If you are relocating to Denver or are currently a renter, you should know home buying pays off quickly compared to renting. According to the latest Denver real estate news, it takes only 1.6 years for a buyer to “break even” compared to the money they spend as a renter. A recent zillow.com study looked at 35 major metropolitan areas in the country to find out whether home buying pays off. The math indicates it’s more financially advantageous to buy a home in Denver. The study looked at the breakeven horizon in Denver for 2014, which was 1.6 years, as well as 2013, which was 2.1 years. Compared to Denver, it takes 3.8 years to break even on a home purchase in San Diego, 4.2 years in Washington D.C. and 5.1 years in Los Angeles. The zillow.com study looked at costs associated with buying such as closing costs. Traditionally, the “five-year rule” of real estate suggests it takes a full five years before it pays to own a home. Knowing the latest Denver real estate news, the question is how to overcome obstacles holding you back from buying a Denver home.
- How quickly can you save?
According to the zillow.com study, 13 percent of the people surveyed need to save up for a down payment before they can buy a house. Some motivated buyers take in a roommate, move in with family or friends or temporarily downsize in order to save up for a down payment. If you are unwilling to wait, talk to your accountant or tax preparer about ways to tap retirement money without triggering tax consequences.
- Are you a first-time buyer?
If you are a first-time buyer or haven’t owned a home for at least 3 years, you could qualify for special programs intended to make home ownership for more affordable. Fannie Mae and Freddie Mac currently offer loans with down payments of 3 percent for those who qualify. Your lender can tell you about specific Colorado first-time buyer programs.
- What’s your time horizon?
If you only want to live in Denver for two or three years, consider a downtown loft or condo. Although some people live in condos for the rest of their lives, there is a healthy turnover of inventory. You will likely find it easy to sell an in-demand loft or condo in a trendy part of town such as LoDo (Lower Downtown), Washington Park, LoHi (Lower Highlands) or RiNo (River North).
For more information about the latest Denver real estate news, talk to us at Downtown Denver Realty. We specialize in condos, lofts and single-family homes in the hottest Denver neighborhoods. If you are currently renting, do the math to find out whether you could build equity and save money as a home owner.[idx-platinum-widget id =”9594-39788″]