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Renting vs. Buying; Cost No Longer an Excuse For Choosing to Rent

5229 Pierre St1When thinking about a home, the question always arises, “Rent or buy?” And while situations vary, as do markets and the economics that go into determining that answer, one of those solutions seems to relentlessly prevail. At the end of the day, buying a home means ownership and investment and it could also mean a smaller price tag, making it the smarter financial answer.

Believe it, you read that last sentence right. In many places including Boulder, renters are paying top dollar for places they will never be able to truly call their own. Those who have chosen to buy homes are actually getting a price break and saving money by choosing to purchase. The price of falling mortgage rates has made purchasing a home just as reasonable as renting one.

Leasing isn’t a money saver in this economy, and it certainly is not an investment the way owning a home would be. Some renters are paying up to $3,500 a month in Boulder, making it an unsettling decision to many that turn up empty-handed at the termination of their lease.

1641 4th St1Something else that exists for homeowners that renters are missing out on is their return on investment. With renting, there is no return. Perhaps it is a cheaper solution for a temporary situation, but renters have nothing when the lease is up. Putting down money on a house is an investment. Not only do you make payments towards owning the house, but when you start improving or adding to the home, you are increasing the house’s value, or developing a higher return on investment. Creating a higher net worth will prove to make your home an asset whether you stay in it or decide to sell it years down the road.

Not all housing options are going to be alluring or an easy flip where there is a clear ROI for the potential buyer. This leaves some people questioning whether investing in a cut-rate home is worth it, and the answer is yes.

At the end of the day, an investment is an investment. A venture of any sort means you have a tangible asset that you can use, rent, or sell; in other words, you can make money off of it.

Renting, once again, means the renter is not putting their money towards anything or any sort of investment. If you are debating a cheap home, just remember it is an investment and most likely worth it. With that being said, do keep in mind the costs that will go into owning the home and what the future could look like for the market. There isn’t a guarantee for profit for every home you purchase, but most of the time owners will reap the benefits. The guarantee for renting is that you aren’t investing your money in anything; the money is being lost.

3965 Broadway1Renting can be a good option for those who are looking for a short-term situation, but it isn’t necessarily the cheaper option. Renting vs. buying a house can come down to eyeing the deal as an investment, not just somewhere there is a roof over your head.


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