Why Renting Still Makes Sense
With soaring home prices and high mortgage rates, renting remains a smart financial choice for many Americans.
There’s good news for investment property owners: the rental market remains strong, and demand is holding steady. With rising mortgage rates and high home prices, renting has become the more affordable option for most Americans, making your rental property more valuable than ever.
Renting Is Cheaper Than Buying
A Bankrate study found that renting is cheaper than buying in every major U.S. city. As of February 2024, the typical monthly mortgage payment for a median-priced home ($412,778, per Redfin) was $2,703, while the average rent stood at $1,979. On average, buying a home now costs 37% more per month than renting.
In Memphis, the average monthly rent is $1,216, while the typical mortgage payment is $1,843—a gap of $627 per month or over $7,500 annually. Renters facing this kind of disparity are likely to stay in the rental market.
More Pros of Renting
For many tenants, the pros of renting far outweigh the cons. These can include things like:
- Not having to pay for routine or emergency maintenance
- No property taxes or HOA fees
- Lower upfront costs
- Amenities included with rental properties that may not be an option in a single family home, such as a pool, fitness center, etc.
- The ability to move or relocate more easily as a renter
The Continued Aspiration for Homeownership
While nearly 4 in 5 Americans (78%) still view homeownership as part of the American Dream, affordability remains a barrier for many. Bankrate’s Home Affordability Report found that the biggest obstacles include:
- Insufficient income (56%)
- High home prices (47%)
- Difficulty affording down payments and closing costs (42%)
This means more renters are likely to remain in the market for longer periods.
Why Selling Might Not Be the Best Move Right Now
Historically, renting has been more affordable than buying, though there was a brief reversal in 2019 when mortgage rates dropped below 4% and home prices were low. That window has long since closed, and elevated mortgage rates have significantly reduced buyer purchasing power.
For property owners, selling in today’s market may not yield the returns you hoped for. Holding onto your investment property and renting it out can provide consistent cash flow while you wait for market conditions to improve.
Sources & Further Reading:
- Bankrate Affordability Study
- Kiplinger: Renting is Cheaper Than Buying in All 50 States
- Berkadia Quarterly Market Update for January 2025
Congratulations to The Marine Residence!
The Marine Residence was honored at the Apartment Association of Greater Memphis’s annual Diamond Achievement Awards with the award for Best Adaptive Reuse Community.
On-site property manager Danielle Heineman accepted the award at the 1920s themed award ceremony, which was also attended by 901RES property manager Lisa Griffis and marketing manager Emily Stallings.
The Marine Residence was originally a hospital located in historic French Fort in downtown Memphis. The three buildings stood abandoned for decades until their renovation in 2019. The main hospital, nurses’ quarters, and maintenance building are now home to 71 unique apartments.
The community also was awarded Best Apartment Complex in the 2024 Memphis Most Awards, presented by The Commercial Appeal.