“Renting is throwing money away” is the most repeated and least examined sentence in real estate. Sometimes it is true. Often it is not. The answer depends on one number more than any other: how long you will stay.

A worked example

Take a $650,000 home in Denver, 20% down, a 30-year mortgage at 6.2%. The monthly payment is about $3,190. Add taxes, insurance and maintenance and the real monthly cost is closer to $4,300. A comparable rental is $3,100.

Over five years the buyer pays roughly $72,000 more than the renter — but builds about $55,000 of equity through principal payments, and, if prices grow 3% a year, another $103,000 of appreciation. Net, the buyer is ahead by about $86,000 before selling costs, and about $45,000 after them.

The break-even

In this example the break-even point is a little under three years. Stay longer and buying wins clearly. Move in two years and renting was the better decision, even with rising rents.

What changes the answer

• Job certainty and how likely you are to relocate
• Your down payment and the return you could earn on it elsewhere
• Local price growth — flat markets shift the break-even to five years or more
• How much you value stability, a garden, or not asking permission to paint

Marcus and Sofia both run these numbers with clients every week. Bring your real figures and we will give you a straight answer, whichever way it goes.