Renting Vs. Buying a Home in Louisville
Louisville, KY, is famously home to the Kentucky Derby. However, it has a lot more to offer than horse races. This historic city combines the easy living of a small town with the amenities of a bigger city, making it the perfect place to raise a family. Besides, Louisville cost of living is low compared to many other cities.
If you are considering a move to a new city and want to call Louisville home, you may be faced with the eternal question: should you opt for a new home for sale in Louisville or rent instead? Here are a couple of tips to find out what may be the best solution for you in the buy vs rent question.
When is the Right Time to Buy A Home?
Buying a house is a significant investment. For most people, it is one of the biggest purchases they will make in their lifetime, as well as a financial commitment that will follow you for years, if not decades. Finding the perfect home is critical, but so is the timing. So, when is the right time to buy a house?
While there is no definitive answer, your financial position is, of course, a significant component of the equation. You should have a good or excellent credit score to secure a loan and put down a down payment. However, there are also bigger economic considerations as well as lifestyle considerations to take into account. If you can afford to purchase a new home in Louisville, or elsewhere, it may be time to act sooner than later to take advantage of the extremely low interest rates.
Cost of Living in Louisville
The cost of living is always one of the top priorities for those who are considering moving to a new city. We have good news for you: the cost of living in Louisville is 8 percent below the national average.
Housing is a huge part of this low number, as housing expenses in Louisville – including Louisville home values, rent, and so on – are 20 percent below the national average. The median Louisville home price was $176,200 in July 2020, according to Zillow.com. Meanwhile, the average Louisville apartment will cost you approximately $949 per month in rent.
Other everyday expenses, such as groceries and utilities, are lower than in most of the country as well, sitting respectively 5 and 6 percent below national averages.
Renting in Louisville
On average, the rent for an apartment in Louisville is $949 per month. The average price per square foot is $0.98.
Pros of Renting in Louisville
Moving to a new city is always exciting, but it is a big step to take. Despite your best efforts, you may find that your new locale is just not the right place for you. If you are worried about your ability to adapt to Louisville living or, feel like this might just be one stop in your home journey, you may want to rent rather than buy a house, which would be harder to sell if you decided to move again.
Beyond offering flexibility, renting may also be the right choice for you if you do not have the time or ability to deal with the maintenance that comes with owning a house, like snow removal or lawn care. Your landlord will also take care of any repairs with (hopefully) little hassle for you.
Cons of Renting in Louisville
As a renter, you are always limited in what you can do with the property. You will need to ask for permission before making any permanent changes. You are also subject to any changes in rent. In Louisville, rent has increased on average by 3 percent compared to last year.
Another inconvenience you will need to keep in mind when leasing a property is that your rent – unlike a mortgage – will not contribute to building equity on the property. If you are considering staying in the same place for a long time, you may want to consider buying a house instead.
Buying in Louisville
Louisville home values hover around $178,800, according to Zillow.com, with a median sale price of $176,200. The median list price per square foot in Louisville is $138.
Pros of Buying a New Home in Louisville
Buying a home is a big commitment, but it also comes with big rewards. You will be able to transform your house to fit your tastes and your lifestyle best. Any financial contribution, whether it is your mortgage or home upgrades, will eventually add to build your equity on the property.
Besides, homeownership also comes with significant tax advantages. According to the Tax Policy Center, "homeowners may deduct both mortgage interest and property tax payments and certain other expenses from their federal income tax if they itemize their deductions.” Besides, if you decide to sell your house, you will not be taxed on capital gain you realize from the sale up to a limit.
Cons of Buying a New Home in Louisville
Any homeowner will tell you: houses are expensive. You will need to pay your mortgage every month, but you are also responsible for associated expenses, such as the real estate taxes, maintenance cost, homeowner association fees, and so on. Although your mortgage alone may be cheaper than renting, you will need to take these extra costs into account if you decide to buy rather than rent a house.
Whether you decide to rent or buy a home in Louisville, this charming and historic southern city is a great place to live. With new construction homes in Louisville and the surrounding areas, Pulte Homes has plenty to offer, so if you are ready to make a move, check out which properties may be the best fit for you and your family!
Contributed to Your Home blog by Alix Barnaud
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Published 1.6.21