Buying vs Renting – 8 Pros and Cons

Buying vs Renting – 8 Pros and Cons

Did you know that June was National Home Ownership Month? During home ownership month, we were asked quite a few times on the benefits of renting versus buying and in honor of that, I decided to dive a bit deeper into the topic. This is a tough decision today for many people and for a variety of reasons, but let us look at some factors on both sides of the debate and hopefully when I am done, it will help you make a decision.

The Pros

  • 82% of American’s say they want to own a home. That means they are in demand and if bought in the right location, for the right price and kept in good shape, home ownership is still a good investment.
  • Household formations are occurring at a rate of two million per year in the US, but we are only producing about 1.1 homes for sale each year including new construction. This is why you see so few homes on the market for sale. This inventory shortage will not end anytime soon. That means at best, home values will increase and at worst, keep them relatively stable in most parts of the country.
  • For now, you can still deduct as a tax write off the interest you pay on your mortgage each year. I say for now because there is some discussion about taking this away when tax reform comes around. Lawmakers have been talking about taking away the mortgage interest deduction for decades but it never happens.

    “I don’t see this going away, it benefits too many Americans” -Dan Polimino

  • Buying a home, at least in Denver remains a less expensive option in many cases over renting. Rents are sky high in Denver! In fact, rents in Denver are among the top 10 most expensive if not the top 5 around the country. Denver rents are competing at the same level as Seattle, Dallas, Miami, NY, Chicago and Los Angeles. When you think about buying a home at only, say a 4% interest rate, in many cases the monthly mortgage payment is less than what you would pay in rent. Moreover, as you pay your mortgage, you are reducing the principal balance and gaining equity in the home, which you cannot do on a rental property. Additionally, landlords can and will raise your rent making renting in some cases just unaffordable.

Rent prices in Denver are among the top 10 most expensive in the country

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Then there are the intangibles. Homes are meant to be changed, updated and made to your order. Homes are places to make memories, live your lives, and places of sanctuary that you can call your own.

The Cons

  • Home values are obviously at an all time high and that’s means when buying a home you are buying at the top of the market. This came back to bite more than a few people during the crash of 80, 90 and 2010, so you can understand why some people are gun shy about buying a home. If you rent, you can watch the market and look for the next down turn as a signal of when to buy.
  • Renting is a great reason to figure out where you want to live. Let us just say you are new to Denver and don’t really know the layout of the land just yet. Maybe renting in a neighborhood or two will help you refine exactly where you want to live. Sometimes renting in a particular area confirms or denies what you think and like about that neighborhood. Thus, maybe helping you avoid a costly mistake by owning a home in an area you found out you didn’t like very much.
  • We wrote about the fact that 82% of people still want to own a home. However, of the 82% that want to own a home, 86% said they don’t want to take care of it. That seems to be a growing trend and no doubt taking care of and maintaining a home is not only costly, but time-consuming. Obviously renting doesn’t require the maintenance and the cost.
  • Yes, rents are sky high, but renting doesn’t require you to come up with a huge down payment that is needed when buying a home.

I am sure there are more positives to renting than what I listed here but these are the obvious ones. After reading both columns Part One and Part Two we hope we have given you enough thoughtful information to make a decision on buying vs. renting. If you would like to talk more about this with one of our professionals you can reach us at 720-897-1630 or

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