FINN 1003 Ch 7

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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


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