Personal Finance 7.1-7.2

Who is renting generally a good choice for?

-young ppl beginning their careers -ppl who need mobility -ppl who don't wanna devote time or money to maintenance -ppl whose funds are limited

What is mobility?

Ability to move easily from place to place

Who are the two ppl involved in a renting arrangement?

-tenant: person who pays for the right to live in a residence owned by someone else -landlord: person who owns the property that is rented

Advantages of renting an apartment?

-easy to move -low maintenance responsibility -low financial commitment

Advantages of renting a house?

-easy to move -low mantenance responsibility -low financial commitment -more space

What are the main disadvantages of renting?

-financial (low initial costs, but have to keep paying) and lifestyle restrictions -legal issues

Disadvantages of owning a house?

-financial commitment -high living expenses -limited mobility

Disadvantages of owning a condominium?

-financial commitment -less privacy -need to get along with others -typically small space -may be hard to sell

What are the 3 main advantages of renting?

-greater mobility -fewer responsibilities -lower initial costs

Disadvantages of renting a house?

-higher utility expenses -some limitations on activities -no tax advantage

Advantages of owning a mobile home?

-less expensive -mobility

What are some housing information sources?

-libraries -newspapers -internet -friends and family -real estate agents -government agencies

What are the factors affecting the cost of renting besides basic rent?

-location -living space -utilities -security deposits (amount of $ paid to the owner of the property by the tenant) -renter's insurance (covers the loss of tenant's personal property as a result of damage or theft)

Disadvantages of owning a mobile home?

-may be hard to sell -possible poor quality

Disadvantages of renting an apartment?

-no tax advantages -limitations on activities -less privacy

Advantages of owning a condominium?

-pride of ownership -fewer maintenance costs/resposibilities -tax benefits -access to recreation and business

Advantages of owning a house

-pride of ownership -plenty of space -tax benefits

What is good about buying?

-stability -privacy/freedoms -financial benefits -value of house may increase

Figure 7.1

-young single: apartment (mobility and low finances)/small house (tax benefits and appreciating value) -single parent: rent apartment/house (maintenance, playmates, low finances)/home (long term financial security) -young couple with no children: rent apartment/house (mobility and low finances)/house (long term financial security) -couple with children: rent apartment/house (maintenance and playmates)/house (long term financial security and more space and privacy) -retired person: rent apartment/house (financial, social and physical needs)/home (little maintenance, conviences, and different services)

What is a lease?

A legal document that defines the conditions of the rental agreement between the tenant and the landlord

What is the relationship between size and cost when renting an apartment?

Extra space=higher rent

What do you need to consider when making housing decisions?

Lifestyle -how close do you wanna live to work -how long do you plan to stay in one place -privacy level

What are the two basic considerations about housing?

Renting vs. Buying

Opportunity costs come with making a housing decision, True or False?

True -can't only look at benefits, have to look at what you're giving up

Figure 7.3?

What to consider when selecting an apartment: location, finances, building, layout and facilities