Every year, hopeful newcomers flock to Colorado to enjoy the outdoor lifestyle, low cost of living, and participation in a thriving economy. Colorado is such an appealing place to live that the U.S. Denver was recently ranked 14th on the Best Places to Live list by U.S. News & World Report.
According to surveys, Colorado has been increasingly flocked by new residents with 5.7 million people in estimation. However, housing prices in Colorado can be quite shocking in the current market, especially if you are moving here from another state.
This is why you have to start saving now if you’re buying your first home in Colorado and settling in the Denver metro area. You won’t have to pay California or New York prices, but you should expect to pay a small premium for the right home.
Why Do People Want to Buy a Home in Colorado?
Many people who wanted to live in Colorado think about whether they should buy or rent a house here. There are many reasons why people want to buy a home in Colorado, instead of renting one. Here are only a few but most common:
Buying a home means enjoying your freedom in what you can do with your house. It is probably the number one reason why people want to buy a house in Colorado rather than rent a home. It means you can paint the walls any color you desire, turn your music up, attach permanent fixtures, and decorate your home according to your taste.
Owning a home also gives you and your family a sense of stability and security. You are investing in your future with equity that will grow with you the longer you are in the home.
2. Building Equity
What does paying your rent on time gain you every month? The truth is that paying rent guarantees a roof over your head for about 30 days and nothing more. Renting is like an extended stay hotel in that at the end of your rental period or lease you have nothing to show for the money you’ve paid.
Each month, a portion of your monthly payment is applied to the principal balance of your loan, reducing your obligation. Because of the way amortization works, more of your monthly payment goes toward the principal and less toward interest. The portion of your payment that goes toward principal is the smallest on your first payment and the greatest on your last payment. The longer you live in your home, the more equity you accrue with each payment.
This makes renting a terrible investment when compared to buying a home.
Homebuyers accumulate equity as the value of their property rises over time, especially when you are in Colorado where houses are quite pricey. This equity has numerous advantages, including the ability for a homebuyer to use the equity in lines of credit to make repairs or additions to their home. Equity is a powerful thing, and it is a natural byproduct of homeownership. Renters never build equity in their rental space, and at the end of their lease, they are evicted with nothing to show for years of on-time rental payments.
3. No Mortgage Interest To Pay Monthly
Homeownership is a superb tax shelter, and tax rates favor homeowners. Sometimes, the mortgage interest deduction can overshadow the desire for the pride of ownership as well. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return.1 For a large portion of the time you pay down your mortgage, interest is the largest component of your mortgage payment.
4. Lots of Options to Send Your Kids to School
Colorado is one of the states with good schools for children to attend to. People who buy their homes in the state, especially those with kids with them, are looking for a place near a school to cut off the transportation costs of sending them off every day.
If you are relocating to Colorado with a young family or intend to start a family, you will most likely be considering some of the state’s top school districts. Aurora is consistently ranked near the top, with A+ schools like Aurora Quest K-8. Hulstrom Options K-8 receives high marks in Northglenn, a northern Denver suburb. Boulder’s Bear Creek Elementary is another A+ option if you want to live closer to the ski areas and have money to spend.
5. Lots of Places for Young Professionals to Go
Young professionals who decided to buy a home in Colorado, especially in Denver, pick a place near their chosen style and interests. Because of the nature of their work, it is understandable that they would be near their stress-relievers. It is not only a place of stress relief but also a place where you can work in your own interest!
LoDo (Lower Downtown), RiNo (River North Art District), Wash Park (Washington Park), and the Golden Triangle (Civic Center area) are just a few examples of urban living options based on your style and interests. Downtown, LoDo in particular, has a hip vibe, sporting events, and concerts. Consider RiNo or the Golden Triangle if you prefer arts and culture. Last but not least, the outdoorsy crowd will want to be close to the parks and water features that Wash Park has to offer.
The cost of living varies, but there are so much to do and so many places to work that are within walking distance or a short ride. Denver also has convenient public transportation, including light rail, city buses, car-sharing services such as Car2Go, and ridesharing services such as Way to Go. If you need to get somewhere, don’t think Uber and Lyft are your only options.
A house is a long-term investment. It’s unlike any other major purchase you’ll ever make. Homeownership comes with a lot of responsibilities, so make sure you’re ready before you buy for the first time. However, as you can see, it has numerous advantages. When considering purchasing your first home, make sure to weigh the pros and cons.
It is important to also consider what you should do before buying a home in Colorado.