Thinking About Renting Versus Buying - Intangibles

by Barb Perruccio & Britt Glassburn 08/04/2019

Dollar for dollar, you might determine that in this year, at this time, buying might be more to your advantage than renting. Alternatively, the numbers may show the opposite: that renting will save you money this year over buying. Given the conventional wisdom that buying is better on the one hand with your bottom line on the other, how do you decide?

The tangibles or the intangibles

Take the example of two identical homes in the same neighborhood. One is for rent, and the other is for sale. Do you choose to rent or to buy?

If tangibly (things you can accurately calculate) the dollars show that renting is less financial outgo (bottom line) than buying, you may choose to rent. However, buying might offset these tangibles with intangibles such as pride of ownership, the ability to make changes and upgrades, or the stability that comes with a fixed mortgage payment.

On the other hand, it might be that dollar for dollar, it would be less expensive for you to buy the home. In that case, is buying always the right decision? That depends. If you are new to an area, you may not be sure that this is the neighborhood for you. Renting for six months or a year gives you an out should you decide that you do not like it there. Perhaps the school does not have the right programs for your child, or you find the commute is too long to your place of work. Until you experience them, you may not be able to determine how these intangibles might affect you. 

Another intangible is flexibility. If you are nearing starting a family, or conversely of becoming empty-nesters, locking down a home via purchase might not be the best choice, because you will have more options in just a year or two. Moreover, if you need to move, repeatedly buying and selling homes produces extra costs in addition to the down payment that you would not have as a renter that needs to move. These include broker and agent fees and closing costs.

Of course, as a renter, you always should prepare for the possibility of your rent increasing with each rental contract or lease. Also, your property owner could decide not to renew your lease for any number of reasons, so you may need to calculate the cost of moving every year or two as well.

Before taking the leap into home ownership or determining to stay in the rental market, talk with a financial professional to determine which scenario best meets your current and future needs.

About the Author
Author

Barb Perruccio & Britt Glassburn

BARB PERRUCCIO / MANAGING BROKER

I have been a Wash Park resident and investor for 20 years and a dedicated real estate professional for the past 14 years. I have a degree from Arizona State University from the College of Engineering and Applied Sciences, Graphic Communications in Printing Technologies. I worked in Sales in the Advertising and Marketing industry in Manhattan for 12 years, San Francisco for 2 years and chose to settle in Denver to raise a family. I now have 3 beautiful children and enjoy living and working in Wash Park!

As a Realtor in Colorado, I have leveraged my sales and Sr. Management skills to ensure each and every transaction runs smoothly. As a Certified Negotiation Expert (TM) in real estate and with over 33 years of sales and marketing experience, I am a strong negotiator and will negotiate diligently on your behalf.

Whether you are planning to buy, sell, build or invest in real estate, I have the knowledge to guide you through the process smoothly and take great care in providing the best and most professional service!  My goal is to build strong relationships in our community one person at a time.

BRITT GLASSBURN / BROKER ASSOCIATE

I have lived in the Denver Metro Area on and off since 1977 and have been investing in the Denver Home Market since 1993. This included doing fix and flips and owning rental properties. I have a degree from the University of Colorado in International Affairs. I have worked extensively in the Sales, Account and Project Management industry and enjoy helping people through the real estate transaction process. In 2014 I decided to obtain my real estate license and work as a full time broker associate. I am a Certified Luxury Home Marketing Specialist and Certified Residential Specialist. My goal is to assist you throughout the home selling and buying process as I have the necessary knowledge to provide you with the necessary information when purchasing a home! We are here to make the transaction as smooth as possible!