Quiz: Is Renting or Buying the Right Move For You?

If you’re trying to decide whether to rent or buy your next home, you need to consider several factors, including the real estate market where you want to live, your financial standing, your lifestyle and your financial goals. These factors all help determine which option is better for you.

To make this major life decision a little easier, GOBankingRates came up with 10 questions that can help you figure out whether renting or buying is your best choice.

Click through to take the quiz, and find out if it’s better for your wallet to own or rent.

a) Rent

b) Buy

c) It depends

What should you do if you live in an area with a hot real estate market? Click through to find out.

It might be best to rent cheaply while you save money for a down payment. Although homeownership can make you immune to rent price hikes, make sure the numbers work for you.

If you buy a home, you also need enough money to cover taxes and insurance, plus have extra funds set aside for maintenance, upgrades and repairs. If you rent a home, you likely will be required to pay a security deposit and the last month’s rent up front, plus you might want to purchase renters’ insurance.

a) Rent

b) Buy

c) It depends

A credit score of 579 or below is considered a very poor credit score. Click through to find out what you should do if your score falls into that range.

Your credit score affects your ability to qualify for a mortgage and get the best rate possible. If you have a low credit score, consider renting until you can repair and boost your credit.

a) Rent

b) Buy

c) It depends

Not sure where life will take you in the next few years? Click through to find out if you should rent or buy a house where you currently live.

It’s important to think about your lifestyle in addition to financial factors. If you’re looking for flexibility and want to avoid a long-term commitment, renting might be the best choice.

“Renting usually makes sense unless you are pretty sure you will stay in one home for at least five years,” Daniel Mahoney, certified financial planner and president of Atlanta-based financial advice firm True Square Financial, previously told GOBankingRates. “This is because there are several thousand dollars of transaction costs that come with buying, financing and, eventually, selling a home.”

a) Rent

b) Buy

c) It depends

Deciding whether to rent or buy in retirement is a major life decision. Click through to determine your best option.

Before deciding if you should rent or buy in retirement, consider when you plan to retire, how you will finance either option, how long you plan on staying in your new home and what the trend is for the cost of living in your neighborhood.

If you own a home, rising home values might work to your advantage if you plan to sell later. If you are a renter, your rent could increase as your area becomes more desirable.

However, owning a home comes with more financial responsibilities, such as paying for your own maintenance and repairs. There are pros and cons to both options that you’ll need to weigh before deciding.

a) Rent

b) Buy

c) It depends

In most states, it’s more expensive to rent a home than to buy one. However, in Alabama, California, South Carolina, Virginia, Washington and Wyoming, it costs about the same. So what should you do if your monthly rent would equal your monthly mortgage? Keep reading to find out.

If it costs the same to rent or buy in your state, it’s no longer a financial decision — it’s a lifestyle choice.

If you plan on staying in the same place for a few years and want to ensure that your monthly payments will remain stable, it might be best to buy. If you want more flexibility and don’t want or can’t afford to pay for maintenance, repair costs and property taxes, it’s probably better to rent.

a) Rent

b) Buy

c) It depends

If you’re looking for a safe investment with a high return — and want to see those returns fast — should you rent while exploring non-real estate investment options? Or, is it worth it to buy a home as an investment property? Click through to find out.

Many people view their home as an investment, but it’s not a sure thing that your home will have increased in value at the point you want to sell it. That’s especially true if you plan to sell your home less than five years after purchasing it, according to U.S. News & World Report.

For a better return on investment, consider meeting with a financial adviser about the best ways to build a profitable portfolio before sinking money into a house.

a) Rent

b) Buy

c) It depends

Are you someone who doesn’t deal well with stress? Click through to find out the best option to preserve your mental health.

Homeownership can be a major cause of financial stress every step of the way, from the buying process to making mortgage payments to paying for renovations and unforeseen maintenance costs, to finally reselling the home. All of those stressors can be avoided if you rent instead of buy. So if you get stressed out easily, you might want to rent.

a) Rent

b) Buy

c) It depends

From adding a fresh coat of paint to doing a major remodel, there are lots of ways you can make your home feel like it’s uniquely yours. If you want to customize your home to your liking, click through to find out if renting versus buying a home is the better option.

If you want the freedom to make whatever changes or improvements you desire, it’s best to buy your home. Most lease agreements prevent you from making major changes that could help you to fully personalize your living space.

a) Rent

b) Buy

c) It depends

Click through to find out which option is better for your long-term financial goals.

If you’re concerned about building equity while getting tax credits, then owning might be a better bet. Although it’s not a sure thing that you will be able to build equity once you own a home, it certainly is possible. If your home appreciates more than you’ve paid in mortgage, interest, taxes and maintenance over time, then you’ve earned a return or have broken even. And during that time, tax credits can help offset some of the costs of being a homeowner.

a) Rent

b) Buy

c) It depends

It’s a good idea to have $10,000 or more in an emergency fund to be prepared for the financially unexpected. But if your savings fall short of that, click through to find out your best housing option.

Owning a home can come with unforeseen costs, so if you don’t have an emergency fund that could cover these costs, it’s better to rent.

According to Freddie Mac, it’s best to have your finances in order before you purchase a home. This means you should have a reliable income, good credit and documentation to verify your savings; the ability to put at least 3 percent toward the down payment and closing costs; have extra money for maintenance and home improvement projects; and have a cash reserve that can cover expenses in the event of job loss, illness or another financial setback.

Click through for tips to build your emergency savings in time to buy a home.