The Finances of Housing

Business and Personal FinanceChapter 7

Advantages• Easy to move• Low maintenance

responsibility• Low financial

commitment

Disadvantages• Few Financial Benefits

– No tax advantage• Limitation on activities

– Less Privacy• Legal Concerns

– Lease• Sublet????

Renting an Apartment

Advantages Disadvantages

• Easy to move

• Low maintenance responsibility

• Low financial commitment

• More Space

• No tax advantage

• Some limitation on activities

• Higher utility expenses

Renting a House

Advantages

Disadvantages

• Pride of Ownership

• Plenty of Space

• Tax benefits

• Financial commitment

• High living expenses

• Limited mobility

Owning a

House

• Advantages • Disadvantages• Pride of Ownership

• Fewer maintenance costs or responsibilities than a house

• Tax benefits

• Access to recreation and businesses

• Financial commitment

• Less privacy than in a house

• Need to get along with others

• Typically small and limited space

• May be hard to sell

Owning a Condominium

• Advantages

• Disadvantages

• Less expensive than other ownership options.

• May be hard to sell

• Possible poor construction quality

Owning a Mobile Home

Types of Housing

• Single Family Dwellings• Multiunit Dwellings

– Duplexes– Townhouses

• Condominiums• Cooperative Housing• Manufactured Homes

– Prefabricated– Mobile Home

HousingHow much can you afford?

• Price and Down Payment– Financing

• Points• Interest Rate

– Mortgage– PMI (Private Mortgage Insurance)– Closing Costs

• Size and Quality

Your lifestyle will affect the type of housing that you

choose!