Renting vs. Owning: The Showdown

For many people, buying a home might seem out of reach. The prospect of owning your own home can look daunting, especially if you’ve been renting for a long time. But what do the numbers actually look like when comparing renting vs. owning?

At Bison State Bank, we do our best to make buying a home as simple and cost-effective as possible. It’s not some pie-in-the-sky dream to own your own home, and in some cases, it might benefit your wallet more to own instead of renting long-term. 

To learn more about the renting vs. buying battle, keep reading or reach out to one of our experienced loan officers. 

Tale of the tape

Let’s take a look at some of the advantages and disadvantages of renting and buying a home. 


There are definitely advantages to renting. For starters, typically the landlord will handle any major work done in the home, so you don’t have to worry about scheduling services. It also provides more flexibility, as you can just move to a new place once you complete your lease. You’re not tied down to your home for a long period of time. Other advantages of renting include:

  • Less worry about decreased property value
  • No real estate tax
  • No large down payment up front
  • Fixed rent amount for the length of your lease
  • Lower insurance costs

The advantages of renting a home are also a double-edged sword. While your lease does guarantee a certain rent over a period of time, nothing stops your landlord from raising that rent when the lease is up. Your landlord also might not want to rent out their space again at the end of your lease, so you could find yourself looking for a new place to live when you’re not ready. 

When you pay your rent, you’re essentially paying your landlord’s mortgage. This helps your landlord’s equity, but it does nothing for your own. Renting also allows little flexibility with what you can do with your home. Even for little things like painting a room, many landlords require checking with them before changing anything in the home. Other disadvantages include:

  • No tax benefits
  • Limits on pet ownership
  • Bound by the rules of your lease
  • No ownership of your space
  • No equity


When it comes to advantages for owning a home, it all hinges on the fact that you actually own your property. With your ownership comes equity, giving you more purchasing power in the future. Ownership also allows you to make decisions on your home without consulting a landlord. If you want to paint a wall, paint the wall. If you want to install a fence or put in a pool, you are free to do so in most cases. 

Being a homeowner also gives you a greater sense of community. Owning a home in a neighborhood makes you invest in the neighborhood around you, if only to raise the value of your home for the future. What happens in your community directly affects you and your home’s value, so you’re more likely to take a greater interest in your surroundings. 

If you’ve improved your home’s value, you should see a return on your investment when you’re ready to sell. That way, you can upgrade to another house, or enjoy the return on your investment in other ways. 

There’s also something to be said for owning your own space. Your backyard is yours, and you don’t have to worry about a fellow tenant making noise or your landlord stopping by at inconvenient times. You can own as many pets as you like without having to pay pet rent fees or deposits. Home ownership allows you to plant your own flag in the ground. 

Fixed mortgage rates also provide an advantage to homeowners. With low mortgage rates prevalent across the country, it’s good to get locked into a mortgage now. That way, over the life of the mortgage, the only change in your monthly housing expenses will be for property taxes and insurance.

Why now is the right time to buy

As far as disadvantages go, that also comes back to property ownership. When something goes wrong, there is no landlord to take care of it on the spot. You are in-charge of hiring out plumbers, electricians, or other skilled workers to take care of projects, or you have to do them on your own. 

Buying a house also requires some savings up front. While there are many mortgage options that don’t require a 20% down payment, most still require at least 3.5% down at closing. There are also other closing costs, like the cost of an inspection and an appraisal you will have at closing.

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Owning a home also isn’t as flexible as renting. When you own, you are much more stable but also tied to the house, so you typically have to sell before moving to a new place. 

Head to head comparison

Now that you know some of the pros and cons of renting and owning, let’s take a look at some direct comparisons of the two options.  


When looking at cost comparisons between home ownership and renting, it all comes down to long-term vs short-term investment. In the short term, renting can be cheaper. If you find an affordable rent, then your lease might be cheaper than paying a mortgage along with property taxes and insurance. However, that rent is far from guaranteed to stay the same, and you run the risk of needing to move before you’re ready because of rising rent costs. 

In the long term, owning a home is considered more cost effective because you are investing in your own equity. The more money you pay into your mortgage, the more equity you build. And if you work on aspects of your home to increase its value, you increase your own equity as well. 

Check out our Rent vs Own calculator


Equity in your home is the difference between what you owe on it and the amount your home is actually worth. You can use this equity when selling your home to upgrade to a newer, more expensive home, or you can use it to make improvements on your current home. When renting, you aren’t building any equity. In fact, your rent payments are going directly to build up your landlord’s equity, rather than your own.


When owning your own home, you are free to make changes as you see fit. If you want to paint a room, bring home a new pet, or build a fence, you can do that without checking with someone else, in most cases. 

When renting, your freedom to make changes all depends on your landlord. Everything you do has to be run by someone else, so it may be difficult to make changes you would like to your home. 


When purchasing a home in a neighborhood, you’re not just investing in a property. You’re investing in the community around you. If property values in your neighborhood rise, your home’s value should rise as well. It’s in your best interest to invest in your community, not just because of personal gain, but also for a sense of community pride. When renting, you may not feel as tied to the community because the lease is temporary, so you may not be as invested in bettering your neighborhood.


Renting inherently comes with less responsibility. When a problem arises, renters can call their landlord to take care of the problem. That can be an advantage, but it also doesn’t encourage renters to have a sense of responsibility to their space. 

When you own a home, you have to address any issues that arise. This encourages you to keep your home in better condition and be more mindful of your actions. It also instills a sense of pride. When someone compliments your home, you can be proud knowing that compliment came as a direct result of your hard work. 

Watch the Owning vs. Renting video from the Bison State Bank team

Get the full renting vs owning breakdown from Bison State Bank

There’s a lot to consider when comparing renting vs buying, and it can seem like a lot to process at times. The good news is, Bison State Bank is here to help. We’re your first step to a better future. 

We offer a variety of tools and calculators to help you better understand the home-buying process, including our rent vs own calculator that can give you a direct comparison of both options. Our experienced loan officers are also standing by to assist you with any questions you may have about the home buying process. 

When thinking about buying a home, reach out to Bison State Bank so we can guide you through the process. Contact us today or get a free rate quote and become  better informed for your home buying journey. 

A special thank you to our Loan Officer, David Vaughan, for providing his expertise on this topic. 

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