Colorado Real Estate Market: The High Cost of WaitingPosted on Sep 14, 2018
Whether you want to buy, sell or invest in real estate, failing to make a decision is a decision in and of itself. When it comes to the Colorado real estate market, the best action to take is to get off the proverbial fence and own a home with a white-picket fence. By waiting, you often miss out on potential profits as an investor. Sellers miss out on profits as well in the seller's market. Meanwhile, buyers miss out on lower interest rates and home appreciation that comes with home ownership. According to a recent article by businessinsider.com, Gen Z will spend a huge amount of money on rent before buying a home. Millennials spend an estimated $200,000 on rent before finally buying a home. In some parts of Colorado, a $200,000 budget or a little more is enough to buy a starter home.
Buying a home with friends or family
If you are a member of Generation Z, avoid becoming another statistic. Experts point out that Gen Z will spend an average of 11 years as renters before buying a home. Gen Z are considered people born between 1998 and 2016. They could spend $226,000 on rent, according to a HotPads analysis. By buying a home with reliable relatives or friends, it's possible to pay rent money to yourself. Invest the money in a Roth IRA or build up an emergency fund instead of paying money to a landlord. Some young people buy a duplex so they can live on one side and rent out the other side for income.
Figuring out different scenarios
Some of the old advice during housing declines included making sure you wanted to live in the home for at least 5 years to recoup the closing and moving costs. But with the high demand for rental homes, it's not as relevant to consider your job hopping or moving future plans. Instead, line up a good property manager and do the research about turning your primary residence into a rental home if you do decide to become a landlord. Instead of transforming into an "accidental landlord," make real estate investing part of your possible plans right off the bat. According to an article by The Washington Post, a good lender will help you figure out the cost not only of buying a home but of delaying home ownership. The financial impact of buying a home includes the impact on emergency savings funds, tax implications and possible interest rate changes.
At Team Lassen, we share tips for buying and selling homes in Colorado. To get help finding the perfect starter home in Colorado, please contact us.