LECTURE 13 3-11-15Phase 4: Post-purchase activitiesUse and maintain correctly for best performanceInvestigate variety of servicing optionsLeasingContractual agreement with monthly payment for use of a vehicle over a set period of timePros:Lower payments, smaller initial cash outlayAble to obtain more expensive vehicle more oftenCons:No ownership or equity in the vehicleExtra charges: mileage limits, conditionChapter 9: The Housing Decision: Factors and FinancesHousing AlternativesPersonal preferences are modified by financial factorsSpend no more than a third of your monthly take-home pay on housingRenting your ResidenceAdvantages of rentingEasier to moveFewer maintenance and repair responsibilitiesDon’t need financingDisadvantages of rentingNo tax benefitsLimitations regarding remodeling/decoratingRestrictions regarding pets and other activitiesCosts including a security deposit and renter’s insuranceLegal Details of a LeaseDate and amount for late rent paymentsList of included utilities, appliancesRestrictions on certain activitiesThe right to sublet the unitConditions where landlord may enter the rental unitOwning your residenceAdvantages of OwningPride of ownership- “American Dream”Financial benefitsDeduct property taxes and mortgage interestBuilding equity in homeAble to remodel/decorate as you wishDisadvantages of OwningFinancial uncertaintyObtaining money for the purchaseHome values could dropLimited mobilityCan take time to sell your homeHigher living costsHome improvements and repairsReal estate taxesStep 1: Determine Your Home Ownership NeedsAssess types of housing available (3 types)Single-family dwellingMost popularMulti-unit dwellingDuplex/Twin homeCondominiumYou own your unit in a building of unitsAssociation feeStep 2: Find and Evaluate Property to PurchaseDecide if you want to use a real estate agentSelect a location to search for housingBe aware of zoning laws and covenantsSchool systemHDFS 357 1st Edition Lecture 13Outline of Last LectureI. Consumer ComplaintsII. Major Consumer PurchasesOutline of Current LectureI. Major Consumer Purchases (Cont.)Chapter 9I. Housing AlternativesII. Renting your ResidenceIII. Legal Details of a LeaseIV. Owning your ResidenceV. Steps of HousingCurrent Lecture LECTURE 13 3-11-15- Phase 4: Post-purchase activitieso Use and maintain correctly for best performanceo Investigate variety of servicing options- Leasingo Contractual agreement with monthly payment for use of a vehicle over a set period of timeo Pros: Lower payments, smaller initial cash outlay Able to obtain more expensive vehicle more often o Cons: No ownership or equity in the vehicle Extra charges: mileage limits, condition Chapter 9: The Housing Decision: Factors and Finances- Housing Alternativeso Personal preferences are modified by financial factorso Spend no more than a third of your monthly take-home pay on housing- Renting your Residenceo Advantages of renting Easier to move Fewer maintenance and repair responsibilities  Don’t need financing o Disadvantages of renting No tax benefits Limitations regarding remodeling/decorating  Restrictions regarding pets and other activities  Costs including a security deposit and renter’s insurance - Legal Details of a Lease o Date and amount for late rent payments o List of included utilities, applianceso Restrictions on certain activities o The right to sublet the unito Conditions where landlord may enter the rental unit - Owning your residenceo Advantages of Owning Pride of ownership- “American Dream” Financial benefits Deduct property taxes and mortgage interest Building equity in home  Able to remodel/decorate as you wisho Disadvantages of Owning Financial uncertainty  Obtaining money for the purchase Home values could drop Limited mobility Can take time to sell your home Higher living costs Home improvements and repairs Real estate taxes- Step 1: Determine Your Home Ownership Needso Assess types of housing available (3 types) Single-family dwelling Most popular Multi-unit dwelling Duplex/Twin home Condominium You own your unit in a building of units  Association fee- Step 2: Find and Evaluate Property to Purchaseo Decide if you want to use a real estate agent o Select a location to search for housing  Be aware of zoning laws and covenants  School