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I Ran the Math on Renting vs. Buying the Exact Same Denver Condo
Using a $390,000 Denver condo at current rates, we see owning costs more than renting the same unit over five years, mostly because of HOA dues, PMI, little condo appreciation, and roughly 7% in selling costs at the exit. Owning starts winning when you extend the timeline and with a longer duration of appreciation. The variable that decides it isn't the market. It's how long you stay.
Everyone will tell you renting is throwing money away. Then Ramit Sethi tells you buying is often the worse financial deal. Both camps talk pretty vaguely.
I wanted an answer, so I built the spreadsheet on one specific property: a Denver condo at the current condo median, which sits around $391,750, down about 2% year over year while detached homes held near a $675,000 median.
Same unit. One version you buy. One version you rent. Five years. Here's my work.
The buying scenario
Price: $390,000
Down payment: 5% = $19,500
Loan: $370,500 at 6.65%, 30-year fixed
Closing costs: 2.5% = ~ $9,750
Cash to close: ~ $29,250
Monthly:
Line item | Amount |
Principal & interest | $2,379 |
Property taxes | ~$165 |
HOA dues | $475 |
Condo insurance (HO-6) | ~$50 |
PMI (5% down) | ~$154 |
Total | ~$3,223 |
Colorado condo HOA dues average around $475/month statewide, versus roughly $220 for single-family, and dues have been climbing nationally at 5–8% a year on insurance and underfunded reserves. That's a payment line that grows and can depreciate the value of your condo.
The taxes look low because they are: Colorado's residential assessment rate runs around 6.7–6.95%, so a $390,000 condo generates roughly $2,000 a year at a typical mill levy. That's a little Colorado advantage.
The renting scenario
Renting that same condo runs about $2,300/month, plus $15 for renters insurance. Call it $2,315.
Worth noting how soft the Denver rental market is right now: metro rents have fallen for two years as tens of thousands of new apartments came online, with concessions hitting record levels, one to three months free on new leases at a lot of buildings. Renters have leverage at the moment.
The monthly gap: about $908.
Five years out
If you buy and condo prices stay flat ( given they've been slightly negative):
Total paid over 60 months:
$193,400, plus $29,250 up front =$222,600Principal paid down: ~$23,100 — your balance drops to about $347,400
Sell at $390,000, minus roughly 7% in commissions, title, and transfer costs (~$27,300)
Net back to you: about $15,300
Net five-year cost of owning: roughly $207,300
If you rent the same unit with 3% annual increases:
Total rent over five years: about $147,500
You also invested the $29,250 you didn't put down, plus the monthly difference $908, in a boring index fund at an assumed 7%
That portfolio lands somewhere around $94,700, of which roughly $20,500 is growth
Net five-year cost of renting: roughly $127,000
Renting wins by about $80,000 over five years in this scenario.
I did not expect the gap to be that wide, but look at where it comes from: $475/month in HOA you can't build equity in, $154/month in PMI that buys you nothing, zero appreciation, and 7% seller fees on the way out.
Now change one variable
Run it again with 3% annual appreciation instead of flat:
The condo is worth about $452,000 at year five
Net proceeds after payoff and selling costs: about $73,000
Net five-year cost of owning drops to roughly $149,600
The $80,000 gap collapses to about $22,000. Extend to eight or ten years and the lines cross, because selling costs get amortized over more time, principal paydown accelerates, PMI eventually drops off, and your payment stays fixed while rent doesn't.
That's the finding. It's not "renting wins" or "buying wins." It's that the break even is measured in years, and buying with a short horizon in a soft condo market is where the math gets sickening.
What this means for you specifically
Rent if: you might move within three or four years, your career or relationships aren't settled, or the only thing you can afford is a high-HOA condo in a building whose reserve study you haven't read.
Buy if: you're confident about five or more years in one place, you have reserves after closing, and you're buying something where the HOA isn't eating a fifth of your payment.
If you're buying a condo specifically: the reserve study and the last year of HOA minutes matter more than the location. Special assessments in Denver buildings can run into five figures per unit, and they don't care about your financial position.
Conclusion
The answer is that at current Denver condo prices, current rates, and a five-year horizon, renting the same unit and investing the difference often comes out ahead. That's not a knock on homeownership, it's a knock on short homeownership with high ownership fees.
This is also why I won't tell you buying is the right move. Sometimes the numbers say wait. When they do, I'd rather you hear it from me than find out on the couch in your living room.
Run your own spreadsheet. Change the hold period, the HOA, the appreciation assumption, the rent. That's the whole exercise. not finding the right answer, but finding your answer.
If you want me to build this spreadsheet for a specific property you're looking at, that's one of my specialties. Grab the First-Time Home Buying Guide or join the newsletter. I've also written about the broader rent-vs-buy question and where the starter-home math still works.
This is for educational purposes only and should not be considered financial, legal, or tax advice. All figures are illustrative estimates based on assumed rates, appreciation, and investment returns; actual results will differ. Nothing here is a prediction of future home values or market returns. Talk with a licensed lender, tax professional, and financial advisor before making a decision.
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