Rent vs Buy in Whittier>Question Details

Debsf, Both Buyer and Seller in Whittier, Denver, CO

we are close to retirement and want to downsize. How can we decide whether it would be best to rent or own ?

Asked by Debsf, Whittier, Denver, CO Tue Aug 2, 2011

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What a good question. But without knowing your more of your financial position and retirement objectives it is really difficult to give you a definitive answer. You would do well to consult with a financial planner to see which decision would benefit you most. Having said that, in most situations owining is a better decision than renting.

By owning you have independence, pride of ownership, and equity appreciation just to name a few positives that are benefits to you in general and even more as retirees. Also, by renting you can face higher rents, being forced to move when you don't want to, limitations on what you can do in and with your home. And as I often say, 'You will be making a mortgage payment; either yours or your landlord's'. I have a lender who is also a certified financial planner. He may be a good initial resource for you. Lonnie Glessner - America's Mtg. - 303-993-2367. I hope this helps and feel free to contact me as well.

Robert McGuire - 303-669-1246
Your Castle Real Estate
2 votes Thank Flag Link Tue Aug 2, 2011
Hello Deb,

If my Husband and I were about to retire and wanting to downsize, I think I would stay put for a littler longer. It's still more of a Buyers market right now. Selling a larger home at a lower price and Buying a smaller home just doesn't seem to make sense to me. If you were Selling a smaller house and moving up to a larger Home, I would be saying, yes, sell the smaller home and get the larger home while the price is low. I suppose the ideal situation if you can swing it would be to keep your current home and buy a smaller home now while prices are low and rent one of the houses out. Landlords have it made right now. The vacancy rate is outrageously low, so rents are going up. This is a very vague answer because there are so many unknowns. Maybe your current home is not very valuable in any market and you are wanting to buy a smaller home that's in an expensive area or much newer, then the whole picture is different. You may want to pick a Realtor and discuss your situation in more detail.

Best of Luck,

Sandy Kinslow
The Kinslow Team LLC
Coldwell Banker
2 votes Thank Flag Link Tue Aug 2, 2011
Dear Debsf,

I had family members have this conversation and they met with their CPA and found that purchasing a home was the way to go for them.

With this in mind, you have lots of great information below as well, but I would do what makes you feel comfortable. While being in a home that you own gives you tax benefits, pride of ownership, and financial growth if you consider moving around and travel a lot you just might want to consider renting.

You may also want to sit down with a trusted Realtor and see what type of properties are available in the desired price point. This might help you make this decision based on the inventory that is out there.

If you have any questions at all that I can be of help in answering, please let me know! I would be glad to have a cup of coffee with you and help bounce some scenarios!

Brooke Hengst
REALTOR, CDPE, The Elite Team
Your Castle Real Estate
(720) 988 5952
Web Reference:
1 vote Thank Flag Link Wed Aug 3, 2011
The short answer is I would find a realtor that I trust and I would sit down with him/her and talk about what my goals in retirement are. That being said you can pick up a smaller house at a great price right now. However, not knowing what kind of life style you want to live post retirement, or what kind of assets you want to leave behind it is hard for me to say. I have a pamphlet on how to invest your money in real estate in order to live off your retirement savings rather than cannibalize it. If you are interested, just let me know and I would be happy to send it to you.
1 vote Thank Flag Link Tue Aug 2, 2011
Hi (Debsf), This is a thought provoking question that many of my clients have asked me. I assume that you apprehensive about buying in this market due to the economy and as a result thinking about renting? Maybe this is not your concern. Just a guess. I would welcome an email about why you ask the question and I could better answer your concerns and questions. In the interim, Let me give my insight.

I have a client who is in the same situation. They own a ranch style home on a big lot and wanted to have the freedom to travel without worrying about the maintenance of their home. As the home gets older than they incur repairs. We discussed a contingency where they would find and contract on a lower maintenance home and allow 30 days to sell their home. However contingencies reduce your negotiating power. If you do want to sell and do a contingency for your home than you must be priced competitively to sell quicker and give the seller and quicker close. The best route is to first sell your current home and line-up a short term rental while searching for a new home where you don't have to wait to sell your home to purchase a new home.

So if you are concerned about purchasing due to the economy, there is much investor activity in the market. Investors buy when they believe the market is prime for purchasing. Our interest rates are still historically low and sellers who can afford to sell may not receive the price they desire however they can find value in the market as buyers with a purchase. Historically this real estate market allows buyers to find wealth in future years.

If we as consumers wait to purchase, we will miss the lower interest rates and values. We must keep in mind that inventory is low and that perfect home that is move in ready may be difficult to find however if you are willing to do some remodeling your choices may be more available. There are bank owned and short sales.

We as consumers may not think the market may improve however when is does the interest rates will creep up and home values increase where we home buyers get less for our money.

There are several questions I first ask my clients. When you retire, are you looking for low maintenance i.e. smaller square footage, less yard, etc.? Or do you desire a ranch style home with a main floor master? I see you live in Whittier so I assume it is a 2 story with a master upstairs. I would need to understand why you wish to make a life change with your home.

Regarding the rental market in Denver, it may be difficult to find a rental but not impossible. Our vacancy rates in Denver are very low and make it challenging for many to find a rental. As a result, landlords are able to charge a premium for their rental. I have a client who was looking for a rental in central Denver between $1350 to $2000 monthly. She was interested in 2 properties for rental and both went quickly. She is a perfect tenant. She did eventually find a rental for $2000.

As a result you my end up paying more for a rental due to low vacancy rates and miss the opportunity to buy in a down market.

Please don’t hesitate to email me at or call me on my cell at 303-885-4639 and I can further consult with you.

Stephanie Fix
REMAX Professional Denver
1 vote Thank Flag Link Tue Aug 2, 2011
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Forbes offers some helpful information on this subject.…
0 votes Thank Flag Link Fri Aug 26, 2011
Hello Debsf:
Premature congratulations! That's wonderful!

If you're in a position to buy a home outright with your equity, then you are in a very good position. The last person I spoke with who was looking into downsizing found that they did not qualify for another mortgage. If you think you qualify for a new mortgage, you want to see if you have that option. Still, getting turned down by one lender is not the final answer. Shop around. It pays.

Plenty of people are thinking ranch home. Fewer stairs to climb is what I hear buyers say. Some people have installed elevators and stair lifts to overcome this inconvenience.

It never hurts to look at your options. Generally, buying makes more sense. I'm sure people do hear real estate people say buying is better a great deal of the time because that is the case. In 73 of 100 markets surveyed, buying is better - and that includes Colorado.

However, this is a buyer's market. Many sellers are not prepared to sell at these prices. They either have a price range firmly fixed in their minds, or they are unable to bring enough money to a closing if they are underwater. Sellers can make it up on the buy side. It's worth exploring.

You might be better off postponing your decision, when you take into account it will cost to move as well as other costs associated with moving to a new home. You might want to work with an agent who understands your objectives and can help you get into the right situation.

I mention this last because they are not for everyone. If you're comfortable with a foreclosure sale or short sale, then you should consider getting into something that is slightly used and may need only a few cosmetic fixes. They exist. Bear in mind, however, that you have to have your financing lined up for a bank-owned property and short sales can take a long time. On the plus side, there are condominiums that are attractively priced. Just keep in mind that the HOA fees are not set in stone and can become expensive for someone on a fixed income.

Retirement should be a time for enjoying grandchildren and relaxing. A mortgage rate and payment are something you can lock in. You can set up an automatic payment and tend to more important things like traveling. You can't say that in all cases with rentals. With mortgage rates at historic lows, you owe it to yourself to look at a purchase.

Also recall that the rental vacancies are not getting better right now. In Colorado, vacancies are at a 10-year low. This might be the case for a while.

I hope that helps. I apologize, but I don't work the Denver area. You should interview several local Realtors.

of Longmont, CO
0 votes Thank Flag Link Tue Aug 23, 2011
I can't believe all the definitely buy responses! I know your competing for business but at least pretend you have our best interest at heart. I am 65 yr old newly divorced (26 yrs) and really starting to recover and enjoy no maintenance lifestyle of renting for now. After owning 2 money sucking homes and a 4plex rental nightmare, this new peace of mind is liberating. I can't ever remember an agent telling me this is not a good time to buy. I might consider purchasing if I could match the lifestyle I have now. Living poolside with mtn view in Money mag #1 city to live in USA. BTW you really need to cater to the baby b's. There are millions in my sitch. Doug
0 votes Thank Flag Link Sun Aug 21, 2011
Lot of good answers and information below. A couple of things I would recommend.

1) Talk to a CFP (Certified Financial Planner) and have a discussion with them. I think that is the expert I would want to consult. My father and brother are both CPA's and my wife works in the financial planning education industry. A CFP is a better choice for your situation retirement,inheritance, reverse mortgage and estate taxes, etc If you do go this route I'm happy to supply you with a couple of recommendations. Make sure that you get one who charges hourly. A much better choice than one who works on commission and will want to control a lot of your assets.

2) There are several rent vs. buy calculators on the net. Feel free to google and plug in the numbers.

3) A warning is that lots of these factors don't factor into the rent increases. I would HATE to be a renter in Denver over the next few years. The vacancy rate for apartments is 4.8 percent single family homes are around 1.5 percent. RENTS WILL RISE. Even if it makes sense today to rent will it in a few years with higher rents? If you want totest this theory create and ad on Craigslist like you are renting your home and see how many emails you will get.

4) what type of lifestyle do you want and where do you want it? This might be the biggest factor in your decision and only you know the answer. Let me tell you what I would hate in your lifestyle. bBeing faced with increasing higher rents when your income is likely stable or decreasing. How can you deal with it? Move somewhere else. I'm in my early 40's and moving sucks for me. I'd hate to have to do it a couple of times in my 60's or 70's.

5) I'm guessing you have equity in your home, especially if you have live there for a while. When you do sell what are you going to do with that equity? That is why I suggested the CFP. Have you checked the rates on CD's lately. Yikes.

6) No matter what you decide or when you decide you need a real estate agent. By the way I am one :) You need to get an estimate of what your current home will sell for and you should see what you can buy or what you like. This will give you the information you need to make the best decision.

By the way I'd love to work with you on this as there are thousands of people in Denver in your same situation. It is a market niche that I am pursuing. If I could get a great reference from youI'd be happy to work out a discount with you.

No matter what, best of luck
0 votes Thank Flag Link Wed Aug 3, 2011
Of course the answer you are going to get from all of us is that you should own, but I agree with Brooke. Sit down with your CPA or financial advisor and decide what will be best for you. Both sides have their pros and cons, it just depends on what you value the most, and where you want to go. For example, if you are tired of maintaining a property, renting may be the route you take, but if you want the flexibility to change your physical surroundings, then owning would be a better fit. I will say this however, our country was established on the principle of owning real estate, so the laws tend to favor property owners (hence the tax credit) and give them more rights and freedoms to do with the property what they choose. Happy hunting.
0 votes Thank Flag Link Wed Aug 3, 2011
There are two things here. 1) Taxes. 2) Why pay the mortgage of someone else. One of the best things i have done is to build a team,one of them being a tax lawyer that specializes in Real Estate.

0 votes Thank Flag Link Wed Aug 3, 2011
Hi Deb,

I like Bill's answer below. It's simple and straight forward. But don't forget to
figure tax advantages too. If you are able to deduct a percentage of your
mortgage payment each year from the amount of taxes you owe, deduct that
from the total money you will have going out each year to own a home.
I am not aware of any tax deductions for renting.

I met a man a year ago at a nearby pizza bar and he told me he has always rented. His parents too have
always rented. Why, I asked. He said it was to save money. He said while renting they never have to
pay property taxes. However, property taxes are typically built into a mortgage payment. So, he has
always paid property taxes, but he's paying his landlord's property taxes. He is also making his landlord's
mortgage payment and paying his landlord a profit on top of everything else.

Remember that when you own there are upkeep expenses that you won't have if you rent. So, buy a well
built, newer home, or a home that has been brought up to current code standards and updated, including
current standards for insulation (especially the ceiling) and newer appliances and mechanicals. Be picky.
Good Luck and thanks for asking,
Marita Topmiller
Prudential Indiana Realty Group
Indianapolis, Indiana area
0 votes Thank Flag Link Wed Aug 3, 2011

Numbers don't lie.....simply do a cost analysis for each option, weigh in personal desires, and hidden expenses. Be sure to project your residential needs to your life expectancy. Renting a $10,000 a year for 30 years looks like possible projected $300,000 expense.

Renting does have appeal and there are plenty of people choosing this option but in the end even if the property value doesn't appreciate, you'll have some cash equity in the owned home. If you rent the equity will be enjoyed by your landlord....

Good luck,

0 votes Thank Flag Link Wed Aug 3, 2011
Hello, You should look at the numbers for buying vs renting for your specific situation. I would be happy to sit down with you and go over the numbers with you. I can also provide a free market analysis of your home to show you what the current market value is. Please call me at 303.550.8563 or visit my website at to learn more about me. Thank you, J. David Lampe, Realtor
0 votes Thank Flag Link Tue Aug 2, 2011

Trulia did a study, which indicated that it is more affordable to buy in Denver than rent.

However, everyone's situation is different. I would welcome the opportunity to sit down with you to discuss a reasonable price you could expect from your current home as well as what you might want to spend on a new one.

After crunching the numbers, I believe you will have a better idea what will work best for you.

Best of luck,

John Keene
0 votes Thank Flag Link Tue Aug 2, 2011
You hold the solution for the best answer to this question. Find a good realtor and walk through the process and ask yourself the hard questions. Where are you in 5-10 years? Colorado? What do you want: house condo, apt, golf course next door, no yard, pool, shoveling the walk, garage, easy travel access, views, rural, suburban? Investment for you or your kids? What I do know is is is a GREAT time to buy: prices, market saturation, 30+ year low interest rates, tons of shortsale/REO's/HUD's. Sounds like you need to sell too, where do you want your $ to go? Do you want to build equity or pay someone else's mortgage? You hold the key to this question.

I hope I provoked some thoughts. I would love to help you further. Either way good luck and happy retirement!
Web Reference:
0 votes Thank Flag Link Tue Aug 2, 2011
Dear Debs,

You should definitely buy as it is cheaper than renting and you build equity at the same time. If you rent you throw the money away each month.

Call me and I will provide you with more reasons why renting is better. I can also help you find homes that meet your needs cost and other criteria. I will also be glad to give you a free market analysis of your current home

Call me 303-856-8980.

Ethan Besser, CDPE
Certified Distressed Property Expert
Broker Associate
Keller Williams - DTC
Cell: 303.856.8980
Fax: 303.539.4809

The Besser Choice in Real Estate!
0 votes Thank Flag Link Tue Aug 2, 2011
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