1. Chapter 28 Notes

2. WHY RENT?WHY BUY?

4. Don’t forget that taxes, closing costs, fees, etc. will also be included! You will pay more than what you see here!

5. What is the difference from the previous results.

8.  What did you notice?  OH YEAH………Let me add in the closing costs and taxes (depends where you live).

9. Taxes for the year = roughly $2,000 (Add $150 per month to the monthly payment) Closing Costs = 3% (Included)

10. First 2 years - $700 per month. Last year - $600 per month. 3 year total - $24,000 Why Rent? Why Buy?

11.  You will need to take out a mortgage and the term of the loan is typically 15-30 years. The lender (bank) will pay the seller the total cost and you will repay the bank in monthly installments. Usually pay double or triple the actual cost of the house.  http://finance.yahoo.com/news/Can-I-Afford-a-House-Car-and- usnews-2256811527.html?x=0 http://finance.yahoo.com/news/Can-I-Afford-a-House-Car-and- usnews-2256811527.html?x=0  http://www.ehow.com/facts_5161084_much-income-should-pay- mortgage.html http://www.ehow.com/facts_5161084_much-income-should-pay- mortgage.html  How much to pay on costs associated with mortgage? Roughly 28% (this ranges depending what source you look at. No more than 10% of Gross income should go towards credit cards, car payment, etc).  You can get a loan of roughly 3X your annual salary. If the gross income of the household is $50,000, you can probably get up to $150,000 loan.

12.  Renting – the tenant (you) will pay a landlord to live at the apartment/house.  http://realestate.yahoo.com/promo/rents-could- rise-10-in-some-cities.html http://realestate.yahoo.com/promo/rents-could- rise-10-in-some-cities.html  http://homebuying.about.com/od/buyingahome/qt /BuyorRent.htm http://homebuying.about.com/od/buyingahome/qt /BuyorRent.htm  Lease – rental agreement. Contract between you and landlord.

13. Typically can’t raise rent during lease. But they can tell you that your rent will increase if you plan to sign a new lease. http://www.legislature.mi.g ov/documents/publication s/tenantlandlord.pdf

14.  Anyone who rents an apartment will have to fill out a lease application. They will look at your references, background, credit history, etc to make sure you can afford to pay them. (I paid $125)  http://www.youtube.com/watch?v=7O6wD--fiNA – What should I do? Buy or Rent? http://www.youtube.com/watch?v=7O6wD--fiNA  http://www.youtube.com/watch?v=tfw6CFI4oqU&feature=related http://www.youtube.com/watch?v=tfw6CFI4oqU&feature=related  http://money.cnn.com/2005/12/15/real_estate/4questions_rent_f ortune_122605/index.htm http://money.cnn.com/2005/12/15/real_estate/4questions_rent_f ortune_122605/index.htm  Most require a security deposit when you move in (If monthly rent is $700, you must pay a security deposit of $700 when you move in – you get this back assuming you did not damage your place).  Tenancy for years – most sign for 6 months or a year. Depends on your situation and what you need.

16.  In pairs, go through the lease terms! You need to show what the basic provisions are for each number on the sheet that I’ve provided for you.  Brochure, Construction paper booklet, etc.  Create a “What You Need to Know about Renting” Booklet/Brochure  Simplify the language  What would you want to know?  You have class time to work on this!  I will have each group share 1-2 lease terms from the handout  I do not have extra copies – PLEASE DON’T TAKE THEM WITH YOU!

17. 1. Will pay the rent at specified time – will be evicted if you don’t pay your rent. Usually pay at the beginning of the month. 2. Raising the rent – not common. Need to make sure that is not included. 3. Right to quiet enjoyment – can enjoy the property without being nagged by the landlord. Read the Noisy Neighbor. 4. Upkeep and repairs – have to make repairs when necessary. Have to keep it “fit to live in”. Implied even if not in the lease.

18. 1. Use of the property – tenants can be held liable for waste. 2. Security deposits – this ensures that you will take care of the place and if not, they can keep your money. Fixtures must stay. 3. Responsibility for injuries – landlord can be held liable for negligence. Find a lease that does not include the waiver of tort liability. 4. Landlord access – landlords need to be reasonable. Cannot enter to snoop around, etc. 5. Sublease – you have someone else take over the residence so you can move out. Original lease still intact. You are responsible if the rent is not paid.