On Your Own

1
On Your Own

• Applied Business Practices

2
Warm-Up

• When do you expect to move to home of your own?
• Why do you want to live independently?
• What costs do you expect to pay?

3
Types of Housing

• Four housing options after high school
• Live with parents
• Live in a dorm
• Rent an apartment
• Buy a mobile home, condominium, or single family
  home

4
Roommates

• What should you discuss before you share an
  apartment or dorm?
• Responsibilities and living habits
• Who cleans what, groceries, expenses
• Neatness, house guests, entertainment rules
• Make agreements in writing
• Look for the apartment together
• No one to blame for poor choice

5
First Months Budget

• First and last months rent
• Security deposit
• Amount the landlord holds to cover damages to the
  rental property
• Utility service (deposit)
• Phone service (maybe)
• Water/garbage

6
Sources for Apartments

• Family and friends
• Classified section of the newspaper
• Real estate agencies
• Internet

7
Warm-Up

• What types of information do you think are in a
  lease agreement? Tell of at least four things you
  think are in a lease. Please use complete
  sentences.

8
Types of Housing

• Lease
• Legal contract you sign that gives you the right
  to live in the apartment for a specified period
  of time
• Tenant
• Person renting the apartment
• Landlord
• Owner of the rented property

9
Good-Tenant Criteria?

• Landlord will be screening
• Credit check bankruptcies
• Employment Income
• Rental history evictions
• References
• Must put in Application fee to pay for screening
• Applies to each tenant
• Non-refundable

10
Legal Illegal Discrimination

• Legal
• Poor credit history
• Insufficient income
• Bad references
• Past behavior i.e. destruction of property
• Tenants would exceed valid occupancy policy

• Illegal
• Race
• Religion
• Ethnic background or national origin
• Sex
• Age
• Tenant has children (except in senior housing)
• Mental or physical disability.

11
Apartments

• Tips to Renting
• Rent should be no more than 1/3 of monthly take
  home pay
• Make a checklist to evaluate the apartments
• Ensures you inspect the most important features
  of each apartment
• Purpose of a Lease
• Protect the landlord and the tenant
• Be sure you can live by the conditions of the
  lease

12
What to Expect in Agreements

• The length of the tenancy
• The amount of rent and deposits the tenant must
  pay
• The number of people who can live on the rental
  property
• Who pays for utilities
• Whether the tenant may have pets
• Whether the tenant may sublet the property
• The landlord's access to the rental property, and
• Who pays attorney fees if there is a lawsuit.

13
Illegal Contract Provisions

• Giving up your right to defend yourself in court
• Limiting the landlords liability for things
  theyre normally responsible for

14
Warm-Up

• What do you think are some of the
  responsibilities of a landlord? What do you think
  are some of the responsibilities of a tenant?

15
Landlords Responsibilities

• Making repairs in a reasonable amount of time
• Keeping premises safe and clean
• Entering premises only at agreed-upon time unless
  there is an emergency
• Paying interest on deposit money
• Collecting rent
• Maintaining exterior grounds of building

16
Tenants Responsibilities

• Pay rent and utilities on time
• Using the rental for the purpose stated in lease
• Taking reasonable care of premises
• Notify landlord of major repairs needed
• Giving notice if leaving at end of lease
• Giving notice if leaving before lease is up AND
  paying rent for balance of lease unless a new
  tenant is found
• Paying for any damage to walls, floors, and
  furniture
• No alterations to property the landlord must fix
  later
• Giving landlord new set of keys if locks are
  changed
• Paying all rent if roommates move out and you stay

17
Renters Insurance

• Insurance covers loss to belongings
• From fire theft
• Depends on value of policy 25K 50K
• Deductibles start at 250

18
Landlords Legal Right to Enter

• May need to
• Make repairs
• Show property
• Must give notice
• Varies by state from 24 hours to reasonable
  notice
• No notice needed
• Emergency
• Fire
• Serious water leak
• Abandonment
• You cant refuse access

19
Repairs

• Put your request in writing
• Give landlord time to respond. Required response
  time varies by state but generally
• 24 hours for no hot or cold water, heat,
  electricity or for other hazardous or
  life-threatening conditions
• 72 hours for refrigerator, range, oven, or major
  plumbing problems
• 10 days for all other repairs

20
Tenants Rights for Repairs

• Options when landlord wont repair
• Pay less rent
• Withhold rent
• Make repairs
• Hire professional deduct cost from rent
• Call building inspector
• Mediate or go to court
• Move out (give notice)
• Varies by state

21
When You Can Be Evicted

• Not paying rent
• Even if one day late with rent
• Three-day notice to pay or move out required
• Not complying with terms of rental agreement
• Ten-day notice to comply or move out required
• For creating a waste or nuisance
• Three-day notice to move out required
• No option to stay to correct problem

22
Illegal Landlord Actions

• Even if youre behind in rent
• Lockouts
• Utility shutoffs
• Taking your property (unless you abandon it)
• Retaliatory actions

23
When the Tenant Breaks the Lease

• Tenant can legally break the lease if
• Landlord fails to make repairs
• Fails to comply with health safety
• Tenant responsible for remainder of rent under
  lease term
• Landlord has duty to find a new tenant

24
Warm-Up

• Besides rent and security deposits, what are some
  other costs you should be prepared for when
  moving out on your own?

25
Warm-Up

• Why is it important to create a budget before you
  move out on your own?

26
When You Move Out

• Provide written notice according to your rental
  or lease agreement.
• Rental Usually 30-day notice
• Lease Youre responsible for rent for remaining
  leasing term unless landlord can rent unit

27
More When You Move Out

• Clean apartment and leave in same condition as
  when you moved in (except normal wear and tear)
• Leave forwarding address for deposit return

28
How to Protect Yourself

• Ask parents to walk through rental with you
• Take pictures of everything (include date on
  photo)
• Go through rental check list

29
Warm-Up

• Read Article Roommate How to Get Along with
  Them
• Write a two paragraph summary

30
Budgeting for the Move

• When preparing for the move keep in mind
• Your personal and financial goals
• Your income
• Your lifestyle
• Your fixed expenses
• Your flexible expenses
• Moving costs
• Moving-in costs
• The cost of setting up house

31
Budgeting

• Fixed Expense
• Items you have committed to spend
• Example utilities, rent
• Variable/Flexible Expense
• Items you can choose to spend or not
• Going to movies or eating out

32
Furnishing Your Home

• Used Furniture
• Thrift Stores
• Salvation Army
• Good Will
• Garage Sales

33
Furnishing Your Home

• Consumer Reports
• 1 magazine that reports the strengths and
  weaknesses of many different brands of products

34
Furnishing Your Home

• Energy Labels
• Predict the cost of running the appliance
• Floor Models
• New items reduced in price because they have been
  on display in the store

35
Buy or Rent

• Advantages of Renting
• Lower cost
• Less responsibility
• Mobility
• Advantages of Buying
• Ownership
• Value
• Your own space
• Fewer Restrictions
• Tax deductible
• http//www.jumpstart.org/madmoney/asproot/pgv_mone
  y_reality.cfm

36
Buying a Home

• Down Payment
• Specific of purchase price you pay up front
• Mortgage
• A loan to buy real estate
• Property serves as collateral for the loan
• Principal
• Amount you borrow

37
Buying a Home

• Mortgage Redemption Insurance
• A form of life insurance where the balance is
  paid if borrower dies before loan is repaid

38
Housing Expenses

• Things to consider that might be unexpected
• Repair and upkeep
• Initial utility costs such as installations
• appliances

39
Buying a Home

• Closing Costs
• Fees you must pay after you buy a house
• Includes
• Property taxes (taxes on real estate that might
  need refunded to seller for a portion of the
  year)
• Attorneys fees (preparing and checking legal
  documents)
• Loan origination fee or points (commission for
  granting the loan)
• Title Search (legal right to own a property)
• Recording fee (written evidence conveying title
  from one person to another)
• Appraisal fee charge for examining and
  determining the value of the property)
• Liens (claims against the property by others)

40
Buying a Home

• How much can you afford?
• The rule of thumb is that you can generally
  afford a house 2.5 times your gross annual
  income.
• Example
• Gross annual income 50,000
• 50,000 X 2.5 125,000

41
Warm-Up

• Calculate the down payment and amount left for
  the loan for the following
• 10 down payment on a house 125,000
• 20 down payment on a house 88,900
• 25 down payment on a house 115,500