Do you want to know if you should buy or rent a house? This real estate quiz reveals the answer with a financial comparison based on 20 pros and cons.
Renting vs. Buying House Quiz Explained
With its 20 real estate questions, the renting vs. buying house quiz determines if you should purchase or lease a household.
Due to property taxes, inflation rates, and opportunity costs, choosing between a rental or acquisition contract confuses house seekers.
But the quiz compares both options for you, pinning down the best choice.
By the way, people who like this quiz also enjoy “Should I Buy or Lease a Car Test.”
Should You Buy or Rent a House?
If the unrecoverable costs of purchasing real estate outweigh the overall rental fees, you should rent a house instead of buying. But if the long-term real estate appreciation rate is positive, buying a house is a better option.
Are More Americans Buying or Renting Houses?
In recent years, first-time homeowners have increased by 3%. In contrast, the number of tenants has only climbed by 2.3%. So, more people prefer purchasing over a lease.
According to Statista, 65.8% of Americans own a home as of 2022. And 34% of the total U.S. households are rented.
How to Calculate if Buying a House Is Better Than Renting It?
Take the value of the house you want to purchase, multiply it by 5%, and divide it by 12. If the outcome is equal to or less than the rent, buying the house is a better option. But if it’s higher, renting is more profitable.
You can also use this free online tool to compare the prices.
What Are the Pros and Cons of Buying a House vs. Renting It?
Buying a house is a profitable long-term investment. Considering the positive appreciation rates and tax savings, owning a household has a higher return on investment over a decade.
But renting a house is a short-term investment. It’s cheaper and more flexible, allowing the tenant to value their financial resources in different markets—in the stock market, for example.
The downside of homeownership is uncoverable and hidden costs, such as mortgage interest, cost of capital, or cost of equity.
As for renting a house, the downsides are increasing fees, lack of contract security, and delayed gratification (postponed mortgage or cash purchase.)
Suggested Quiz: Should I Move Out of My Parent’s House?
What to Consider When Acquiring or Renting Real Estate?
It’s crucial to consider the right factors when comparing buying with renting a house.
Unlike biased views, renting is not always money down the drain. In some instances, it’s mortgage payment that might waste your financial resources.
Here’s what to weigh up before locking in your decision.
Unrecoverable costs
Costs you pay with no associated residual value are unrecoverable. Two examples are property taxes or mortgage interest.
Property taxes
Tax-wise, owning a house in the US costs about $3,719 on average.
Inflation rates
The average inflation rate affects the decision to buy or rent a house. If inflation is high, getting a house with a mortgage is a mistake.
Real estate appreciation rate
Over time, the price of real estate changes. If you predict a positive change, buying a house is better than renting it.
Opportunity cost
Investing your money in acquiring a household is a missed opportunity in another market. (You could use that money to buy, say, stocks.)
If purchasing a house takes other profitable opportunities away, you are better off without it. Renting, in that case, is a wiser choice.
Psychological aspects
Buying vs. renting a house should not be an all-financial decision. Your lifestyle should be a key factor, too.
Similar Quiz: Should I Move in with My Boyfriend?
Take the Quiz for a Quick Customized Comparison
Are you still wondering, “Should I buy or rent a house?” If yes, take our real estate quiz to compare both options in detail.
The buying vs. renting house quiz analyzes your budget, career, plans, and desires to determine the right choice.
How to Play?
Playing personality quizzes is straightforward: Choose the option that’s true about you—or you relate to—and select “Next.” Unlike trivia quizzes, personality tests have no right or wrong answers. But the questions are in forced-choice format. The point is to push you to choose an option that makes the most sense, not the one that’s 100% true. For the most accurate results, don’t overthink your responses. Go with options that you “feel” are the best.
Questions of the quiz
- 1What’s a reasonable interest rate for a mortgage?
1.2%
1.9%
2.5%
3-5%
- 2How much monthly mortgage payment can you afford?
$1,000 or less
$2,000
$3,000
$4,000 or more
- 3What’s a reasonable price for renting an average house?
$1,000 or less
About $2,000
$2,500
$3,000
- 4What’s your salary like?
$5,000 or less
About $8,000
About $10,000
$11,000 or more
- 5Do you currently have any of these debts?
Student loan debt
Auto loan debt
Credit card debt
No
- 6What’s your credit score?
580 or below
650-700
705-800
850 or above
- 7How much is your annual profit? (After taxes and fees.)
$50,000 or less
$60,000-$90,000
$100,000-$150,000
$200,000 or more
- 8How much can you save per month?
$300 or less
$500
$1,000-$2,000
$3,000 or more
- 9How much money do you have in cash (in your bank account)?
$0-$1,000
$2,000-$10,000
$11,000-$20,000
$25,000 or more
- 10Have you invested in any other markets?
No
Yes, but it’s a minor investment. ($1,000 or less.)
Yes, I have at least $5,000 invested in other markets.
Yes, I have over $50,000 invested in other markets.
- 11How much tax wedge do you pay?
$20,000 or less
About $25,000
About $30,000
$35,000 or more
- 12How much are you willing to spend on renovating/maintaining a house?
$500 or less
$1,000-$3,000
Up to $10,000
$15,000 or more
- 13How would owning a household change your life?
It’d help me settle down.
It’d help me save money.
It’d help me advance my career.
It’d increase my income.
- 14Which one is currently your priority?
School
Career
Marriage/Family
Investment
- 15Do you already own a property?
No
I’m a tenant
I recently sold my house
Yes
- 16Where do you live?
Dorm, boardinghouse, or flophouse
I live with my parents (or my partner)
I live in a rental house
I live in my own house
- 17How much equity do you own?
$0-$500
$600-$1,000
$2,000-$10,000
$15,000 or more
- 18Do you own a car?
No
Yes, but it’s a lease
Yes, only one.
Yes, more than one.
- 19How much down payment can you afford?
10% or less
15-20%
Up to 30%
35% or more
- 20Final question: How old are you?
18 or younger
19-25
26-35
36 or older
