OWNING VS. RENTING

Cash for a down payment + mortgage payments

Property taxesHome insuranceCondo owners—condo feesUtilities, maintenance and services

The tenant pays the landlord RENTPossibly utilities such as water, heat,

electricity and parkingServices such as phone, cable and

internetTenant insurance for contents

FIXED COSTS – are the same every month E.g. Rent, cable, parking

VARIABLE COSTS – change from month to month E.g. Groceries, electricity, entertainment

Aziza works full time. Her husband Hassan is a student with a part-time job.

They rent a 2-bedroom loft apartment They pay $975 a month in rent The rent includes heat, water, electricity,

parking, laundry, and cable TV. They have a phone plan that includes unlimited

calling within Canada and the US and 400 min. of overseas calling for $59.95/month.

They do not have a lease, and pay rent month to month.

The Martins are a retired couple with no children living at home. They own a 2-bedroom condo.

Their mortgage payments are $981.72/month They pay condo fees of $450 per month. These

fees include heat, electricity, water, and maintenance.

They pay $387.92 in insure their condo each year.

Their property taxes are $1976.47 a year. They have a cable/phone/internet bundle that

costs $99/month

Tom and Hyo-Jin are a working couple with a 5-year-old child. They own a 3-bedroom detached home.

Their mortgage payments are $1465.33/month They pay $336.52 twice a year for home insurance. Their property taxes are $2358.60 a year They pay for water, sewer, and electricity every two

months. The bills for the last year were: $210.23, $199.51, 186.88, $188.76, $213.75, $193.69

Their home is heated by natural gas. Their bills for all of last year totalled to $893.89

They rent a water heater for $52.95 EVERY 3 MONTHS. They Have a phone plan that includes unlimited calling

within Canada and the US and costs $49.95/month

What are the different housing needs in each situation?

Were the costs of buying or renting more/less than you thought?

Do you think you will buy or rent your first home?

In order to create a budget and plan financially, it is good to look at the total costs in a year.

Example:1) Determine the annual expense of a monthly

rent of $6652) Determine the annual expense of Bi-weekly

mortgage payments of $856.213) Determine the annual expense of semi-annual

home insurance payments of $546.75

Your rental home must be safe and in good repair.

You must have access to services such as heat, hot and cold water, electricity, and fuel.

You have a right to privacy, through the landlord can enter the home for repairs, to show it to prospective tenants or in an emergency

Your landlord can raise the rent once every 12 months and must give you 90 days written notice of the increase.

You must pay your rent on time You must keep the home reasonably clean You are responsible for repairing any

damage you cause to the unit. If you sign a lease agreeing to rent the

property for a specified period of time, you must honour the lease and give 60 days notice before the end of the lease if you do not intend to renew

If you have a month-to-month rental, you must give 60 days written notice before moving out.

Darryl is two months behind on rent. The landlord threatens to cut off the electricity and heat if he does not pay up.

Explain whether or not the landlord can legally carry out her threat and what rights the landlords have.

Option 1 One bedroom

apartment within walking distance from the college

Rent: $625 a month, including heat, electricity, water and parking.

Must sign a 1-year lease

Option 2•College residence•Share a room and washroom with another student•Room includes: beds, desks, shelves, a small fridge, a microwave, cable service (but no TV), and local telephone service•Shared kitchen available•Cost: $6800 for September to April, including utilities and an $1800 meal card.

Give reasons for your answers.Show clear calculations of the

statements that you make.

Think:What are the annual expenses?

Which is least expensive? What are the additional costs for each? What are the benefits of each?

p. 484 #1-9, 11, 12