Advanced Financial Literacy Unit #5 Test Review Activity

Check ALL that apply towards the disadvantages to renting your home.___.

• No building of equity.

• No tax breaks

• Control over housing costs.

•    No upfront costs.

Check ALL that are advantages to renting your home..

• Rent is tax deductible.

•   Repairs and maintenance costs are the landlord’s responsibility.

• Utilities may be included.

• Easier credit requirements.

Check ALL the disadvantages to owning your home.

• Potential for financial loss.

• Ongoing costs of repairs and maintenance.

• Creative freedom to décor.

• Homes are usually unfurnished.

Check all the advantages to owning your home.

•   

    Creative freedom to décor.

• sense of belonging and community.

• volatility of the housing market.

• mortgage interest and property taxes are tax deductible.

Income that takes little or no effort is _____________________________.

• passive

• active

• earned

• deferred

The common disadvantage of buying a home is

• fewer financial benefits

• limited mobility

• restrictions on decorating and having pets

• conditions in the lease

Check ALL that apply towards income streams of investment properties.

• Rent

• Laundry and vending machines

• Parking fees

• Interest

Capital appreciation from an investment property is __________

• gains in its equity.

• increase in expenses.

• decrease in depreciation cost.

• loss in value.

Check all the ways an investment property earns capital appreciation.

• Increase in rents

• Paying down the mortgage

• Area or neighborhood properties have increased in value.

• Increase in property taxes.

Check all the tax advantages of investment properties.

• Costs of owning, operating, and managing a property are deductible.

• Depreciation

• Taxes on capital appreciation can be deferred

• Non-rental income is tax-free.