When Is Buying a House Better Than Renting?
According to a 2018 report from RENTCafe, roughly 53% of Denver residents own a home. If you are among the remaining 47% who pay rent every month instead of building equity, you may be wondering when buying a house is better than renting. Let’s take a look at various advantages of renting and owning a house so you can better decide if you should take the plunge into homeownership.
When is Renting a House Right for You?
Of course, as real estate agents, we’d love to tell you that it’s always the right time to buy a new house in Denver-Purchasing a home, however, is not for everyone at every stage of life. Although owning a property is definitely a wise financial investment in the long run, some lifestyles and budgets are genuinely better suited to renting. Here are two reasons that renting homes might be the best option for you.
You Value Mobility
One of the benefits of renting an apartment or house is that you are generally locked into a contract for only one year at a time. Whenever your rental agreement is up, you can decide whether or not to move.
This flexibility means that if you have a squabble with your landlord, can’t stand your neighbors, or are contemplating moving to a different part of the country, changing properties should typically entail a hassle-free experience. Selling a house in Denver can take weeks or months (depending on the market) but renting gives you the advantage of moving house as soon as your contract expires.
You Don’t Have the Time or Money to Invest in Home Maintenance
Landlords typically take care of home maintenance and repairs and this is by far one of the best advantages of being a tenant. You don’t have to mow the lawn, fix leaks, schedule boiler tune-ups, or take care of any of the other tasks necessary to keep your home running smoothly.
If you aren’t ready to take on these tasks yourself, or your budget does not include hiring professionals to do the job for you, you might be happier renting for another year or two.
The Advantages of Owning a Home Rather Than Renting
All that being said, we do believe that buying a house is better than renting for most people over the course of their lives. Here are a few of the most important advantages that owning a home has over renting.
Owning an Investment Property helps Builds Equity
When you’re renting, every monthly rental payment is basically money being flushed down the drain. The only thing you get out of it is a roof over your head for another month. When you buy a property, however, every mortgage payment gets you a little closer to owning the house outright.
You are paying for more than just shelter, a permanent asset. This equity you build every month can be used to make a down payment on another home in the future, take out a home equity loan, or fund your retirement using a reverse mortgage.
Predictable Mortgage Payments
If you opt for a fixed-rate mortgage, your monthly payment is going to stay the same for the next 15 to 30 years (depending on the loan term). Compare that to renting—where a landlord may raise the rent every single year— the long term benefits of owning become pretty obvious. According to Rent Jungle, the average monthly rent for a 2 bedroom apartment in Denver rose from $1,100 in 2011 to $1,777 in 2018.
Your House, Your Way
Perhaps the most thrilling reason to buying your own home is the ability to do anything you want with it. Sure, most landlords might let tenants paint the inner walls, but once you’ve got a house, can customize the flooring, lighting, appliances, landscaping, and more.
Maybe you’ve always dreamed of having a finished basement for kids to play in or maybe you grew up in a house with a wrap-around porch and have always wanted one of your own. As a homeowner, you can shape your house exactly to fit your vision.
To Own or To Rent? That Is The Question
A wise man once said, “Every situation in life has its advantages and disadvantages.”. If you’re still wondering when buying a house is better than renting, it’s time to weigh these advantages and disadvantages.
If you value your mobility, and freedom, and a hands-off approach to home maintenance, renting is probably best for you.
But if you are ready to live in a house of your dreams, build valuable equity, and escape the burden of annual rent hikes, then it’s time to buy a home. If you think that homeownership might be for you, give us a call today and let us help you find a beautiful home in Denver.