Entry 22: Renting vs. Owning

1. For the majority of my career, I would like to reside in Denver, Colorado.
2. This is the website I found my home in.
1. The purchase price is $250,000
2. The down payment, assuming 10% of the price, is $25,000
3. Total estimated closing costs, assuming 3% of the price, is $7,500
4. Total monthly mortgage payment:
1. The Principal and Interest payment is $1,074 according to the home website.
2. The Property Taxes are $1,944 for a year and $162 per month.
3. Homeowners Insurance is $800 for a year and about $66.67 per month.
4. The website tells me that my PMI is $117. My total PITI is $1302.67.
5. Total monthly utility bill = $136.52
3. This is the website for the apartment that I found.
1. The monthly rent is anywhere between $1,795 to $2,265. The average of this range would be $2,030.
2. The security deposit is $300.
3. On the “What Does Colorado Renters Insurance Cost?” section of this website, I found that the average renters insurance is $15 monthly to insure $15,000 in personal property, thus the yearly renters insurance would be $180.
4. According to the apartment website, dogs and cats are allowed (for more details there’s a policy section for pets on this website); however the website doesn’t necessarily detail any other restrictions, but it would be safe to assume that you wouldn’t be able to make alterations to your apartment without prior approval.
4. Advantages and Disadvantages of buying a home and renting
1. For this entry, please assume that I am looking for a place to live with my wife and possibly two children.
2. Some advantages of buying a home is that eventually it will gain value and I can use that money to help my family and I financially, I can make any modification that I want to my house, over time I am actually spending less money than the amount of money I would have spent renting the apartment, and with a house I can get tax breaks. However, some disadvantages would be the fact that I have to spend more money on furnishing and modifying the house to my liking, the upfront costs, and the fact that it would probably be farther away from my workplace.
3. As for renting, the advantages that I found were that I only have to worry about paying for rent and the utility bills and the renters insurance, I also have access to a sense of community with the other renters and the apartment pool, and I am a very short distance away from the center of Denver. Despite the benefits of renting, some disadvantages that are apparent are that eventually you are going to start paying more for rent than the homeowner would for purchasing the house, you are restricted by the apartment management, and the fact that you have people living in rooms next to yours decreases the level of privacy that you have within your apartment.
4. Due to these advantages and disadvantages, I would personally lean toward buying a home over renting an apartment, because if I have a family and have a seemingly stable job, then it’d be very beneficial to have a home especially since it helps keep you safe financially and it allows you to personalize it a lot more than an apartment. Also, the fact that my family and I would have total privacy and the house could provide me with a lot of money if I ever decide to move anywhere outside of Colorado.