By Courtney Hale
In 2005, I lived in a 3 bedroom apartment, my rent was $1,000 a month and a nice dinner-date cost me about $60. Fast forward 13 years. The cost to rent a one bedroom apartment in Nashville exceeds what it cost for me to rent a 3 bedroom apartment not too long ago.
Consider the $300 a night hotels, $15 cocktails with egg whites and restaurants named after Garfield and Woodstock, you almost have to own a baby fortune to date in this city. And if dating requires a baby fortune, you have to be King or Queen of Wakanda to purchase a home.
Yes, Nashville has become an expensive place to live, however the dream of living affordably does not have to be forfeited. Nashville needed no help being less affordable, but apparently no one told the Federal Reserve who began increasing interest rates at the end of 2016. How does this impact Nashvillians?
In March of 2017, if you could afford to purchase a home priced at $315,000, today, with no changes in income, you’d only be able to afford a $290,000 home. Rent will continue to be expensive and I’ll spare you the economic explanation and get straight to the tips.
1. Live in a cool spot (not a hot spot.)
If Germantown is a hot spot, Madison, Donelson or Antioch would be cool spots. Traditionally, housing options closer to the city’s core provide luxuries such as convenient restaurants, bars, gyms, boutiques, co-working spaces, juice bars, etc. These luxuries come with a convenience premium. Nashville’s surrounding suburbs offer more cost effective options for both renting and buying. Like all cost saving strategies, there’s a tradeoff to living in the ‘burbs. Traffic is miserable and with the exception of sleeping, you probably won’t do anything else in your neighborhood, but you’d save some coins!
2. Explore the feasibility of a roommate, flatmate, housemate or whatever you wanna call the person that helps pay the rent or mortgage.
Nashville’s growth will continue to drive certain cultural changes. For example, the migration from the suburbs into the city has been underway for several years. Millennials are more likely to rent as opposed to buy. And we’re all being forced to rethink what transportation looks like in the city. It’s also time to rethink our preferences regarding our living arrangements.
Surrendering the space-monarchy for a more communal and democratic living arrangement not only improves your personal cost of living, but roommates allow you to expand your network, roommates may offer complementary life coaching services, a roommate could serve as a prn workout partner and roommates provide someone to share domestic responsibilities with. Some things are priceless!
3. Do your part!
Whether you’re renting or buying, don’t forget to do your part. Our income and credit history are significant contributors to affordability. Don’t be afraid to double-down on your human capital to maximize your earnings potential or launch a side-hustle to create an additional income stream. Additionally, be intentional about engaging with your credit. Resources like NerdWallet and CreditKarma provide free, convenient and modern options for not only reviewing your credit history, but also having access to the ever elusive credit score. Pay your bills on time (including medical bills and student loans), keep your credit utilization below 30% of your credit limit and only having your credit pulled when it’s absolutely necessary. Adopting these habits will increase your chances of earning prime interest rates and prevent delays in securing housing.
4. Consider the road less traveled.
Knowledge Bank friend of the program and realtor Chris Jordan offered these financing recommendations for prospective buyers looking to not break the bank buying a home in Nashville.
Add HUD homes, foreclosures and VA foreclosures to your housing search. HUD homes are more affordable because the sales prices are minimally impacted by escalating prices in the market. Historically, foreclosures are sold at heavy discounts to their market value as financial institutions are more interested in minimizing their losses as opposed to turning a profit.
Consider THDA loans as an additional financing option as they provide down payment assistance for homes within certain zip codes.
If all else fails, consider moving outside of Davidson County and leverage rural development loans which provide favorable loan terms to move to surrounding counties which qualify.
I’m working on something really cool to support young adults in accomplishing their financial goals. I’d be much obliged if you’d complete this 8 question survey: Knowledge Bank’s Cool Survey
Courtney Hale is a financial literacy advocate and founder of the Knowledge Bank brand