In the last few years, the housing market in Denver and all along the Front Range has been interesting, to say the least. The cost of buying and renting in Denver is included in the top 100 U.S. cities with highest median home values. Deciding whether you want to invest in buying a home or rent a place depends on your family and job situation as well as your credit.
The following post from 7 News Denver with quotes from realtor Angela Smith sums up whether to rent or own in Denver:
In Denver’s tight housing market, does it make more sense to rent or buy?
With home ownership, you’re adding to your financial portfolio, Smith said, noting that the average homeowner has a net worth about 45 times greater than the average renter.
Not everyone can secure a mortgage on a home, however. Smith said renting might be a better option for people who don’t have credit or those who can’t get someone to cosign on a loan.
Renting can also be a better option for those who are new to the city and those who aren’t ready for a long-term investment.
Smith said now is a great time to buy, since interest rates are incredibly low – averaging between 3.5 and 4 percent on a 30-year mortgage.
If you do own a home in Denver and want to make some extra money, you can always consider offering it as a short term rental. This has become a fashionable trend with companies like Airbnb, a peer-to-peer online marketplace enabling people to list or rent short-term lodging in residential properties.
This practice has come under scrutiny by the City of Denver and other popular vacation destinations, where individuals providing this service are being required to become licensed and charge an excise tax. This video shows a condo that is being advertised for rent near Downtown Denver:
As of June 2016, the Denver City Council approved regulations for short term home renters, but many haven’t complied. So with the new year, they are threatening fines for vacation home owner who haven’t gotten their license and/or collected the required lodging tax. Initially, a warning is issued, but there is potential for a $1000 fine.
How many have followed the rules? Only around 20%, but that is similar to other cities having the same issues. This article from The Denver Post explains more about the regulations:
Fines soon possible as Denver gears up to enforce short-term vacation rental rules – The Denver Post
The new year will bring the first threat of fines under Denver’s new vacation rental rules, and there appear to be plenty of potential targets.
Six months into the city’s roll-out of short-term rental licensing, most people who rent rooms or homes on online services such as Airbnb and VRBO still have not gotten on board.
That’s not a surprise. San Francisco, Portland, Ore., and other cities similarly have struggled to get most hosts to start collecting lodging taxes and obtain a license or permit. Such lags often persist for years.
But next week, Denver licensing officials will begin holding out the threat of fines — topping out at $999 for repeated violations — though they say violations still will be met first with a warning.
The short-term rental regulations, approved by the City Council 9-2 in June, legalized the growing practice over some objections from neighborhood advocates who worried they could disrupt quiet blocks. The rules allow the rental of a primary residence for 30 days or less and require collection of the 10.75 percent lodger’s tax from guests.
Read the whole article here: Fines soon possible as Denver gears up to enforce short-term vacation rental rules – The Denver Post
As a homeowner, I understand the idea that having a constant flow of different people staying in neighboring homes could be a problem. Non-residents wouldn’t feel the same about protecting their home turf as someone who is a permanent Denver resident. However, I think most people who have the money to travel aren’t normally going to raise havoc and disrupt the neighborhood.