1. MAP4C – Personal Finance Unit
OWNING VS. RENTING

2. COSTS OF OWNING A HOME Cash for a down payment + mortgage payments
Property taxes
Home insurance
Condo owners—condo fees
Utilities, maintenance and services

3. COSTS OF RENTING The tenant pays the landlord RENT
Possibly utilities such as water, heat, electricity and parking
Services such as phone, cable and internet
Tenant insurance for contents

4. Case study 1
Aziza works full time. Her husband Hassan is a student with a part-time job.
They rent a 2-bedroom loft apartment
They pay $975 a month in rent
The rent includes heat, water, electricity, parking, laundry, and cable TV.
They have a phone plan that includes unlimited calling within Canada and the US and 400 min. of overseas calling for $59.95/month.
They do not have a lease, and pay rent month to month.

5. Case study 2
The Martins are a retired couple with no children living at home. They own a 2-bedroom condo.
Their mortgage payments are $981.72/month
The pat condo fees of $540 per month. These fees include heat, electricity, water, and maintenance.
They pay $ in insure their condo each year.
Their property taxes are $ a year.
They have a cable/phone/internet bundle that costs $99/month

6. Case study 3
Tom and Hyo-Jin are a working couple with a 5-year-old child. They own a 3-bedroom detached home.
Their mortgage payments are $ /month
They pay $ twice a year for home insurance.
Their property taxes are $ a year
They pay for water, sewer, and electricity every two months. The bills for the last year were: $210.23, $199.51, , $188.76, $213.75, $193.69
Their home is heated by natural gas. Their bills for all of last year totalled to $893.89
They rent a water heater for $52.95 EVERY 3 MONTHS.
They Have a phone plan that includes unlimited calling within Canada and the US and costs $49.95/month

7. Think about each case study
What are the different housing needs in each situation?
Were the costs of buying or renting more/less than you thought?
Do you think you will buy or rent your first home?

8. ANNUAL COSTS – Costs per year
In order to create a budget and plan financially, it is good to look at the total costs in a year.
Example:
Determine the annual expense of a monthly rent of $665
Determine the annual expense of Bi-weekly mortgage payments of $856.21
Determine the annual expense of semi-annual home insurance payments of $546.75

9. TENANT RIGHTS Your rental home must be safe and in good repair.
You must have access to services such as heat, hot and cold water, electricity, and fuel.
You have a right to privacy, though the landlord can enter the home for repairs, to show it to prospective tenants or in an emergency
Your landlord can raise the rent once every 12 months and must give you 90 days written notice of the increase.

10. TENANT RESPONSIBILITIES
You must pay your rent on time
You must keep the home reasonably clean
You are responsible for repairing any damage you cause to the unit.
If you sign a lease agreeing to rent the property for a specified period of time, you must honour the lease and give 60 days notice before the end of the lease if you do not intend to renew
If you have a month-to-month rental, you must give 60 days written notice before moving out.

11. Adisa is moving to Sarnia to attend college.
Option 1
One bedroom apartment within walking distance from the college
Rent: $625 a month, including heat, electricity, water and parking.
Must sign a 1-year lease
Option 2
College residence
Share a room and washroom with another student
Room includes: beds, desks, shelves, a small fridge, a microwave, cable service (but no TV), and local telephone service
Shared kitchen available
Cost: $6800 for September to April, including utilities and an $1800 meal card.

12. Which housing option would be the better choice?
Give reasons for your answers. Show clear calculations of the statements that you make. Think: What are the annual expenses? Which is least expensive? What are the additional costs for each? What are the benefits of each?

13. Homework:
p. 484 #1-9, 11, 12