Business and Personal Finance © 2007

Chapter 7: The Finances of Housing

Chapter Summaries

  • Renting tends to be less expensive than buying and offers more flexibility. Home ownership offers stability, financial benefits, and increased value over time.
  • Renting a residence has the advantages of mobility, few maintenance responsibilities, and relatively low initial costs. Disadvantages include rent increases, few tax benefits, and restricted activities.
  • The cost of renting is affected by the neighborhood, space, monthly rent, security deposit, and renters insurance.
  • Advantages of owning a residence include stability, individual expression, tax benefits, and increased value. Disadvantages include financial risk, the possibility of value not increasing, limited mobility, and high expenses.
  • When evaluating property, walk through the neighborhood, check the home exterior and interior, and get a home inspection.
  • A down payment is needed to purchase a home. Then a buyer must get a long-term loan, or mortgage, to pay for the remaining purchase price. Closing costs must also be paid.
  • To sell a home, decide whether to use a real estate agent, prepare the home, set a fair price, and keep the home neat and clean.
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