INVESTING

IN SHELTER

Gebyar Ayuningtyas | 08111850010002

Ahmad Ridwan Lubis | 0811185001000
 MAKING HOUSING DECISIONS WHAT TO LOOK FOR IN RENTING
1. An apartment
Individu or family needs • Compromising about • Wall, ceiling,
BUYING or depend ideal needs and what’s • Neighborhood
on Present and future income
RENTING ? actually available community
Affordability &
• Room’s layout, related to • Availability of shopping
dependability of income privacy areas and recreation
• Adequate space for • Who pays for utilities?
The main attraction of buying each activity
Building equity home’s • Kitchen and workspace
= INVESTMENT • Closet (clothing and
market value after other debts
sports equipment)
have been paid
• “Dead” storage
• Air-conditioning and
What do renter collect ? heating

possibility
Rent receipts
option
There’s such a lease provides that a part
of each month’s rent will be
apportioned to a down payment if the
renter later decides to buy the property
Recommendation : Total housing bill (basic
cost + utilities and maintenance) ≤ 35% of a
family’s total take home pay (Federal Housing
Administration)
• Electrical equipment
2. A house
• Which building are included in the lease?
• Responsibilities (lawn care, garbage disposal)
• Major equipment (stoves, refrigerator, AC)
• Cost of utilities
Is buying a home a hedge against inflation ?
In the past 25 years → buying a house =
increasing value more rapidly than general level of
inflation
Today → No guarantee that a house bought now
will increase in value as sharply as housing did in
the past 25 years
 COST TO CONSIDER IN
HOMEOWNERSHIP What buyers should check ?
FACT Repair and maintenance
Cost of housing has risen
faster than family income Either for weather
damage or normal use

Define SAFETY MARGIN

for housing cost
Assesments

Average Monthly Sidewalks, roads, sewer

monthly non-housing lines, water pipes
income expenses

Depreciation and Appreciation

• Houses, furnishings, home improvements → depreciate
• Land may → appreciate

How large a down payment should you make ?

Other considerations :
• Possibility of decreasing monthly income
• Regular saving plans vs. Unpredictable
expenses
• The larger down payment, the smaller amount of the mortgage
loan and monthly payments, also the less total interest you will
pay
• Amount of down payment determine your equity of ownership
 NEIGHBORHOOD AND COMMUNITY
 Check whether street, traffic noise, or air pollution exist
 Check the condition of the street
 Does water rain water run of into sewers?
WHAT TO LOOK
 Compare price with another house for sale in the area FOR WHEN
 Check out community sewer system, septictank, street lights, garbage disposal
 Availability and affordability of community services (school, university, public BUYING A HOME
transport, medical service, police station, shopping area, mosque, etc

EXTERIOR APPEARANCE  To look for as many as

Including walkway, driveway, twenty or thirty houses to
lawn, trees, shrubs, lighting from get a feel for the market
the outside, cracks, sign of rust so buyer can genuinely
recognize current value in
CHECKING THE INTERIOR housing
Suitable layout for activity and  Look out and check by
traffic pattern, food and dining himself for defects, such as
space, living areas, bathroom, leaky roofs, flooded
sleep and rest areas basements, shaky
foundation, and other
indications that needs major
CHECK THE SYSTEMS repairs. Professional house
• Heating system : age and type of heating
inspector may be needed
system, signs of drying, peeling, or mildew
• Electrical system : check if there is
adequate capacity for daily use
• Water system : water pressure, water flow,
water quality, check faucets for leaks
 Home-Inspections Services
Services include :
• A house detailed going over and report all that is wrong
with the sewage, plumbing, heating, and electrical wiring
• Check for termites and structural weakness

The Home Owners Warranty (HOW)

Basically is an insurance plan that protects the homeowner against faulty workmanship by the
builder for the first two years of ownership and then by an insurance company for the third through the
fifth years.
Participating builders must be acceptable to their peers on the basis of finansial soundness, technical
competence, and ethical conduct

Plans covering old homes

Warrantee plans for some older homes
The owner should do well to inquire about this program as National Home
Inspection Service, Palace Guard, and The Buyers Protection Plan.

What services does the real-estate broker provide ?

• Broker’s license alows him/her to bring buyers and sellers together for a fee paid by the seller (6% - 7% of the
selling price)
• Broker doesn’t guarantee the condition of the property
• Broker also offer names of lawyer, finansial counselors, and available mortgage services in the local banks
• Broker must be interested in the buyer’s lifestyle to be able to suggest properties that “fit” the buyer’s needs
 LEGAL STEPS TO HOMEOWNERSHIP
Preliminary negotiations
The binder
The contract of sale
Causes of misunderstanding
Getting ready to buy
Types of Mortgage
First and second mortgages
Should you pay the
mortgages early ?
Alternative to conventional
mortgages
The closing : Settlement
costs
RESPA and full disclosure of
settlement costs
Other consumer protection
• Seller ask for the highest price, buyer offers the lowest price
• An incomplete contract of sale draw up an agreement by putting up a deposit
• Spells out detail agreement between buyer and seller (price, terms and
methods of payments, responsibility for prior claim, restrictions, responsibility for
paying insurance)
• What are things include in the part of the deal? Make sure all of them are clear
• After surveying the property, comparing each other, and arranging for
mortgage financing, choose the best one
• Based on the proportion of principal payment and interest for each month
• If primary financing is difficult to obtain, seller of the property may agree to
hold the the second mortgage.
• If the owner get an aextra income or unexpected assets. However, whether the
choice is to spend or rather than save, somenone could end up richer, poorer, or
just having enjoyed life more in the same period of time
• Vulnerable to the risk of inflation
• Complex arrangements in whivh legal documents are prepared, executed, and
delivered and the final finansial arrangement between buyer and seller are
settled
• Buyer became entitled to know the previous selling price of the house being
purchased
• Make it possible to comparison shop for attorneys with reasonable fees to
handle the generally routine task of real estate closing
FINANCING MOBILE-HOME OWNERSHIP
• Financing a mobile home is the type
usually applied to automobiles.
• Mobile Home are considered to be
chattels NOT real estate
• In 1975, most mobile-home owner
are attracted by their comparative
low cost. Where a conventional
house and land might cost an
AVERAGE of $35,000.
• You can get a Mobile Home between
$7,500 and $9,000.
• Taxes are LOWER rather than real
property.
• May only pay : small license fee,
monthly rent on land, maintenance,
and utility
 PROPERTY
INSURANCE
Property Insurance
IS ESSENTIAL

Insurance Information Institute, 1973

 September 1975, The House Ways and
Means Committee heard that a person with
a total income of over $100,000 to pay no
fedeal income tax
Deduct interest paid on
mortgages or other loans
BENEFITS

Avaliable to veteran and

senior citizens Extensive revision of the tax law by
the Congress
Tax saving from one to
several hunderd dollars
in the first year

The individual homeowner must become scrupulous

about record keeping. The homeowner must keep
record of how much is paid in interest on the
mortage, cost of capital improvements such as adding
landscaping, a room, or a fence to the property.
 THE TWO
FAMILY HOUSE
Benefits :
• Costs may shared equaly
• Family Solidarity

Types :
• The Converted One Family
• The Designed Two Families
• The Semidetached

Price :
• Two Familie Home with 2 five
rooms cost $70,000
• Seperate Units, same
neighborhood cost $40,000
 SWEAT EQUITY :
HOW SKILLS CAN SAVE MONEY
Semifinished shell Precut House

Built it your self Finish it your self Remodel it your self

40% Savings