One of the most common things people consider when choosing where to live is whether they should rent or buy. Over the last decade, Denver’s population alone has grown by 20% welcoming more than 115,000 new residents to the mile high city. Here in Colorado, we have an overwhelming number of people who move from out of state who often find themselves renting apartments and homes thinking it’s their only option, and that buying a home here is out of reach. Here’s what you should consider when deciding whether to rent or buy:
Renting a Home
Renting does come with some benefits especially if you are only looking for a short term or transitional option. A lot of people like having onsite maintenance, or the ability to call up their landlord for quick fixes around their home. Some rental properties and communities come with great amenities like pools, dog parks, and playgrounds. And, renting often seems like the “cheaper” option for some, the average rent in Colorado ranging from $1,300 – $2,000 as of January 2020.
Buying a Home
Buying a home in Colorado is the smarter option financially. While a rental property may seem like the cheaper option at surface value, looking deeper you realize that your money is basically being thrown away when renting. Owning a home is the key to financial freedom and potentially even wealth.
In a previous blog, we talked about how wealth in America can be found through home ownership. Unlike renting, your monthly mortgage payment is working directly for you, covering taxes and taking off the overall cost of what you owe on your home. You can also set your monthly mortgage payments at a fixed-rate, so that it doesn’t change or increase over time even if your home increases in value or you start making more money. This is unlike renting where your landlord or property manager has the ability to increase rent as they see fit, especially as the market changes.
Owning a home can also help people create a budget and start a savings account. Unlike renting, you’ll be in charge of your own maintenance, updates and emergencies so putting aside money each month is a great way to build a savings account. Plus, the money in your savings account can build interest over time.
The bottom line
Renting is great for a short term option, but over the long term you are throwing your money away. Buying a home is a financially smart decision and it is more attainable than people think. Talk to a realtor about your options, financing, mortgage pre-qualification and more to get started on your home buying journey!