rating. Once you close escrow, your credit score will get a bump and the credit offers will start coming in.
So, when considering whether or not to buy Greater Nashville area real estate, consider the broad range of benefits that owning a home can provide you!
Give us a call today and we will put you in touch with one of our highly-qualified, preferred lenders! 615.438.4941
And always make sure you have an experienced Greater Nashville real estate agent and loan officer to ensure that you are getting a home that is right for you!
Related Greater Nashville Home Buyer Articles
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- Finding the Right Seller
- Pre-Qualifed vs Pre-approved
- Hot, Normal, and Cold Markets
- Importance of Inspection
- Your Credit Score Matters
- Buying a Foreclosure
- Why Hire a Buyer's Agent?
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Whether you are ready to buy a home in the Nashville area, sell your existing home, or invest, our team of experienced real estate professionals will work relentlessly to make sure your experience is a positive and rewarding one!
Please give us a call or send us an email today! We look forward to helping you achieve your Greater Nashville area real estate goals.
Over 15 years experience helping Buyers and Sellers!!
"The Realtor Who Knows Construction"
RE/MAX Fine Homes
1624 Westgate Circle Suite 125
Brentwood, Tn 37027
Cell: (Direct) 615.438.4941