For most people, yes. Everyone needs a roof over their head, but rent pays your landlord’s mortgage and builds their wealth, not yours. The typical homeowner is worth almost 40 times what the typical renter is worth, and that gap starts with who owns the home.
We talk with Colorado families every week who feel stuck renting. Here’s what renting really costs, why owning builds wealth, and how to make your last lease your last one.
Key takeaways
- Rent builds someone else’s wealth. Every payment goes toward your landlord’s mortgage and equity, not yours.
- Homeowners are far wealthier. The typical homeowner’s net worth is about $400,000; the typical renter’s is about $10,400.
- Rent is rarely the only cost. Application fees, required insurance, amenity and admin fees, and move-out charges add up.
- Your first home isn’t your forever home. Most people work up to their dream home through one, two or three homes first.
- On-time rent helps you buy. Use your renting years to build credit and savings, then get out.
Why is renting a waste of money?
Because none of it comes back to you. Your rent covers your landlord’s mortgage, taxes and profit. When the home goes up in value, they keep the gain. When the loan gets paid down, they build the equity.
- You don’t build equity. Every dollar goes toward someone else’s investment.
- Rent usually rises. A fixed-rate mortgage payment stays the same for the life of the loan; rent can go up every lease.
- Fees eat into savings. Every extra charge is money that isn’t going toward your down payment.
Why does owning build more wealth than renting?
The numbers are stark. According to the Federal Reserve’s 2022 Survey of Consumer Finances, the typical (median) homeowner’s net worth was about $400,000, compared with $10,400 for the typical renter. That’s almost 40 times more.
Owning builds wealth in two ways at once. Every payment pays down your loan, so you own more of the home each month. And over time, home values have historically risen, so that equity can grow. That equity becomes the down payment for your next home, and the one after that, until you’re in your dream home.
What do you really pay for when you rent?
Your monthly rent is only part of the cost. Depending on the property, you may also pay for:
- Application and screening fees
- Required renters insurance
- Amenity fees, such as gym or parking
- Trash, pest control and admin fees
- Pet fees, pet rent or pet deposits
- Move-in and move-out charges
- Late fees
Colorado’s HB25-1090, in effect since January 1, 2026, now requires rental prices to be shown as a total that includes mandatory charges you can’t reasonably avoid. It also limits what landlords can add when they pass along utility and service bills: a markup or fee of up to 2% of the bill or up to $10 a month, but not both. That makes it easier to see the real price of renting and compare it with owning.
Can paying rent help you get a mortgage?
Yes. Paying a large monthly bill on time shows a lender you can handle a housing payment. If you pay $1,700 a month in rent without a late payment, that history supports your application.
There are two ways rent history can show up:
- On your credit report. Some landlords and rent-reporting services report payments to the credit bureaus. Ask before you sign a lease.
- In your bank statements. Some automated underwriting systems can consider 12 months of on-time rent payments from bank statement data, which can help first-time buyers with thin credit.
The flip side matters too. Late rent that gets reported can lower your scores and make approval harder.
How do you stop renting and start owning?
- Find out what you qualify for now. Many renters are closer than they think.
- Look at low-down-payment loans. FHA loans and some conventional loans need far less than 20% down.
- Compare your rent with a real payment. Principal, interest, taxes, insurance and any HOA, side by side with what you pay now.
- Don’t wait for your dream home. Your first home is the step that gets you there.
- Know what “help” really costs. If you’re looking at assistance programs, read what down payment assistance really costs first.
Ask them how they built their wealth
Renting is a scam. Change my mind. Everyone needs a roof over their head, but other than that, renting is a complete waste of your money. You give it to someone else to pay their mortgage and build their wealth, not yours.
The typical homeowner is worth almost 40 times (yes, 40 TIMES) what the typical renter is worth. That means if a renter’s net worth is about $10,000, the typical homeowner’s is about $400,000.
No one buys their dream home on the first shot. It takes one, two, three other homes to work up to your dream home. Next time someone tells you renting is better than owning, ask them how they built their wealth.
Bottom line: stop building your landlord’s wealth
Everyone needs a place to live, but rent is money you never see again. Owning puts your payment to work for you, and it’s how most families build real wealth. Next time someone tells you renting is better than owning, ask them how they built theirs. Blue Arrow Lending can show you how close you are to your first home.
Sources: Colorado Division of Real Estate: HB25-1090 summary · Median net worth of homeowners vs. renters (Federal Reserve Survey of Consumer Finances, 2022, via the Aspen Institute)
This article is general information, not legal advice.
Frequently Asked Questions
It can, if your landlord or a rent-reporting service reports your payments to the credit bureaus. Many don’t, so ask before signing a lease. Some mortgage underwriting systems can also consider on-time rent shown in your bank statements.
Colorado’s HB25-1090, effective January 1, 2026, requires total prices that include mandatory fees and limits markups on utility and service bills passed to tenants to 2% of the bill or $10 a month, but not both. Check the full law or a Colorado attorney for your specific lease.
Month to month, renting can look cheaper at first. But rent builds none of your wealth, and it usually rises over time, while a fixed-rate mortgage payment stays the same and every payment builds equity. The longer you stay, the more owning tends to win. Comparing your real numbers shows how soon.
Broker/Owner of Blue Arrow Lending with 13 years of experience originating mortgages. Jenn helps borrowers in Colorado, Florida, Texas, and Wyoming stop renting and start building wealth through homeownership.
This article is for general educational purposes only and is not a commitment to lend. Loan program requirements, down payment minimums, and mortgage insurance rules are general guidelines and are subject to change. All loans are subject to credit approval, underwriting, and property eligibility. Blue Arrow Lending, NMLS# 2046633. Jenn Moretti, NMLS# 573143. Licensed in Colorado, Florida, Texas, and Wyoming. Equal Housing Opportunity.