Renting vs Buying a Home: Real Life Financial Literacy and Life Skills
- Grades
- Grades 8–12, Middle School, High School
- Pages
- 9
- File type
- Answer key
- Included
- Subject
- Life Studies, Special Resources, Finance, Home Economics, Math, Percentages, Decimals, Life Skills
- Topic
- renting, buying
- Resource types
- Activities
- Answer key
- Included
- Standards
- 7.RP.A.3
About this resource
What's inside this resource
Students compare the true cost of renting and buying the same town house in Willow Creek, a fictional US town where the home is listed at $238,500 for sale or $1,640 a month to rent. Using percents, they total the cash each path needs on move-in day, add up the monthly costs that never come back, and test three listings with a price-to-rent ratio.
The second half of the lesson turns to people. Four short life-situation cards ask students to choose rent or buy for a nurse on a two-year job, a family staying ten years, a recent graduate and a future food-truck owner, with one money reason and one life reason for each. A what-if page raises the rent and the down payment, and a personal My Plan checklist closes the lesson.
What's included
- A teacher cover page with learning goals, the math used, a page guide and suggested pacing over three class periods
- Seven student pages with 32 numbered questions and a hidden-costs checklist
- A one-page answer key with every calculation worked out
- Two versions: full color and print-friendly black and white
Grade level: grades 9-12 personal finance, life skills or consumer math. Students need to find a percent of a number, multiply, divide and round to the nearest dollar; a calculator helps.
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In the classroom
Teaching tips & learning objectives
Learning objectives
Define home-buying and renting terms such as principal, equity, closing costs and security deposit.
Calculate and compare the cash needed on move-in day to rent or buy the same home.
Total and compare the monthly costs of owning and renting that do not build equity.
Teaching tips
The cover page suggests pacing: pages 2-4 in the first class, pages 5-6 in the second, and pages 7-8 to finish.
Page 3 sets one rounding rule for the whole lesson (nearest dollar), so point it out before students start calculating.
Every decision card on page 7 uses the Birch Lane numbers from pages 3 and 4, so have students finish those pages first.
Skills covered
Percent of a price: students find a 10% down payment, 3% closing costs and a 1.4% yearly property tax on a $238,500 home.
Comparing totals: students add move-in and monthly costs for each path and state which costs more and by how much.
Reading a diagram: stacked bars split the same $1,287 payment into interest and principal in year 1 and year 20.
Good to know
Questions teachers ask about this resource
What math do students need for this lesson?
Finding a percent of a number, multiplying, dividing and rounding to the nearest dollar. The cover page notes that a calculator helps on pages 3-6 and 8.
Do students need internet access or real home listings?
No. Every listing and cost is set in the fictional town of Willow Creek, so the whole class works with the same numbers and answers can be checked against the key.
Is an answer key included?
Yes. Page 9 shows the calculation for each of the 32 questions, with model money and life reasons for the four decision cards.
Which versions come with it?
Two PDFs: one in full color and one in print-friendly black and white.
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Curriculum
Standards, concepts & topics
Standards
Standards
- 7.RP.A.3 — Use proportional relationships to solve multistep ratio and percent problems. Examples: simple interest, tax, markups and markdowns, gratuities and commissions, fees, percent increase and decrease, percent error.
Core concepts
Core concepts
Renting vs buying
Move-in costs
Mortgage principal and interest
Home equity
Price-to-rent ratio
Percent of a number
Topics
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