FINN 1003 Ch 7
renter's insurance
covers contents of rented property
what is a lease?
a legal document that defines the conditions of a rental agreement
single-family dwelling
housing unit that is detached from other units
what is in a lease?
◦Description and address of property ◦Name and address of the owner/landlord (lessor) ◦Name of tenant (lessee) ◦Effective date and length of the lease ◦Amount of security deposit ◦Amount and due date of rent ◦Date and amount for late rent payments ◦List of included utilities, appliances, etc. ◦Restrictions on certain activities ◦The right to sublet the unit; transfer clause ◦Conditions under which landlord may enter the rental unit
multi-unit dwelling
- duplex (two homes) - townhouse (2, 4, or 6 units)
renting advantages
- easy to move - fewer responsibilities for maintenance - minimal financial commitment
buying disadvantages
- financial commitment - higher living expenses than renting - limited mobility
Your lifestyle and your choice of housing
- how you spend your time and money - every buying decision = lifestyle statement - personal preferences vs. financial factors - traditional financial guidelines: spend no more than 25-30% of take-home pay on housing, or no more than 2.5x your annual income
condominium
- individual ownership of a unit in a building - "condominium" ≠ a type of building structure - "condominium" = a form of homeownership
renting disadvantages
- no tax benefits - limitations regarding remodeling - restrictions regarding pets, other activities
buying advantages
- pride of ownership - financial benefits - lifestyle flexibility
costs of renting
- security deposit - utilities not covered in rent payment - renter's insurance
security deposit
- usually one month's rent - held against damages to the property - returned at end of lease if unit undamaged - any deductions must be documented
utilities not covered in rent payment
- water frequently covered in apartment rent - if renting a house no utilities included
rental activities
selecting a rental unit - apartment or house advantages of renting - easier to move - fewer maintenance responsibilites - minimal financial commitments disadvantages of renting - no tax benefits - limitations regarding remodeling - restrictions regarding pets and other activities
home-buying process step 1: determine homeownership needs
stability - american dream/norm financial benefits - deduct property taxes and mortgage interest - potential increase in value of your home - building an equity in your home lifestyle flexiblity - express your individuality