Bottom line: You might be better off buying a home instead.
While demand for condominiums is higher than ever, according to the Denver Business Journal, supply has been diminishing. New condo projects have been hampered, say many industry experts, by the “construction defects law,” which makes it easier for homeowners to sue over property defects. This, in turn, has raised insurance premiums on new condo projects, making financing difficult.
According to the Denver Post, condos represented just 4.6% of new home projects in metro Denver in the second quarter of 2014, compared to more than 26% in 2008.
Those frustrated in their search for condos might well decide to rent, but rents in the city are on the rise. Rentjungle.com reports that as of August, 2014, average apartment rents within 10 miles of Denver were $1,224. One-bedroom apartments averaged $1,046 a month, while two bedroom apartments averaged $1,280. The most expensive Denver neighborhoods in which to rent apartments were Cherry Creek, Lodo, and Auraria.
The good news is that, for nearly the same money, you can buy a home, typically with more space and the advantages of a yard.
Consider the math on buying a home priced at $220,000: To obtain an FHA loan, you will need a 3.5% down payment, or $7,700 (which can be money that is gifted to you). Including principle, interest, taxes, insurance and mortgage insurance, your monthly payment will then be about $1,500 a month – just $220 more than renting a two-bedroom apartment.
The advantages of home ownership over renting are many. You will build equity, enjoy tax advantages (mortgage interest is tax deductible) and find a greater sense of community. In addition, you won’t have to worry about the landlord raising the rent and can decorate the home as you see fit.
In short, don’t let market realities frustrate you. Let one of our agents help you explore all the living options available and, together, they will find the solution that’s best for you.