Renting vs. Buying in Colorado Springs: What’s the Real Cost?
Renting vs. Buying in Colorado Springs: What’s the Real Cost?
Is it cheaper to rent or to buy a home in Colorado Springs? If you’ve been thinking about homeownership, you’ve probably heard arguments on both sides. Some say buying is always better because it builds equity, while others argue that renting is the smarter financial choice, especially in today’s market. So, which one actually costs more in the long run?
Let’s break it all down and take an honest look at the real costs of Renting vs. Buying in Colorado Springs.
Monthly Cost Comparison: Renting vs. Buying
To compare apples to apples, let’s take a real-world example of renting and buying the same type of home: a three-bedroom house in Colorado Springs.
- Renting: The average rent for a three-bedroom home is around $2,200 per month. One of the advantages of renting is that you don’t have to worry about property taxes, maintenance costs, or unexpected repairs. However, rent can increase every single year, sometimes at rates higher than the standard 3% annual increase.
- Buying: Let’s say you buy the exact same home for $400,000, with a 5% down payment and a 7% mortgage interest rate. Your estimated monthly mortgage payment, including property taxes and insurance, would be around $2,800 per month. That’s $600 more per month than renting, but the long-term financial impact differs significantly.
At first glance, renting appears to be the more affordable option on a monthly basis, but this isn’t the whole picture.
Hidden Costs of Homeownership
Owning a home comes with additional costs that renters don’t have to worry about. Here are some hidden expenses to consider:
- Maintenance and Repairs: If the air conditioning goes out, replacing it can cost $5,000 or more. Need a new water heater? That’s about $1,500. And let’s talk about the biggest potential expense: the roof. Due to hail storms in Colorado Springs, roofs often need to be replaced every 5 to 10 years, which can be a huge expense.
- Property Taxes & Insurance: These costs are added to your mortgage and increase over time. Property tax hikes and rising homeowners insurance premiums can make homeownership more expensive than anticipated.
- Homeowners Association (HOA) Fees: Many neighborhoods in Colorado Springs have HOAs, which can add anywhere from $50 to $300 per month to your housing expenses.
Hidden Costs of Renting
While renters don’t have maintenance costs, there are hidden expenses associated with renting too:
- Rent Increases: A mortgage stays fixed for 30 years, but rent can increase every single year. Even if it rises by just 3% per year, that adds up over time. If the market changes significantly, rent can spike even higher, making long-term budgeting difficult.
- No Equity or Wealth Building: When you rent, you are essentially paying your landlord’s mortgage instead of building your own equity. Over time, homeowners build wealth through home appreciation and paying down their mortgage.
- Limited Personalization: Many rental agreements restrict renovations or even minor modifications. If you want to change the color of a wall, install smart home features, or upgrade appliances, you may be out of luck.
The 5-Year Wealth Comparison: Renting vs. Buying in Colorado Springs
To understand the financial impact of renting versus buying over five years, let’s break it down:
Scenario 1: Renting
- Monthly rent: $2,200
- Annual rent increase: 3%
- Total rent paid over 5 years: $138,000
- Equity built: $0
- Moving Costs: If you change rentals multiple times, moving expenses and deposits add up.
Scenario 2: Buying
- Monthly mortgage payment: $2,800
- Equity built over 5 years: $50,000 (this includes the portion of the loan you’ve paid down)
- Home appreciation: If home values increase 3% per year, your home could be worth $463,000 in five years, adding another $63,000 in appreciation.
- Total Potential Gain: $113,000
After five years, the renter has spent $138,000 with nothing to show for it, while the homeowner has built over $113,000 in equity and appreciation.
Should You Rent or Buy? Key Questions to Ask
The decision to rent or buy depends on your personal circumstances. Here are a few questions to help you decide:
You Should Buy If…
✅ You plan to stay in the home for at least 5 years
✅ You can afford monthly mortgage payments and maintenance costs
✅ You want to build equity and long-term wealth
✅ You have a stable job and income
✅ You are ready to handle the responsibilities of homeownership
You Should Rent If…
✅ You’re unsure how long you’ll stay in Colorado Springs
✅ You don’t have enough savings for a down payment or emergency repairs
✅ You prefer flexibility and don’t want to deal with maintenance responsibilities
✅ You want the ability to move easily for work or lifestyle changes
Common Mistakes When Deciding to Rent or Buy
Before making your decision, avoid these common mistakes:
❌ Only considering the monthly payment. Homeownership comes with additional costs, but also financial benefits.
❌ Not considering long-term financial stability. Will buying give you stability and help build wealth over time?
❌ Ignoring the flexibility of renting. If you anticipate needing to move in the next few years, renting might be the better option.
❌ Underestimating maintenance costs. Homeownership requires a financial cushion for unexpected repairs and upkeep.
Final Verdict: Is It Cheaper to Rent or Buy?
If you’re only looking at short-term costs, renting usually wins since it’s cheaper on a month-to-month basis. However, if you’re planning to stay in Colorado Springs for the long haul, buying a home helps you build equity and wealth over time—making it the more financially sound decision.
What do you think? Are you planning to rent or buy in the next year? Let us know in the comments! And if you found this helpful, be sure to subscribe to our YouTube channel for more home buying tips!
By carefully weighing the pros and cons of Renting vs. Buying in Colorado Springs, you can make the best financial choice for your future.
About The Author
The team at My Front Range Living are a group of full time real estate experts serving Colorado Springs, El Paso County and the surrounding areas. Their knowledge of the local community and experience in the industry provide you incomparable value when buying or selling a home. With several years of experience in helping out of state buyers and sellers, they are the go-to team when it comes to relocating and helping Colorado feel like home.
Even if you’re looking for an agent in another city or state, the My Front Range Living team has a network of experts that can connect you with the right professional.
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