Chapter 7 Housing Finances Personal Finance Chapter 7 Housing Finances

Objective Evaluate housing alternatives

Question What things do you consider when deciding on housing? What Opportunity Costs are there to consider?

Your Lifestyle and Choice of Housing

Renting versus Buying Renting Buying Good for young adults Good for people who like mobility Good for people who don’t want to spend money and time on maintenance Good for people with a limited budget Good for people who want stability Good for people who enjoy privacy Tax benefits Pride of ownership

Handyman’s Special A home that is priced lower because it needs repairs and improvements

Lifestyle The way a person chooses to spend his or her time & money

Mobility The ability to move easily from place to place

Renting an Apartment Advantages: Mobility, low maintenance and responsibility, low financial commitment Disadvantages: No tax advantages, limitations on activities, less privacy

Renting a House Advantages: Easy to move Low maintenance More space Disadvantages: Some limitations No tax advantages

Owning a House Advantages: Pride of ownership Plenty of space Tax benefits Disadvantages: Financial Commitment High living expenses Limited mobility

Owning a Condo Advantages: Pride of ownership Fewer maintenance costs Tax benefits Access to recreation Disadvantages: Financial Commitment Less privacy Get along with others Typically smaller Hard to sell

Renting Your Residence Tenant: The person who pays for the right to live in a residence owned by someone else Landlord: The person who owns the property What do you look for when deciding to rent?

Lease A legal document that defines the conditions of a rental agreement between a tenant & a landlord

Sublet To have a person other than the original tenant take over a rental unit & payment for the remaining term of the lease

Costs of Renting What impacts price? Location and size Biggest expense: Rent and utilities Security Deposit: amount of money paid to the owner go guard against financial loss that the tenant might cause. Usually 1 or 2 months rent Renter’s Insurance: covers the loss of tenant’s property as a result of damage or theft

Ticket Out What type of housing would you prefer to have and why? Would you want to live in a urban or suburban setting?

Apartment Search Activity Complete Apartment Search Activity sheet distributed to you Complete ALL aspects outlined on sheet REMEMBER: Counts as a QUIZ grade