Renting vs. Buying a Home

Renting vs. Buying a Home

When deciding whether to continue renting or to buy your own home, there are many factors to consider. There are upsides and downsides to both renting and buying a home, as discussed below.



Most homeownership is prefaced by renting an apartment, condo, or home. This experience can help determine what you like and dislike about locations, floorplans, and amenities. 


  1. Lower initial cost. The initial cost typically includes a security deposit and first month’s rent. This amount is substantially lower than what is needed to purchase a home which would include a down payment, closing costs, etc. 
  2. Flexibility. With leases typically written on an annual or month to month basis, it allows flexibility while deciding where you want to live long-term. We often recommend this to clients who are moving to Durango so they have time to explore the area and settle on their ideal location. 
  3. Insurance. As home insurance rates continue to rise, especially in the state of Colorado, renter’s insurance has remained fairly consistent. Home insurance covers the physical structure while renter’s insurance only covers the renter’s belongings. The average annual rates for home insurance on an intown Colorado home are between $2500 - $5000, while renter’s insurance for the same property would be $200 - $300. 
  4. Repairs. Another benefit of renting is that large appliances (refrigerators, washer/dryers, etc.) as well as general repairs are the landlord’s responsibility. Of course, abnormal damages sustained by the renters is covered by the security deposit.


  1. Price Changes. Being at the mercy of your landlord’s pricing can be a difficult position. As the real estate market trends up, the rental market generally follows. Depending on the lease agreement, rates can change monthly or annually, sometimes with no set margins. 
  2. Unforeseen Changes. Ultimately, renters are subject to their landlord’s plans.  Unforeseen circumstances can put renters in a position where they need to move when they don’t want to and may not have another rental lined up. Apartment buildings provide more security because they will most likely remain in the rental market.
  3. Customization. While renting an apartment, condo, or home there is typically little room for customization. Although some landlords may be more open to allowing renters to paint walls or change out light fixtures, it’s typically expected that the property be kept in the same condition throughout the tenancy. Some may even limit the amount of nails used on the walls. 
  4. Furry Friends. If you have pets, that can limit your options because some landlords do not allow pets at all, or have pet restrictions.  There is often an extra pet security deposit required.



Owning your own home is a different story than renting because you are solely responsible for all components of the property (including the equity gain!). When considering a home purchase, getting pre-approved for a home loan (if necessary) and understanding your purchase power is important so you know where to begin your home search. There are additional costs to account for, along with inspections, property taxes, and home insurance which your RealtorⓇ will help guide you through. A buyer’s financial situation is a big factor into whether or when homeownership is attainable. 


  1. Equity & Credit. Building equity in your investment is one of the biggest perks of homeownership. Instead of cutting those monthly rent checks, your monthly mortgage payments go directly towards your financial benefit. In Southwest Colorado, we continuously track the real estate market month over month and year over year and see the trend of about a 4-6% appreciation rate, depending on the specific market. In addition, rather than being subject to a landlord’s rent increases, your payments remain mostly consistent throughout the life of the loan term - they may adjust if you have an escrow account set up to pay insurance premiums and property taxes. Additionally, making these payments on time will build your credit! 
  2. Tax Benefits.  Mortgage interest and property taxes may be deductible, be sure to ask your accountant how to best use this benefit.
  3. Ownership. Owning your home means it’s yours to do with what you want (subject to county, city, HOA, etc. rules and regulations, of course)! Design, updates, remodels and additions are all at your discretion. While some of these may be just for aesthetic reasons, others add value and you’ll see a return on your investment.

Based on an Urban Institute 2019 American Community Survey, homeowners spend 10% less on housing than renters. 


  1. Home Insurance. As previously mentioned, home insurance rates have increased due to natural disasters - such as wildfire in Colorado, high appreciation, and increasing construction costs. Please get in touch with our team if you are having challenges with insurance so we can help you get connected with the right people. 
  2. Initial Costs. The upfront fees to buy real estate are higher and include items such as the down payment, inspections, and closing costs. However, once those are paid during your purchase and at closing, you will then be actively building your home’s equity and personal net worth.
  3. Obligation. Investing in a home often goes hand in hand with investing in a long term future there however, as we all know, life changes. If you need to leave your home, you may decide to rent out your property as a long term or vacation rental depending on county, city, and HOA regulations, which can be very profitable. Some things to consider about owning a rental property are potential vacancies, repairs that come up, and property management - especially if you are not longer in the area.

Switching from renting to buying a home in Southwest Colorado can be a big change. The Durango Team would love to be a part of your time home buying experience. Please reach out to us with any questions.

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The Durango Team has decades of real estate experience in the Durango, Colorado area. Let us help you buy or sell your Southwest Colorado home.

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