COA 4131 1st Edition Lecture 9 Outline of Last Lecture Review for first exam Outline of Current Lecture I Did You Know II Renting vs Owning III Budget Items IV Median House Prices Current Lecture A Did You Know a Most people in the U S own their own home i About 67 ii Unusual to other places in the world b 70 of economy is driven by consumers B Renting vs Owning a Rent i More people rent for longer before they own ii Security Deposit 1 One months rent typically 2 Given up front 3 At end of lease if in good condition you will get this money back a If something gets broken or problems document these things so you can prove things later iii Lease 1 Contract a Rights and obligations on both sides as renter and seller iv Sublease 1 Someone else can rent from you rather than from renter 2 During the summer v Tenant rights 1 Things aren t what you think 2 Tenant has to give habitable condition a Proper plumbing running water C Budget items a Housing i 32 of expenses ii Biggest chunk iii Can add 5 from utilities b Transportation i Second biggest chunk c Renting i Pro s 1 Pool services 2 Landlord takes care of problems a Mobility i Month to month lease ii 9 month lease iii Year long lease iv You can move around 3 Community a People are close so feel more safe ii Con s 1 Not building worth simplifying paying it and that s it 2 If property goes up in value you don t benefit 3 If prices go up nothing you an do about it 4 Mostly no garage storage is lacking 5 Laundry hookup may or may not be in unit a Laundry mats d Buying i Attributes 1 If you buy something you build equity 2 Pride in ownership 3 Fixed mortgage a Pay so much a month and this price will stay that way for years 4 Laying down roots in community a Once you own you can stay 5 Build credit ii Con s 1 How much control a Have rules and regulations i Paint colors 2 Down payment a Typically 20 b Has gone up used to be 10 3 If something goes wrong you have to fix it a Can be expensive i Roof issues 4 Home Owner Association fee s a Can get really expensive i Usually once a year fee ii Pays for maintenance iii Pool cleaning iv Entrance maintenance e What do you like i Style ii Location f What can you afford i If you don t know how long you are going to be there 1 If there 3 years or less rent instead of buying g Formulas i 25 40 of your take home pay 1 40 is for very expensive places a L A Beverly Hills NYC ii Typically 32 iii Depends on circumstances career and other expenses 1 Do you want to travel vacations ect D Median House Prices a Tallahassee i 156 000 b Miami Ft Lauderdale Miami Beach i 206 000 c Cheapest prices are in Midwest d More expensive in North East U S e Windows cost more than walls i Lots of windows in house is a good sign ii Natural light f Floor plans i Lines in closet means upper cabinets or shelves ii Vaulted means vaulted ceilings 1 Typical new house is 9 ft ceilings 2 Older houses have 8ft ceilings iii Upstairs smaller ceilings than downstairs 1 downstairs 8 ft 2 upstairs 9 ft
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