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Housing Options.

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Presentation on theme: "Housing Options."— Presentation transcript:

1 Housing Options

2 Your Lifestyle and Choice of Housing…
How does your lifestyle affect your choice of housing? Finances play an important role in housing decisions. One major factor you will need to consider when making housing decisions is your lifestyle. Way you choose to spend your time and money Your lifestyle will determine several housing decisions: How close to work you want to live How long you plan to stay in one place How much privacy you would like to have

3 Opportunity Costs of Housing Choices
What are some opportunity costs to consider when purchasing a home? Buying a handyman’s special – home that is priced lower because it needs repairs and improvements Renting an apartment may give you more mobility, which is the ability to move easily from place to place but you give up tax advantages Can’t only look at the benefits you have to consider what you will be giving up: Time Effort Money

4 Renting vs. Buying Why would you rent a home if you could buy one?
Renting is a good choice for young adults who are beginning their careers. It appeals to people who want or need mobility. Renting is a good choice for people who do not want to devote time or money to maintenance. Renting can be cheaper, it appeals to people whose funds are limited.

5 Renting vs. Buying Owning property also has advantages
Buying a house gives the owner privacy and some freedoms that may not be available to a renter. No pet restrictions Larger gatherings No renovation restrictions Costly but it has financial benefits Tax advantages Value may increase (good long-term investment)

6 Evaluating Housing Alternatives
Advantages Disadvantages Renting an Apartment Renting a House Owning a House Owning a Condo

7 Evaluating Housing Alternatives
Advantages Disadvantages Renting an Apartment Easy to move No tax advantage Low maintenance responsibility Limitations on activities Low financial commitment Less privacy Renting a House See above Higher utility expenses More space Owning a House Pride in ownership Financial commitment Plenty of space High living expenses Tax benefits Limited mobility Owning a Condo Fewer maintenance costs Need to get along with others Access to recreation Limited space

8 Housing Information Sources
Where can you research housing options Libraries Newspapers Internet Friends and Family Real Estate Agents Government Agencies HUD (US Department of Housing and Urban Development)

9 Renting a Residence Selecting a Rental Unit
What should you know before signing a lease? “3-bdrm apt., a/c, w/w carpet, pvt back ent, $800 + utilities, ref reqd” 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.

10 Size and Cost Two-story house High-rise building Apartment complex
Contain separate living units Studi0 (efficiency – one room) 1 to 3 bedrooms 1 + bathrooms (1/2 bath – sink and toilet) On-site conveniences Swimming pool Tennis courts Laundry facilities Gym

11 Selecting an Apartment
Location Finances Building Layout and Facilities Near school or work Near place of worship Near shopping Near public transportation Near recreation Amount of monthly rent Amount of Security deposit Cost of utilities Length of lease Condition of building and grounds Parking Recreation on premises Security system Conditions of hallways and elevators Access to mailboxes Size and condition of units Type and control of heating and cooling Plumbing and water pressure Condition of appliances Condition of doors, locks, windows, closets and floors

12 Buying and Selling a Home
As a homeowner you will gain financial benefits: Deduct interest charges on your loan payments from your federal income taxes each year. Property taxes are also deductible Build equity as home value goes up Drawbacks Limited mobility Financial risk if value goes down Must pay for all maintenance

13 Types of Housing Single-family Dwellings Multiunit Dwellings Townhouse
stands on separate lot with a lawn and some outdoor living space Multiunit Dwellings Duplex – single building divided into living spaces for 2 families Triplex – 3 families Townhouse one of many single-family units attached to other units (own outside entrance) May have small back yard to use Monthly fee to cover maintenance, repairs, insurance Common spaces-lawn belong to association not individual owners Condominiums one of a group of apartments that people own instead of rent. Common spaces-hallways, lawn belong to association not individual owners

14 Types of Housing: Prefabricated Homes Mobile Homes
manufactured and partially assembled at a factory. Mobile Homes fully assembled in a factory

15 Hiring a Real Estate Agent
People who arrange the sale and purchase of homes as well as other buildings and land Negotiate purchase price between buyer and seller Real Estate services are usually free to the buyer The agents may represent the sellers, who pay them a commission of 3 to 6 percent when the property is sold.

16 Economy Economy The ways in which people make, distribute, and use their goods and services Supply - The amount of goods and services available Demand - The amount consumers are willing and able to buy

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