1. a Home ? 10.1 Housing Alternatives .
Renting or Buying
a Home ?
10.1 Housing Alternatives .

2. Renting or Owning a Home
Advantages and Disadvantages of Renting
Advantages and Disadvantages of Owning a Home
Calculate the costs of home ownership
Calculate the cost of renting a home or apartment
Compare the costs of renting vs. owning

3. When considering whether to buy a home or rent a place to live a list of the advantages and disadvantages is one way to make an informed decision.

4. Buy or Rent? Advantages of Renting Disadvantages of Renting
No Down Payment –You can earn interest on the money you would have used for a down payment.
More Predictable housing Costs – No responsibility for repair and upkeep beyond normal cleaning.
Mobility-You can move whenever you want to after giving the required notice
No ownership-Your monthly payments do not give you ownership of anything.
Rent Increases-Over time, you can expect the cost to rent the same place will increase.
Restrictions-The property owner sets the rules for what you can do in and to your living space.
No tax deduction – Rent payments are not deductible on federal income tax.

5. Buy or Rent? Advantages of Buying Disadvantages of Buy
Ownership –Monthly payments lead to ownership
Potential value- Some dwelling will increase in value over time.
Tax deduction-Money paid in interest and property taxes can decrease your taxes.
Fewer restrictions-Since you own the property, you can do what you want on your property within the law.
Down payment and closing costs- You need money up front to obtain a mortgage.
Property taxes-Taxes add to the cost of owning a home.
Restricted mobility-You may have to sell the house to relocate, and there are no assurance that the value of your home when purchased.
More responsibility-You must handle all maintenance and repairs.

6. Cost of Home Ownership Costs of Home Ownership
The Hansen's want to buy a home in Broken Arrow, OK.
Mortgage Interest first year $5,244
Annual property taxes $2,350
Annual home owners insurance policy $360
Home will depreciate $1,240 the first year
Estimate Utilities for a year $1,270
Estimate Maintenance and repairs for a year $1,535
Lose $1,270 interest on their down payment.
Estimate will save $1,428 in income tax
What will be the net cost of owning the home in the first year for the Hansen's?

7. Costs of Property Rental Costs of Property Rental
Mary Beth plans to rent an downtown Tulsa Apt.
Monthly rent $710.
Security deposit one months rent $710.
Annual rental insurance policy $110.
Estimate Utilities for a year $600.
Annual Covered parking rate $240.
What is Mary Beth’s first – years cost of renting the apt?

8. Cost of Property Rental
Compare the cost of renting or home ownership Compare Renting and Owning Homes Cindy has $17,000 she can use as a down payment on a house that sells for $85, For the first year, is it less expensive for Cindy to buy or rent a home and what is the difference?
Cost of Home Ownership
Cost of Property Rental
Mortgage Interest first year $5184.
Annual property taxes $1,720
Home Owner Property Insurance $ 595
Estimate costs of ownership $3,270.
Lose $680 interest on down payment.
Estimate will save $895 in income tax
What is Cindy’s cost of owning a home the first year
Monthly rent $850.
Security deposit one months rent $1200.
Annual rental insurance policy $150.
Estimate Utilities for a year $1,400.
What is Cindy’s first – years cost of renting the apt?

9. Maintenance and Repairs $1,800
Student Module 10.1 Activity Compare Renting and Owning Homes Pat just received a big promotion at Williams Company in Tulsa, OK. She has been living with you Mother and Aunt. She is looking to buy a home or an apartment. For the first year, is it less expensive for Pat to buy or rent an apartment?
Cost of Home Ownership
Cost of Property Rental
Mortgage Interest first year $6800.
Annual property taxes $1,585
Home Owner Property Insurance $ 595
Estimate:
Depreciation $1098
Maintenance and Repairs $1,800
Utilities $1,250
Lose $971. interest on down payment.
Estimate will save $1,847 in income tax
What is Pat’s cost of owning a home the first year
Monthly rent $970.
Security deposit one months rent $970.
Annual rental insurance policy $150.
Estimate Utilities for a year $1,050.
What is Pat’s first – years cost of renting the apt?

10. Excel and word files 10.1 Costs of Home Ownership Costs of Property Rental Compare Renting and Owning Homes Excel Spreadsheet solution Student Module 10.1 Teacher’s Guide 10.1 Student Module – Activity 10.1 References