Rent in the Denver market the last couple of years has absolutely skyrocketed. See a listing for an apartment on Craigslist, and be prepared to show up with a check if you are planning on securing an apartment to rent. A 2 bedroom apartment in Capital Hill is running about $1200 a month, up year over year the last 5 years. But what are you actually getting for your money when you rent? What are the benefits? The belows 5 facts will really be an eye opener for you, as you decide more closely, if you want to RENT or OWN.
1. Your RENT is not tax deductible, which means if you pay $1500 a month in rent, you through away $18,000 a year, and $90,000 over 5 years. That is dumb. Plain and simple. It is not securing your future, giving you an asset, or helping your legacy with your family.
2. You cannot RENT out your place on Airbnb, when you want to travel abroad, and make money while you travel. For example, if you rented out your condo for $90 a night for 20 nights out of 30, that would be $1800 in gross rental income. Say your condo costs about $1200 a month to own with HOA. You just got your mortgage paid, plus made $600 in the process for travelling for a month.
3. The money you invest in fixing up your place, painting, adding lighting, finishing touches, etc, is of no benefit to you, because you are leaving this to your landlord when you leave, or worse, they will make you put everything back to the way it was before you leave.
4. You are left with nothing – A memory. No investment, no asset. Nothing to add to your legacy. All the money you spent on all those years is simply wasted, thrown out the window. A 10 year history of renting a $1500 condo will cost you $180,000, and help pay down the landlord’s mortgage. Why would you want to do that.
5. It is more expensive to RENT then OWN. Take a $300,000 house in Highlands Ranch, CO, which is a suburb in south Denver. The rent is $1900 a month. If you bough that same home with 5% down, and no mortgage insurance the loan would be $285,000. At 4.5% for a 30 year mortgage, your Principal and Interest payment is $1444.05. Add another $300 for taxes and insurance, and your full payment is $1744.05; Less then your rent payment.
All you would need is $15,000 down, and 2% of that can be a gift from a family member. As long as your credit score is a 680 or higher, this loan is available for you today in Colorado.