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Rent vs Buy in Ft Collins, CO: Which Is Right for You?

Fort Collins home values are pushed upward by the hot seller's markets just south of this funky college town. However, would-be buyers who want to live along Colorado's front range could maximize profits by purchasing in the currently cooled off housing market in this northern town.

Fort Collins home values are pushed upward by the hot seller's markets just south of this funky college town. However, would-be buyers who want to live along Colorado's front range could maximize profits by purchasing in the currently cooled off housing market in this northern town.

When deciding whether to rent or buy in Fort Collins, you may want to consider certain variables to ensure a profitable outcome. Timing, financial health, future plans and the Fort Collins housing market can be major factors when choosing between buying or renting. Fort Collins is about two hours from Denver, is home to Colorado State University, and has quick access to Colorado's Rocky Mountain range, making it an extremely desirable place to live.

Both rental and sales markets across the greater Fort Collins area benefit from Colorado's red-hot housing market. As desire to live in Colorado increases, so will Fort Collins' property values. The time to buy in this market is now.

Current Housing Market

Over the past year, Fort COllins home values grew by 5.2%. This type of growth is pretty common in areas throughout the Front Range, however, Fort Collins has entered a cooling off period. What was once a seller's market has not entered into common ground for both buyers and sellers.

The median home value is still high, sitting at $392,000, with the median home price expected to rise by 2.7% throughout 2019. Since 2010, home prices have almost doubled, meaning you could benefit from purchasing soon but might also be at risk of a burst bubble in the near future.

Homes are selling for a good deal less than owners are listing them for. The median asking price is $426,108 while the median sale price is $385,600. Listings sit for an average of 63 days, which is relatively short but they sell for way less than expected. Home buyers and owners know the area itself is valuable but Fort Collins may not have the industry yet to support higher home prices.

One- and two-bedroom home sales have seen the most growth in average cost of the past year, with two bedrooms growing in sales price by a whopping 14.5%. Three-bedroom units or homes saw a decline and four-bedroom homes only rose in value by 1.1%.

Current Rental Market

When comparing data on rental values, Fort Collins truly mirrors the college's population fluctuations. A variety of rentals dwellings are readily available throughout the late spring and early summer months. They begin to drop during fall semester and slowly see an uptick throughout spring semester.

Prices also reflect this trend. Rentals are cheaper in the middle of fall and begin to climb again as spring approaches, gearing up for the beginning of summer semester and the consistently cyclical student population. Potential renters who aren't bound by school schedules should consider signing a lease during the fall. Even though inventory is low, they would be more likely to lock in a lower rate.

The average rent for a 900 square foot space in a relatively average neighborhood will set renters back an average of $1,606 per month. The majority of condos or apartment buildings include trash and water, while some even include electric and heating, depending on the building's set up, which could end up saving you a bundle in the winter time.

Additional Costs of Homeownership

For many renters locked in a lease-to-lease cycle of throwing money towards someone else's equity, building your own through the purchase of a home sounds incredibly appealing. No more security deposits, no more fixing up a property that isn't yours only to move out within the next few years, and no more paying another person's mortgage. However, many aspiring buyers often forget additional costs associated with owning a home.

When purchasing a home, would-be buyers will have to fork over more than just a down payment and will definitely need to build additional costs into their monthly mortgage payment. Utilities, HOA fees, lawn care, waste pick up, and miscellaneous repairs can seriously add up. Average utilities excluding water and trash are around $144, with basic waste removal costing around $30 a month.

Timing is Everything

Often times, deciding whether to rent or buy often relies on where the potential homeowner is with life plans. Home values tend to increase overtime and usually, the longer one can sit on a property, the more one can usually make. If you've secured a career in Fort Collins or have plans to start a family, or simply desire to relocate and put down roots, buying a home will most likely be the better option.

Let's do a cost comparison between buying a $380,000 versus renting a $1,600 place. In three years and eight months, buying will become the cheaper option. After just four years, you will have $178,272 in equity but you will have also put in $209,945 into the home, including mortgage, taxes, and down payment.

Renting would only have set you back $96,076 over the course of 4 years. However, if you decided to invest the offset balance and the money you didn't spend on a downpayment, at a return rate of 6% for four years, you would have $21,973 in four years. The best financial decision truly depends on where you see your life headed over the next decade.

If you're ready to start house hunting in this lovely Front Range community, contact a Clever Partner Agent today. Local agents can help guide prospective buyers on timing, school zones, up-and-coming neighborhoods, amongst other things. Call today for a no-obligation consult.


Reuven Shechter

Reuven Shechter is the Outreach Coordinator at Clever Real Estate, the free online service that connects you with top real estate agents to help save on commission. He spreads the word about Clever, disseminating studies to journalists and developing relationships with media outlets. Reuven is passionate about investing in real estate and creating lasting success for families. His writing has been featured in Max Real Estate Exposure, Leverage Marketing, and more.

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