Rent vs. buy — the case for flexibility

“A HOUSE is made of walls and beams,” the writer and educator Dr. William A. Ward once said, “and a home is built with love and dreams.”

Anybody who has ever undergone the arduous task of combining those two — that is, making a home out of a house through the act of buying one — knows that it’s much easier said than done.

For young people putting down the roots of their lives, buying a home is one of the most challenging, consequential, exciting and stressful things they’ll ever do.

But it’s definitely worth it, says a youthful Denver couple who successfully underwent those challenges not long ago and are now happily ensconced  in a century-old South Denver house that they can proudly call their own — and their home.

THEIR transition from renters to homeowners was far from easy, Dan and Adrian Simon say, but they have absolutely no regrets about the decision they made.

In their early 30s,  both Dan and Adrian grew up in Colorado, spending most of their youth in the Denver area. They met when both were employed by the JCC.

Dan, who sells slot machines to casinos, graduated from college in 2000. Adrian, who works as controller at the Denver Museum of Nature and Science, graduated a year later. Their first child, a daughter, was born a few months ago.

At first, as they were establishing themselves in their jobs, they did what many young couples do when starting out — they rented a home. Theirs was located near 7th Ave. and Holly St.

“We were just graduated from college, just getting settled into careers and really didn’t know what our lives were going to look like in a year,” Dan says.

The rental arrangement was fine for its time, they say.

The couple appreciated that as renters they had more freedom and mobility than they would have had as homeowners.

“There is some freedom knowing that you have no responsibility; that if you get an opportunity in another city or another part of town you can pick up and leave pretty easily,” Dan says.

“That’s nice, but when you don’t own the place, any work you do you’re just walking away from. Any improvements that you make to the house or the yard, if you make a beautiful garden, you’re just leaving it.”

Although fully aware that the money they were spending on rent would never come back, they waited a few years before deciding to buy because they needed to build their credit and financial capability.

As Dan puts it: “The most important thing to us was stability at that point in our financial situation.”

Just as important, they didn’t want to make the commitment of a home purchase until they were certain where their lives would lead them.

When they eventually arrived at the realization that they wanted to stay in Denver, buying a home in Denver made perfect sense.

“It was very important to us to be able to say that our situation looks like we’re going to be fine with this five years from now,” Dan says.

The Simons went house-hunting.

THEY are “absolutely” grateful, the Simons add, that their home purchase in 2004 came a few years before the recession descended, threatening jobs and tightening credit for homebuyers.

That was luck, more than anything else, but they didn’t rely on chance in choosing the right neighborhood, both in terms of where they wanted to live and where they felt confident that property values were relatively secure.

“Part of our buying decision was the fact that you don’t get the big swings in property values in the more established neighborhoods in Denver.

“I think if the market goes way up it’s not going to swing quite as high here, but when the bottom fell out it certainly didn’t drop like it did in other areas.”

Their new home, in the now-fashionable Washington Park West neighborhood south of downtown, is an oldie — 100 years old, in fact.

The home’s age and condition made it more affordable, the couple says, but the price-tag came with a formidable to-do list.

“It was pretty beat up and rundown,” Dan says, but the structure’s aesthetic deficiencies didn’t deter the Simons. For six months after buying it, they continued renting in East Denver and spent a good part of their spare time working on their home.

When asked to give advice to other couples or individuals in their shoes, the Simons say don’t be discouraged by the prospect of facing a “fixer-upper.”

“Don’t be afraid to buy a house that looks ugly and make it your own,” Adrian says. “That’s what we did and we love our house now. It was a little bit painful for a few months, but in the end we made it.”

“You can change things in the house going in to make it your own,” Dan says.

The couple hired electricians and plumbers to handle the more technically challenging renovations, but did much of the cosmetic work, such as installing tile, painting and some carpentry, themselves.

What they didn’t already know, they learned.

“We weren’t scared to try to learn new things,” Dan says. “Neither of us are contractors but a lot of this stuff is not rocket science. If you have a little patience and a little time you can really save yourself a ton of money and build yourself a home that you really feel is your own.”

The savings can be quite substantial, Adrian adds.

“Don’t buy a house just because the kitchen is redone and it’s beautiful,” Adrian says. “If it’s $100,000 more because of that, don’t do it. You can’t eat a house. If you have to change your lifestyle to buy a house, it’s probably not worth it.”

WHICH is not to say that “lifestyle” is not a very important factor in choosing a house.

The Simons were nothing if not thorough in selecting both their neighborhood and their house. They investigated several Denver neighborhoods and toured dozens of houses before making their final decision.

“We probably looked at about 50 houses before we bought this one,” Adrian says. “We just liked the neighborhood, being close to the park, being in central Denver, the older houses, the trees, the little shopping areas that are within walking distance.”

“And the access to the highways,” Dan chimes in. “Everything is very central  here and we love being able to walk. That’s a big deal to us.”

The moral of the story is to find a house — and a neighborhood – that’s a good fit with your lifestyle.

“We really like Denver,” Dan says, “and we found a neighborhood that we thought that we wanted to spend time in. From that standpoint it was pretty easy to make the buying decision. Knowing that you’re going to be in a place for at least five years, it just made sense to buy and build up equity in the house.”

They’re not certain how long they’ll stay in Washington Park, but from their present perspective, it’s likely to be quite awhile.

They are confident that their home will be a secure and wise investment, but this consideration was secondary to their ability to view their house as a home.

Dan says, “In buying a primary residence, I think — and this comes from advice from my grandpa and my father – you should look for a place where you like to live. You shouldn’t be looking to make money off your primary residence.”

Not that the Simons are oblivious to the importance of investment.

They recently purchased a house and lot in Washington Park East, on the other side of the park, which they are renting out now.

“The primary thought was that eventually we’d like to scrape over there and build on that lot,” Dan says.

“In the meantime, we thought it would be a great opportunity because it’s a huge lot in a neighborhood with a lot of small lots . . . so we thought if we don’t ever get to building on it, it’s still going to be a really sought after piece of land in this neighborhood.”

That’s a wise strategy for long-term financial security, he adds, but doesn’t affect their conviction that the choice for a primary home should be based much more on where, and how, you want to live, not how much money you might eventually make on it.

“We look at an income property completely differently than we look at our home.”

Copyright © 2011 by the Intermountain Jewish News