1. “That, of course, is the question. Why buy the cow when you can have the milk? Or the house when you can just rent?” -Raoul Relder Copyright © eNestEgg Press, LLC.

2. Learning Objectives Making a Choice How much house can you afford? Pros/Cons Rent to Own Getting your first apartment Understanding a lease Copyright © eNestEgg Press, LLC.

3. Evaluating Alternatives Part of the American Dream has always included home ownership. But is this always the best financial decision? For many people in this day in age, renting may be the better short or long term housing choice. At the end of the day, choosing between renting or buying depends on your lifestyle, values, and financial situation. Copyright © eNestEgg Press, LLC.

4. How much house can you afford? Many homeowners get into trouble by buying a house that is larger and/or more expensive than what is practical. An old rule of thumb is to spend no more than about 25% of your household income on housing. This means you home should not cost more than 2 ½ times your annual income. Despite this, 1 in 5 people spend over 50% of their income on housing. Copyright © eNestEgg Press, LLC.

5. Perform a Financial Check up Before deciding to rent or buy, consider the following: Where do you think you'll be in the future? Will you still be in the same town in 5 years? What kind/how much of debt are you holding? Do you have enough saved for a down payment? Most recommend at least 20% What's your job situation? How confident are you that your employment and earnings will be stable in the future? Copyright © eNestEgg Press, LLC.

6. Question Cluster 1 Copyright © eNestEgg Press, LLC.

7. Renting Pros Mobility - Renting is no where near as big a commitment as owning. If you wish to move at a moments notice, breaking a lease is relatively cheap. Its Cheaper - For many people, renting can save you a considerable amount of money. Less Hassle - A renter does not have to deal with all the day to day headaches that comes with owning a home (repairs, lawn care, etc.). Amenities - Most apartments come with a plethora of services and amenities. Pools, gyms, laundry rooms and more are available to renters (at least for most apartments). Copyright © eNestEgg Press, LLC.

8. Renting Cons You are restricted - You may not be able to get a pet or paint the walls in a color of your choosing. Dealing with certain landlords can be a pain. No Tax Benefits - You wont get the various tax breaks and advantages on your tax return. You will not own anything - All the money spent paying your rent doesn’t lead to eventually having something to call your own. Many people don’t like the idea of not having a home base. Copyright © eNestEgg Press, LLC.

9. Selecting a Rental Unit Apartments: Generally the most common type of rental housing. They can range from luxury units, to a simple one or two bedroom unit. Most offer amenities such as a gym or pool area. Homes: If you decide you need more room than what an apartment can offer you, consider renting a home opposed to an apartment. Copyright © eNestEgg Press, LLC.

10. Selecting a Rental Unit When comparing rental units it is important to consider: Financial Aspects Location Layout and Facilities Building Interior Building Exterior Copyright © eNestEgg Press, LLC.

11. The Lease A legal document that defines the conditions of a rental agreement. A lease generally contains: The name of the tenant. The name and address of the owner/landlord. The date and length of the lease. The amount of the security deposit and rent costs each month. Information amount late rent payments (date & costs). Restrictions on the property. Charges for damages to the apartment or for moving out early. Some leases may include conditions that you do not wish to accept. It is important to negotiate with the landlord about lease terms you consider unacceptable. Copyright © eNestEgg Press, LLC.

12. The price of renting: Annual rent payments Renters insurance Interest lost on security deposit: Cost of utilities: Copyright © eNestEgg Press, LLC.

13. Rent to Own An option becoming more common in recent years is Renting to Own. Buying a home in the traditional manner may not be an option. In a Rent-to-Own agreement you agree to rent the home for a set amount of time before exercising an option to purchase the property when or before the lease expires. Copyright © eNestEgg Press, LLC.

14. Question Cluster 2 Copyright © eNestEgg Press, LLC.

15. Buying Pros Emotional Satisfaction - Many people love the idea of having a place to call your own. The idea of putting down roots and having that stability is very appealing to many people. Personalize - When you own, you can alter your living space to your exact needs and wants. There will be no landlord to tell you otherwise. Financial Benefits - Owning a house can provide you with tax breaks. Having equity in your home can allow you to take out loans down the line. Copyright © eNestEgg Press, LLC.

16. Buying Cons Its not as easy to move: Owning a home might tie you down to one spot. In todays job market, having the mobility to move across the country for employment is a major advantage. Its expensive: Besides paying for the dwelling itself, there are many other costs. Maintenance, taxes, insurance and more can really burn a hole in your pocket. Even utility payments tend to be lower when renting. Copyright © eNestEgg Press, LLC.

17. Owning a home is not a good investment Your home may climb in value by leaps and bounds. Long-term historical trends actually show that housing appreciates at a rate barely above inflation (3-4%). Some people choose to purchase property to rent to tenants for steady monthly income (rents). Copyright © eNestEgg Press, LLC.

18. Question Cluster 3 Copyright © eNestEgg Press, LLC.