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Rent vs Buy?

Let's be honest, you could do a Google search on "Rent vs Buy" and come up with thousands of articles and calculators which will give their opinion on whether you should rent or buy. And I wholeheatedly suggest that you check out a few of these websites before coming to your own conclusion.

But here is my two cents... The Rent vs Buy decision comes down to two things: means and stability in life.

Means: Can you qualify for a mortgage? If you are unsure of the answer to this question I highly recommend talking to a few mortgage brokers. They will be able to analyze your specific scenario and see what, if any, options will work best for your situation. Means also refers to having some cash for a downpayment as well as an emergency fund for those pesky home repairs which come up every so often.

Stability in Life: This is intentionally vague, but the idea is simple. Do you plan to stay in an area for at least a few years? Do you have a stable job which doesn't require you to move often? Do you want the freedom to pick up and move on a whim? If you are confident that you will be in the area for at least a few years, it generally makes financial sense to buy instead of rent.

You'll notice that I did not mention "what you can afford" as a criteria. I find that, at least in the Denver area, rents and mortgage payments are similar enough that you should never feel that you can't afford to buy.

In short, if you are willing and able to buy, and you are confident that you will be sticking around one area for at least a few years, I recommend buying vs renting. The monthly costs are similar, but with buying you will be putting money into forced savings every month (by paying down your principle) and you will have a pride of ownership which is missing when you are a renter.


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