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Advantages and Disadvantages of Renting or Owning a Home Introduction: Background

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Presentation Transcript
introduction
Introduction:
  • Background
    • Throughout the United States for generations it was typical for a couple to marry and then plan the purchase of their house. Today the face of the buyer has changed with many single people as well as families purchasing homes.
  • Problem
    • Deciding when it is the best time - to buy a home, financially is crucial.
  • Purpose
    • Explore the benefits of buying a home rather than renting.
  • Scope
    • Examine the advantages and disadvantages of renting and buying a home while considering an individual’s life style, goals and financial means.
advantages to renting
Advantages to renting
  • Level of freedom - a lease expires usually after one year and the renter is free to move on to another location with no penalty or loss
  • Very little maintenance - more free time is available to pursue other interests
  • Up-front cash - dramatically less than is necessary in the purchase of a home
disadvantages to renting
Disadvantages to renting
  • Throwing money away - which you will never see any kind of return. You are not investing it in a home’s value
  • Ability to decorate and personalize your living space is limited to minimum
  • No tax advantage that the renter can enjoy. Your landlord will benefit from any kind of tax break
  • Rent increase - yearly
advantages to owning a home
Advantages to owning a home
  • You are making an investment - if you do your choosing carefully, this investment will grow
  • Tax benefits - you can deduct your mortgage interest and property taxes
  • You can customize your dwelling in any way you wish
  • Psychological benefits - a place to truly call home
  • Owning your own home has been described as part of the American dream for generations
disadvantages to owning a home
Disadvantages to owning a home
  • Your home is an investment and it’s value or equity may go up or stay the same but it may also decline. It is somewhat risky
  • If you decide to move, your home must be sold and this is a big undertaking
  • Maintenance - that is an ongoing process.Either you pay for the maintenance or you do it yourself sacrificing much of your free time.
  • A sizeable down payment - is usually required when buying home
determining the best time to buy
Determining the Best Time to Buy
  • Did you save enough money for a down payment?
  • Is your job likely to transfer you to a new location in the next few years?
  • Are you ready to assume the financial responsibilities associated with property and home ownership?
  • Will the maintenance be too much of a burden to you?
  • Have you found an area in which you are comfortable?
conclusions
Conclusions
  • We can conclude that the majority of people would benefit more from purchasing a home
  • No matter what your status, single, married, divorced or just starting out in the workforce, it is usually a better option financially, with a few exceptions, to buy.
recommendations
Keep track of your credit report

Spend some time at the home buyer's prep. school

Develop a budget

Get your financial picture in focus

Find ways to save money on your purchases

Familiarize yourself with the various terms you will hear relating to buying a house

Investigate mortgage pre-qualification and approval

Get mortgage offer comparisons

Get a full understating of how agency works when working with an Agent

Find and choose an Agent

Compare housing types to choose the best for you: Single family, townhouse or condominium

Check home listings and prices online

Determine the value of a home

Compare homeowner’s insurance

Recommendations
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Works Cited

Bluejay, Michael. How to Buy a House: Consider the Financial Impact of Buying a House. February 2004. 17 February 2004

<http://michaelbluejay.com/>.

Dannan, Nancy. House & Home: Homeownership for Singles. 18 February 2004

<http://houseandhome.msn.com/>.

Garton-Good, Julie. The Frugal Homeowner’s Guide: To Buying, Selling, & Improving Your Home. Chicago: Real Estate Education Company, 1999.

Glink, R. Ilyce. 100 Questions Every First-Time Home Buyer Should Ask. 2nd ed. New York: Three Rivers Press, 2000.

Lank, Edith. Home Buyer’s Kit. 4th ed. Chicago: Dearborn Financial Publishing, Inc., 1997.

Mac, Freddie. New Buyer: Rent or Buy? 2004. 18 February 2004

<http://www.newbuyer.com/>.

Murphy, Kate, and William Glasgall. “The House of Your Dreams-Pixel by Pixel.” Business Week (3594) 7 September 1998: Personal Business

Russell, Judi. “A New Home Is Well Within the Reach of Many Buyers.” New Orleans CityBusiness 17(22) 12 February 1997: Focus Real Estate.