Renting vs. Owning

I get many questions about today's market and if we have reached the bottom. The Denver area's home inventory is lessening month over month and is down over 20% since last year. Timing the bottom in any real estate market is nearly impossible. By the time the bottom has been reached, prices have already started increasing and the smart buyers have chosen the best values from the inventory.



If you are making the decision to continue renting or think it is the right time for you to buy, this will help you make a more informed decision by weighing the pros and cons of each. In most cases, the scales tip in favor of purchasing a home over renting one.



Advantages of Homeownership:
Tax Breaks: Mortgage interest and property taxes are generally tax deductible on your federal and state income tax returns.

Investment Appreciation: Real estate appreciation historically has paralleled or exceeded the rate of inflation. On average, homes have appreciated at an average rate of about 5% annually while some years have been more or less. Appreciation varies across the nation by geographic market.

Capital Gains Benefits: Homeowners are allowed considerable profit without incurring capital gains tax when selling their primary residence. Federal law was revised in 1997 allowing an individual up to $250,000 in gain. Homeowners should consult their legal or tax advisor regarding this popular tax benefit.

Housing Cost Stability: For buyers with a 30-year fixed rate mortgage, mortgage payments typically remain the about the same for the life of the loan. Tax and insurance rates may vary affecting the payment amounts, but principal and interest do not change. Homeowners may experience salary increases over time, while their housing costs remain stable. Rent typically increases along with the renter's paycheck based on current economic conditions.

Equity: Money paid into a mortgage over time helps the owner build equity in their investment. Renters never see their money again after rent is paid to the property owner.


Advantages of Renting:
Financial Issues: Renting may be practical for those who do not or cannot afford the financial commitment of homeownership. Some people move frequently, have credit problems, or simply cannot afford the type of home that they prefer.

Maintenance Responsibility: When renting, the landlord assumes the costs affiliated with upkeep and repairs, and renters save time and energy on maintenance. Homeowners must accept the physical and financial responsibilites of such necessities.

Lower Income Considerations: For some lower-income families, cash is hard to come by and renting requires smaller amounts of upfront to move in. Likewise, the tax benefits may not be great enough to offset the costs of homeownership.

*Buying a home is a huge decision and one of the largest investments a person may ever make. It is good to consult your real estate professional, legal and tax advisors when considering a purchase of a home. Most people want a home they can enjoy living in and not just a good tax deduction, so it is very important to consider the aspects of ownership versus renting.

Tips on Selling Your Home in Today's Market

Getting your home ready to sell may seem like a daunting task besides everything else that we have going on in our daily lives. Below are some tips that are helpful in making the process as easy as possible:

1. Remember, first impressions last the longest. The first thing potential home buyers see when walking up to your house are landscaping, exterior paint, the front door and the front door's hardware. So, if there is chipping paint anywhere, touch it up and make the landscaping looks presentable. A new kick plate and door hardware can do wonders to spruce up the home's first entryway. Often times if there seems to be deferred maintenance at first glance, buyers will wonder what else not been addressed or taken care of in the home.

2. Having a stager come in and evaluate your home is a good idea. They are especially good at making small spaces seem bigger and can give tips on furniture placement. Their job as a professional is to give an objective view on what potential buyers will see as positive and negative aspects of the home and how to accentuate the positive and minimize the negative.

3. Make rooms look as light and bright as possible. Dark linens can make a room seem darker than it truly is. Change these out or make sure shades are drawn to show the natural light and add lighter colors in the form of a rug, window treatments or a light paint color.

4. Make sure to clean your home thoroughly. Add air fresheners if needed to make rooms fresh and pack clutter in boxes. Get a storage unit if need be. Buyers do not want to see that you are running out of space. Also, put away personal photos that are a distraction to the wonderful features of your home.

5. Remember to let potential buyers know the great things about your neighborhood. More and more home buyers are looking for homes that are close to shopping, restaurants, parks and other conveniences nearby.