Sometimes, my friends think that it will be more beneficial to rent rather than buy in Denver. Sure, the landlord handles the routine home maintenance when you rent. So, no maintenance falls to you. But, otherwise renting is just plain more expensive. And, renting limits what you can do with your home or apartment. However, the $27,262 you would save in rent by buying a home might should you think twice.
Is it better to rent or buy in Denver?
In order not to have to pay “capital gains taxes” on your home, you must live in it as your primary residence for two of the last five years. If you’re looking to rent for at least two years, the amount of money you save will shock you. The calculations on the table above don’t even take appreciation of the home into consideration. With that, you can add another 5% to 10% to the total savings. Figure your own savings with this rent versus buy calculator.
The Buying Table
If your rent budget is around $2,000 a month, you’ll probably get a nice little apartment or even town home to rent from someone else. You’ll pay their mortgage and they’ll reap all of the benefits.
However, if you choose to buy a home, you will not only save at least $27,000, you’ll be able to call that place yours. Paint the walls, redo the bathrooms, whatever it is you want because it’s your home. If in two years you decide to move, you’ll easily walk away with half of your money back that you would have put into the rent.
But, Its Not Exactly What You Want?
Of course it isn’t. Why do you think they call it a starter house? It’s not where you want to end up. It’s probably older and more dated in it’s style than you prefer. Those fancy brand-new apartments are flashy and seductive. But, remember that you can make inexpensive updates to a home you own as time goes by. Rarely, is your first home your ideal home. But, as lone it is located in good Denver neighborhood, it will appreciate and provide good security for your future.
Instead, it’s a place to start. I call it getting onto the escalator. As home prices increase, you develop equity in your home. Later, you can trade that equity to another home that be larger for a family or newer to your own taste. But, at least you’ve made a start.
And, you benefit from one more bonus. Your net worth starts to increase. Many people find that their biggest financial asset is their own home. In fact,many people use their life-long home to help finance their retirement. And remember those monthly payments can stop when you pay off your mortgage. That way, you might only pay the taxes and insurance to have a “rent-free” place to live later in life.
Consider buying a home now that interest rates are so low. That makes lower payment every month. They will not stay this low forever. Contact me and we can discuss your personal option. I’d love to hear you.