Why You Should Keep Renting

3 Reasons to Hold Off on Buying This Year in Denver

 

There’s no shortage of people that will tell you why you should buy in Denver right now. These reasons include:

  • Denver is growing like crazy
  • Owning is a good investment in general
  • Interest rates are still low
  • Rent is skyrocketing

Which are all true. But that doesn’t mean buying is the right decision for everyone, all the time.

Here are 3 reasons why buying might not make sense for you at the moment in the Mile High City.

You Don’t Have 5% Down

Denver’s market is very competitive. This is due to a shortage of available listings, and high buyer demand.

It’s not unusual to have 5-10 competing offers on any given listing. This means as a buyer, you need to be prepared.

Sellers flat out prefer conventional loans, with 5% or more down payment. This gives them added comfort that you’re in a solid financial situation and able to close the deal.

So if you’re itching to buy, but don’t have at least a 5% down payment, you may consider waiting another year and stashing away some more cash. If you’re fortunate, a gift from family is also starting to become a common option in order to be more competitive.

You Have FOMO

Think deep down. Is one of your primary reasons for buying just wanting to “be in the game”?

Everyone talks about real estate here. It’s an easy topic that most have in common.

That can often be confused as something everyone should be participating in.

I’m of the opinion Denver’s growth still has a long way to go. Denver isn’t going anyway. No one can predict where the real estate market will go, so you might not necessarily be missing out on another year of gains. There are always looming factors that could stall real estate values.

Better reasons to buy include:

  • You want the pride of ownership
  • Your rent just went up $300 and it makes financial sense to buy
  • You’re transitioning into a family
  • You need more space
  • You’ve read why owning can be a great long-term investment and are ready for that

Your Rent Hasn’t Gone Up a Ton, Yet

If you’re one of the lucky few that hasn’t been hit with one or more rent increases, don’t get used to it. 

Rents are on the rise citywide. It’s pushing many renters into buying before they are emotionally or financially ready.

If your landlord has kept rent at a reasonable level, then you might just have an opportunity to save up a little more cash to put yourself in a solid position. Save like your rent will go up $300 next year.