Do You Have What It Takes To Be A Landlord

Do You Have What It Takes To Be A Landlord

Are You the Right Person for being a Landlord?

Becoming a landlord is a great financial move for those that can take on the added responsibility that comes along with owning rental property. There are some great advantages and then there are some disadvantages of being a landlord in today’s society. In this article we will take a look at some of these disadvantages and give you some insight from what we have learnt over the years. Before we go any farther, just remember that if you have what it takes to be in business as a landlord you can diffidently make some serious income.

Being a landlord just might be the calling for you. This type of entrepreneurship is not for everyone though. Succeeding in this business does need a person to have a certain set of people skills and you must be able to handle issues that can arise expectantly. Sometimes there are some big challenges and headaches that a landlord has to deal with. So let’s jump into this article and take a look at what I call the 5 major challenges of being a landlord

Challenge number one: Locating the right property to purchase.

Purchasing property to use as a rental can open doors to many problems, some of these issues can be a huge burden on many that we will dedicated a whole article just on this subject in an up-coming post. Some important items that you will want to consider when purchasing property is:

  1. Neighborhood
  2. School system
  3. Property taxes
  4. Neighborhood crime
  5. Un-employment rate
  6. Number of other rentals that are vacant
  7. Going rental price
  8. Insurance cost for the area
  9. Public services
  10. Utility cost

Having a real estate agent may be beneficial for completing the purchase of the home but it is not always worth the hassle when searching for an investment property. A real estate agent works on commission and they may put undue pressure on you to purchase a piece of property that does not suit your needs or desires. If you are in no hurry to purchase then you sit in the driver seat to land a bargain when it falls on the market.

Challenge number two: Financing the property.

Again this is a huge question that we will cover more in-depth in an up-coming article. One of the biggest road blocks for purchasing rental properties is funding the cash needed to purchase the property. For investment properties you will need to come up with 20 percent down payment and closing cost. If the home needs repair before you are ready to rent it out then you will also need cash to do the repairs and prep the home for new tenants. One place that you could find this needed cash is through refinancing your personal home with either a line of credit, a HELOC loan or a cash out refinance loan. Do your research before making any financial decisions and get some good financial advice before signing on any dotted line.

Challenge number three: Are you the type of person that can do things your-self?

If you are a handy type person that can do simple plumbing repairs, electrical wiring, yard work and maybe some light construction then you could be a great candidate for being a landlord. Depending on the type of property you buy usually some of the basic things that you will need to do is apply a fresh coat of paint, either clean the carpets or replace them, fix or replace window screens and maybe some lawn maintenance. Remember the more you can do the more money stays in your pocket.

Challenge number four: Finding the right people to rent too.

What you are looking for are responsible adults that will be long-term tenants that will take good care of the property. Many times this is hard to find. With today’s social media sites one can screen their tenants with hardly any cost to the landlord. When I take an application I will tell the prospective tenet that I will have an answer for them within a week. I will take the application and jump on Facebook, twitter, and Google search their name to find out what type of people they really are. Example, I had one tenant that put on a good show at the time of visiting the house and had a good-looking application. When I Google and Facebook the applicant I found that they were huge party people who had many calls on them by the police department. This information I used to not rent the property to them. Properly screening your tenants by running credit checks and background check will take a bite out of your profit but is well worth the time and money to make sure that you get the tenant that will be responsible and not a burden to you.

Challenge number five: The hassles of tenants.

You could have the perfect property, the perfect tenant but even these come with their issues. Just like any home you are going to experience items that break from time to time. Broken water pipes, a garage door that won’t close, a window the kids broke, a drain that won’t drain, these are just a few of the challenges that arise from time to time.

Having bad tenants are even a larger issue that you will need to deal with. From daily complaints to unpaid or late rent payments are just a few challenges that come with bad tenants. Damage to walls, floors, and other parts of the home can lead to costly repairs and possibly having to hire an attorney to get the people evicted.


Conclusion

Don’t believe everything you see on television about becoming a millionaire overnight in the real estate game. Real estate especially through rental properties can be very profitable and build you a very nice lucrative passive income. While many people can bring in some extra side money having a sole piece of rental property, earning a true living as a landlord will require you to have multiple properties. The work is not for everyone. Those who are willing to pay the price of hard work and pay the price of creating a successful business will be nicely rewarded.

 

 

Posted by Tom in Business, 0 comments
How To Turn A Bad Day Into A Good Day

How To Turn A Bad Day Into A Good Day

Tips on how to turn a bad day into a good day.

Everyone experiences having a bad day now and then. Everyone handles these days differently, some people throw themselves into a pity party and some people makes everyone’s life around them miserable so they won’t be in this rut of a day by themselves. Then there are those that can take a bad day and turn it into a good day. This is what we are going to focus on in this article, some steps that you can take to make your worse day be your best day.

Step 1 – Control your response.

We need to be able to accept the circumstances that we are in at the time. Many of us focus on the negative thing that is making our day terrible and we tend to walk around moping and complaining about how bad our situation is. We need to learn to accept what has been handed to us and change how we respond to the situation and take control of it instead of it taking control of us and our emotions. We can control how our day is going by implementing a positive response no matter what is thrown our way.

Step 2 – Contact a friend.

Sometimes we do not have that internal strength to change our mood from bad to good. We may need the encouragement of a friend to give us that pep talk that we are needing to transform our day. We may even just need a friend to vent too. When I am having a bad day I will drop my wife a text message saying to please call me when she can so I can vent to her. When I am done venting she will offer me some encouraging advice in order to take my sour attitude and turn it into a positive attitude for the rest of the day.

Step 3 – Journal or write.

We need a place to release the negative in our lives. Writing or journaling can be a great tool for releasing these dark emotions. Some people will write out all the bad in their lives on a piece of paper and then burn or tear up this piece of paper. This gives them the emotional feeling of releasing these negative feelings. For others writing your thoughts in a journal or diary is a great way to release your feelings and lock them away in your journal.

Step 4 – Take a break from social media.

Spending too much time on social media can ruin your day. Negativity can run rampant on social media sites. From bullying to politics to negative talk can be found on these sites. We need to clear our thoughts and heads from all the bad found on these sites by walking away and taking a break from social media.

Step 5 – Just say NO!

Most bad days will usually start in the morning or early parts of the day. Many times you have something on your schedule for that day that you are dreading and this negative activity is eating away at your positive demeanor. If this activity is something that can be rescheduled or canceled, do it. It would be better to say no to something than to have this one activity ruin your whole day.

Step 6 – Laugh more.

When my day is heading down the path of being totally negative I will close the door to my office and look for things that will either bring a smile to my face or make me laugh. Laughter can turn a negative day into a more pleasant day. YouTube videos of comedy will usually do the trick.

Step 7 – Listen to positive music.

In my case I have a 45 min. ride home from the office. If my day is bad or has been bad this is the time I spend listening to positive music. Today for example, my day started off at the office with a confrontation with an employee, after that I was being hit from all directions with negative confrontations. I decided to meet my wife for lunch and I had made a mental note that I was not going to bring all this negative vibes to lunch with me. My drive at noon was about 30 min. to meet her so I cranked the positive tunes on the radio and this set me in a much better positive mindset.

Step 8 – All things happen for a reason.

There is always lessons that we learn from the trials and tribulations that we go through in life. If your day never turned around and became positive look for a lesson that you can learn from

 

Posted by Tom in Lifestyle
Another Category 5 Hurricane In The Atlantic

Another Category 5 Hurricane In The Atlantic

Category 5 Hurricane Maria Powers Up for Another Blow to the Caribbean

Maria blew up from a tropical storm into a major Category 5 hurricane in barely more than a day, bearing down on Puerto Rico and other Caribbean islands that are still bailing out from Hurricane Irma.

Hurricane warnings were in effect for Puerto Rico, its satellite islands of Culebra and Vieques, and the U.S. Virgin Islands on Monday. At 8 p.m. ET, according to the National Hurricane Center, Maria was producing maximum sustained winds of 160 mph as it moved within 15 miles of Dominica, an island of 72,000 people in the Lesser Antilles.

Maria was expected to hit the U.S. Virgin Islands by Tuesday afternoon and Puerto Rico late Tuesday into early Wednesday, the hurricane center said. With conditions appearing favorable for “additional rapid strengthening for the next 24 hours and possibly longer,” the agency said.

President Donald Trump on Monday declared states of emergency in Puerto Rico and in the U.S. Virgin Islands, where Gov. Kenneth Mapp suspended all Irma recovery efforts to shift the focus to preparing for Maria. The Coast Guard said it was moving personnel, cutters and aircraft in the U.S. Virgin Islands and Puerto Rico to protect them from Maria and to position them for quick search-and-rescue missions.

The French government declared a red cyclone alert Monday for of Martinique, telling residents to seek shelter and stay put. All flights at Pointe-à-Pitre airport were suspended through Tuesday afternoon at the earliest, it said.

The British government, meanwhile, advised against all travel to the British Virgin Islands, saying it was extending the deployment of more than 1,300 military personnel already in the region to help with recovery from Irma.

Read more of this story: Link

Posted by Tom in Lifestyle
Surviving Hurricane Irma

Surviving Hurricane Irma

Hello everyone, it has been a few rough weeks here in Central Florida. As most of the world knows by now we have been hit with a devastating hurricane named Irma. Many people don’t realize what it takes to prepare for hurricane and what it is like to go through a natural disaster. Well in this article I am going to share with you some of what goes into preparing and riding out the storm.

Now I know it has been a few short weeks since I have posted anything new on this blog and the reason is all my time has been taken up doing preparation work for this storm. I had all my essentials ready for my family to make it through the storm and the many days after while we had no electricity. But in order to ride out a storm like this it takes days to get mentally prepared.

I have lived in the mid-western part of the country where I have been in tornadoes and bad thunderstorms, but a hurricane is much worse to deal with. I will try to explain some of what I am talking about in the next few paragraphs.

First when a hurricane is out in the Atlantic like now there are three between Africa and the United States the little hairs on the back of your neck start to rise and you start watching the weather channel every-day to see where the meteorologist are guessing the storm may go. Once the storm is about 3 to 4 days away from the States then you really start paying attention where the spaghetti models are saying where the storm may make landfall, but still at this point it is still a guess by the scientist. Now with this hurricane Irma the first place the meteorologist were saying it was going to skirt up the east coast of Florida so there was not to worry about for us on the gulf side of the state. Then as the storm was coming out of Cuba the meteorologist changed their predictions and said that the storm was going to hit Miami and go up the east coastal communities of the state. As the day went along which was Friday before the storm hit the United States more changes took place.

After Friday and into Saturday all eyes are glued to the different television stations watching to see where the storm was going to make landfall. At this point the grocery stores, hardware stores, the big box stores, and the gas stations were being inundated with people that were not stocked up with supplies. The grocery stores were mad houses with people purchasing anything they could, the lumber yards were being stormed with people purchasing anything that looked like wood to board up their homes, the gas stations were running out of fuel, and there were no generators to be found at any of the stores. People were in a panic.

Saturday and into Sunday we pretty much knew where the storm was going to hit land and where the track of the storm was going to go. All the roads leading out of Florida were a disaster by themselves. The highways heading north were bottlenecked, the county roads heading north were packed with cars, and the gas stations along all routes heading out of the state were either out of gas or running very low. There were lines of cars trying to get into the gas stations, people were screaming at each other in the lines; at some stations there were fist fights that were breaking out. Highway State Troopers and Sheriff Departments were called into keep order at the gas stations along the state highways. Panic was sure setting in and half the people in Florida evacuated and headed out of state.

By this time our little town was in the projected narrow path or track of Irma. The storm came on land and slid up the Gulf side of Florida and by Sunday evening we were feeling the outer bands of the storm. By 8:00pm we lost power and the rain was coming down in sheets. We still did not have much wind but the rain was heavy. Now living in the mid-west I was use to heavy flooding rains, but rain from a hurricane is nothing in comparison. Around 10pm is when the winds started to pick up and for the next 6 to 8 hours we experienced category 1 and 2 hurricane winds and rain. On Monday we still had rain bands and high winds and wind gust that were still 70 plus mph. The sheriff’s department had setup curfews, so there was no one heading out on the roads on Monday, there was no place to go anyways since no one had power.

Tuesday people were starting to venture out to start the clean up around their homes. The sheriff’s department had lifted the curfew but there still was no place to go since the power was still off for most of the people in Florida. To this day there are still people that do not their power back on, but the power companies have been working non-stop to get the power restored for these people. At our home our electricity was restored this past Friday, 5 days we ended up with no electric, running water, cell phone service, internet, television, or air conditioning. Just remember this is Florida in September when temperatures are still in the mid to upper 90’s, it is not comfortable in a home with no A/C. Thank God our family was mentally and physically prepared for times like this.

Conclusion

I cannot say this enough; families need to be prepared for any disaster man made or natural. One never knows when a disaster is going to hit, you do not want to be the one that does not have their family prepared. I am grateful that we had plenty of food, gasoline, and water in order to take care of my family and my neighbors that were not prepared. Things are getting back to normal for most people in my part of Florida, there are still many that have a long and tough road ahead of them. For many it will be a long time before their lives will be back to normal. Natural disasters like Irma, or Harvey that hit Texas a few months back affects millions of people and here in the United States, the one thing I have learnt from this experience is how spoiled people really are, it is amazing and how un-prepared most people are to any sort of disruption in their day to day lives.

Right now Florida is keeping an eye on another category 5 hurricane in the Atlantic, and it is on the same path as Irma was. The meteorologist are predicting it is going to go East of Florida, but they said the same thing about Irma and they were wrong, we will have to wait and see about this one. I hope and pray that people will learn and get prepared for disasters; I have personally lived through to many in my lifetime not to be prepared. I have lived through tornados, major snow storms where cities were shut down for weeks at a time, lived through 5 hurricanes and witnessed the devastation of earthquakes in foreign countries.

 


Posted by Tom in Lifestyle
Are You Prepared For A Water Crisis

Are You Prepared For A Water Crisis

After a disaster, clean drinking water can by hard to come by or not available at all. Your source of drinking water could be contaminated or you may lose power so you’re well may not work to pump water. Prepare your family by taking some time and build up a supply of water that will take care of your family in times of emergencies.

How Much Water Should I Store

The recommended amount of drinking water to have on hand is at least one gallon of clean drinking water per person for three days. Now a normal active person should consume about three quarters of a gallon of fluid per day. This could come from water or some other form of beverage and it depends on age, health conditions, diet and physical activity.

Take Into Consideration

  • Age of children and adults
  • Health of the people in the group
  • Medical needs
  • Climate, hotter temperatures will require more water
  • If water will be needed for cooking

Tips for Water

  • IF you know an emergency is going to happen, say a bad storm like a hurricane always store as much water as possible.
  • Use water that you know is not contaminated first. If necessary only consume water as needed if you feel the water could be contaminated, just do not get dehydrated.
  • Do not drink caffeinated beverages. Caffeine and alcohol will dehydrate your body and you will waste precious water because your body will need it to get back hydrated.

Treating Water

Living and visiting countries that do not have clean drinking water like the United States I have experienced illness from drinking bad water, and it is not fun at all. Be extremely careful if you feel the water you are going to drink may be bad. There are iodine pills that can be added to the water to make it safe, there are hand filters that you can use to filter out impurities from the water. Boiling water is another great ways to make water safe to drink, if you use this method make sure that you bring the water to a rapid boil and keep it boiling for a good full minute.

Resources

Here are a couple resources that our government and FEMA have put out for us just in case we need additional information on water safety in times of emergencies.

Food and water in emergency

Water Safety

Emergency Supply List

Is your water safe to drink

 

Conclusion

Water is something that we take for granted every day. But having an ample supply of clean water is a top priority. We would love to hear from you on your experiences with drinking water for your family.

Posted by Tom in water

What Are MRE’s And There Alternative

Many people have no clue about MRE’s  / Meals Ready to Eat. MRE’s are specially prepared meals that the military have been using for years and was introduced to the general public several years ago.  Each meal is developed to provide all the nutrients needed to survive but also be easy to transport while on the move. This is why the military still use these meals today for the military personal that out away on maneuvers.

MRE for backpacking or for survival food

MRE’s or other prepackaged meals come pretty much ready to eat, this makes very easy and ideal for many different uses. My family and I use these meals while we are out camping or backpacking out in the wilderness of northern Minnesota. These meals can be eaten cold right out of the package or they can be warmed over a camp fire or be heated by the MRE heater.

I was really introduced the MRE’s about ten plus years ago when Florida was hit with several hurricanes back to back and we had lost electric for over a two weeks. With the different varieties of meal options that MRE’s have one does not get sick of eating the same thing over and over again.

History of MRE’s

A little history on the MRE meals.  In 1963 the Department of Defense (DOD) knew that they needed to come out with a meal for soldiers that was better packaged and had more nutritional value then what the soldiers were carrying during World War II. So this was the beginning phases of experimenting with MRE’s. Then in 1966 the DOD came out with a dehydrated meal plan called LRP or Long Range Patrol Meals, this did not work out to well. In 1975 more work went into developing a dehydrated meal that was stored in plastic retort pouches which went into standard use in 1986 for the military.

Backpacking Meals

Now for me being an outdoor enthusiast I spend many days in the wilderness in the Boundary Water Canoe Area every year. I love the serenity of the outdoors

These options for food are great for backpacking and hiking expeditions.

and love being out in nature. I have found that the ready-made backpacking meals give me the nutrition and energy I need to make it through the days. Being that the food is

dehydrated the packets weigh very little and there is no cooking involved. Just heat some water on the campfire until it is boiling and add the water to the open packet. The meals that I prefer and all natural and contain no MSG Mono Sodium Glutamate which is a preservative that many people are allergic too.

 

Ideas For Food That Are Not Pre-Packaged

A lot of people that I come across while backpacking purchase food from the grocery store that is less expensive and can be lightweight and compact. Here are a few ideas of foods that are lightweight and compact that you may be interested in.

  • Instant oatmeal, comes in many varieties and just need to add hot water and mix to get a great tasting breakfast meal that can be ate at any time of the day.
  • Rice, can be a little heavy but it is easy to make and tasty
  • Pancakes, another meal that just needs hot water and cook over an open fire or camp stove.
  • Pasta, again just need boiling water. Instant spaghetti sauce is easy to make and taste great.
  • Dry soup mixes, a lot of varieties to choose from and just add hot boiling water.
  • Granola bars are easy to carry and gives you the protein to make it through the day on the trail.
  • Coffee packets, must have for the morning. Boil water and add coffee packet for a delicious morning pick me up.
  • Flavored water packets, when you are tired of drinking lake or river water these little packets come in handy for adding a little change in taste.

These are some ideas of food that you can store for when we run into a food shortage or for when a major storm hits and you cannot make it to the grocery store for a week or two. For my family we have about a months worth of food stored. Living in Florida you never know when mother nature may strike and we lose electricity or the roads are blocked and we cannot make it to the store. It has happened to me more than once and ‘I do not like being unprepared.

Posted by Tom in Lifestyle, Off The Grid, Urban Homesteader
Reverse Mortgage For Seniors To Purchase A New Home

Reverse Mortgage For Seniors To Purchase A New Home

Using a reverse mortgage to purchase a new home has been an option since 2009. In 2009 the Federal Housing Administration introduced the Home Equity Conversion Mortgage for Purchase (HECM), which makes it easier for seniors to purchase a new home for themselves. While the overall number of these transactions and of Americans who are reaching retirement age continues to increase, the program has been underutilized. This is a great option for seniors that are looking at owning their dream home before they pass.

How Does It Work

A reverse mortgage for purchase combines a purchase with a reverse mortgage. In these cases, a homeowner has to be at least 62 years old. This streamlined process eliminates closing costs, helping make the acquisition of a new home, condo, or FHA-approved manufactured home faster for them. On the other hand, the buyer must be able to afford property taxes, homeowners’ association dues if any, insurance premiums, and other property expenses. Most of the time the buyer is use to paying these items since they have owned a home before. Many seniors use the HECM to facilitate the purchase of a new place to live without the taking on monthly mortgage payments which can be great for people on a fixed income.

While the reverse mortgage for purchase seems like an attractive alternative to conventional financing, there are a number of factors that a potential buyer should take into account before signing on the proverbial dotted line.

Down Payment

The purchaser is required to make a down payment. Often, this can be as much as 50% of the purchase price. The reason for this fees is that there is no equity in the new home purchase. It is this equity that is used in lieu of monthly payments. Additionally, these funds cannot be borrowed but can come from the sale of existing property, savings accounts, or other sources of investments or financial accounts.

Cost Factor

Using this method to purchase a new property can be complex. Homeowners will still be required to pay taxes, keep the required insurance, and maintain the parcel in order to prevent foreclosure by the lender. Because there are no monthly payments, the overall balance is higher and compound interest accrues.

Additionally, if the borrower lives long enough, the underlying equity supporting the loan could be exhausted, which may result in a demand to repay the loan early. Individuals considering this type of financial move are required to receive mandatory free counseling from a third party or agency approved by the Department of Housing and Urban Development.

Is This The Right Step To Take?

As the economic climate continues to change and evolve, options, such as the reverse mortgage for purchase, may be a viable way to find a new home. It is important to remember that this may not be right for everyone. Doing the research first and defining one’s objectives is an important step in the process to ownership. Also make sure you talk to an investment  or real estate attorney and asking their advice before signing any documents.

 

Posted by Tom in Finance
Ways To Save Money When Renting

Ways To Save Money When Renting

Homeowners have many privilege of being able to save money and receive some great tax benefits for owning a home, but what if you’re a renter, what can you do to save money? We will take a look at what a renter can do to save some hard earned money even if they do not own a home.

There are many people these days that do not have the time to own a home because they are so busy with work and their personal lives, in return many people are opting to rent either a home or an apartment instead of owning a house. In this article we will take a look at some ways renters can save money just like a home-owner does.

  • Location Is Always Important

These three words are always the most important words when it comes to real-estate. It does not matter if you are purchasing or renting location is extremely important. For a renter long commutes can eat up your finances. For example, in our nation’s capital or any big city commuting to work is a nightmare and can be very expensive. Renting an apartment close to where you work will save you both time and money.

  • Budget your housing

We all want to be able to live in a luxury apartment, but most of us cannot afford this type of lifestyle. You need to sit down and figure out what your budget is going to be for housing and then spend a little less than what you can afford. Make sure when you are looking for a place to rent do not go above what your budget is telling you what you can afford. If in the future when your income increases then it will be time to upgrade your apartment lifestyle to something more luxurious.

  • Lease Options

When dealing with leases you can save money by talking to the landlord to give you a long term lease, usually two or three year lease. The longer the lease, usually the rent will be less. This is a great option for both you and the landlord. The landlord will save money in the long run because he or she will not have to worry about cleaning and painting the property to get it ready to rent again for two or three years. This is a win win for both you the renter and the landlord.

  • Purchase Renters Insurance

This may sound like an expense, but if you have ever rented it is well worth the cost. Renters insurance will protect your personal belongings from theft, fire, and water damage. The cost of the policy is very inexpensive. Example, you live in a two story apartment building and the tenants in the upstairs unit floods their bathroom and water comes through the ceiling and floods your apartment and all your furniture is ruined. This example happens to a lot of renters, so the cost of this little insurance policy is well worth the cost and it will save you a lot of money.

  • Purchase Inexpensive Furnishings

When decorating an apartment do not spend tons of money of furniture, and whatever you do avoid rent to own stores (they are a rip off). The best thing to do is get creative, spend some evenings on Pinterest getting ideas of how to decorate on a budget. When your finances do grow or you get married and have two incomes or you purchase a permanent home, this is the time you will want to invest in good furniture. But for now, shop thrift stores and garage sales for inexpensive furniture that you can make work for you and your budget.

  • Cut Energy Cost

A lot of talk on blogs about homeowners cutting back on energy cost to save money, but renters can do the same thing. Here is a list of a few things that you can do as a renter to cut cost and save money.

  1. Turn lights out when leaving a room.
  2. Turn the A/C up when not home or have a programmable thermostat installed.
  3. Change out the lightbulbs to LED bulbs.
  4. Check the water-heater temperature setting, if to high turn down the setting.
  5. Install ceiling fans in the bedrooms to help keep the room cool.
  6. Wash dishes by hand instead of using the dishwasher, this will cut utility cost.
  7. If not using various rooms, close off the heat and A/C vents.
  8. Hang your laundry to dry instead of running the dryer, most appliances in rentals are not energy efficient.

These are just some ideas that can help you as a renter save money by cutting back on your energy cost.

  • Get Rid Of Cable

The cost of cable is going through the roof. I have basic cable and Internet and my bill is over $140.00 a month. If you’re living from paycheck to paycheck the high cost of cable is something that I would seriously look at cutting. Most of us today need to have some-sort of Internet service, shop around and try and find the best deal, cable companies are not always the cheapest way to get Internet.

  • Rent Near Public Transportation

Many renters live in big cities that offer public transportation. If you are one of these renters than you will want to make sure that you rent within walking distance of public transportation. A person can save a huge amount of money if you choose a location to rent that doesn’t require you to own an automobile. Many apartment complexes charge exuberant fees for a parking slot to park your car. And of course you will be saving money on fuel, insurance, car payments or lease payments and maintenance and repair cost for the auto.

Conclusion

Homeowners are not the only people that can save money by cutting cost of living. These few ideas that I have mentioned above can definitely help get you on the path of saving money if you are a renter. We would love to hear other ideas from renters out there that they do to save money.

Posted by Tom in Budgeting, Finance
Finding Financing For Real Estate

Finding Financing For Real Estate

Getting Financing for Your Investment Property Or Your Renovations

Financing For Real Estate

There are countless ways to make money in real estate, all which require skill, foresight and preparation and some hard work. A renovation is no different. Whether your project is a purchase to flip, repairing a rental property or improving your personal residence, there are a few things to consider which we will go over in this post.

First, you must ask yourself whether injecting any money into the property will actually increase its value. To answer this, you need to understand your market. This requires becoming an expert on property values in your neighborhood through sales comparable and so good old research.

You must know:

  • What properties are selling for in your area?
  • How long properties have been on the market?
  • When a property sells did they get asking price?

For us, what we have recently been doing is looking at current comparable’s and tax  assessments to get a better picture of property values for my area. Sometimes finding direct comparable’s is tough. It is always best to find out what the selling price per square foot is going for in your market.

When working and purchasing rental properties I highly recommend doing repairs on rental units in order to keep happy tenants, but tackling a fix and flip or renovating your home for profit must be considered carefully prior to commencement.

If the numbers look good and you decide to move forward, the next step is creating a specific “game plan” for the renovation. Understanding exactly what to fix and what not to fix will give you the biggest “bang for the buck.” Typically the kitchen and main bathroom, including sinks, counter-top’s, fixtures and flooring will provide the most upside. Painting the entire house, both inside and out with a neutral color provides a “flow” to the house and paint is more affordable when you buy a large quantity of the same color.


Landscaping is another area which is relatively inexpensive, yet adds a lot of value and “curb appeal.” The property may also require larger improvements such as windows, roof or furnace replacements, however it is often difficult to justify these amounts of renovation dollars unless your calculations still allow a profit.

To gain perspective on properties in your area, it is important to check out other houses in the neighborhood and understand to what degree people are renovating. This is easily accomplished by visiting open houses or buy checking building permits that are being pulled in local neighborhoods.. Never make the mistake of renovating to a standard that is higher than that of the market.

If the “fix and flip” model is a little too daunting, a very affordable, slow and steady strategy is to renovate your principal residence for profit. Once the renovation is complete, you have presumably increased the value. The next step is to refinance the property and use the capital to purchase another property and repeat the process. This is a great way to begin building a portfolio. Remember, you can continue to purchase with as little as 5% down, move in, renovate and repeat. Make sure you are buying properties that will gain profit once you move and continue the cycle. By repeating this process, many people ultimately wind up in their dream home, often with a fair amount of equity.

You may simply want to renovate your home to make it more energy efficient or accommodate a growing family or just bring a new look to the house. Either way, strategic renovation comes into play.

As a side note, there are many government grants and rebates available for a number of these renovations that will add to your savings on your renovations.

Before you jump into buying supplies and hiring contractors, ask yourself the proverbial question… how are you going to pay for this renovation?

The first thing to do, whether you are paying with your own cash or intending to get a loan, talk to a financing specialist, A good financial adviser will be able to help you understand your options and pre-approve you for a specific amount of money needed for your renovation, fix and flip or your next purchase. Let’s look at some of the options to consider.

Cash

If you have saved adequately, use your own funds. Make sure the cash outlay won’t overly affect your ability to qualify for your next property or affect your cash flow. When choosing to cash in an investment such as a stock or mutual fund to do the renovation, measure the loss amount it could be making in interest and include any early redemption fees versus the amount of interest paid on the renovation loan.

Credit Cards

The convenience of plastic allows the renovation to begin immediately rather than waiting for a loan approval. Remember to pay them off quickly or be faced with high interest rates. Be careful not to carry a high balance relative to your limit as this can significantly affect your credit score.

Credit cards from one of the big box stores can be an option. Some of these stores have been known to offer zero interest charges for 6 months. Again, consider your ability to pay off the card quickly as well as the credit bureau “hit” when considering any credit card.

Unsecured Personal Line of Credit

An unsecured “personal line of credit”  could be just the thing to pay the renovation costs. Banks give an unsecured personal line of credit based on a favorable credit bureau, confirm-able income and an amicable history with the bank. These vehicles allow the borrower to pay off as much as desired at any time. They are available in fixed rates but are more commonly offered with variable rates.

Secured Line of Credit

A secured line of credit, commonly known as a “home equity line of credit or HELOC” is a lower interest way which lets a homeowner use the equity in their home to borrow money, where the home is used as security. This allows payments that can be as low as interest only. You can pay as much as you want above the minimum required payment.

You can access up to 80% of the appraised value (or purchase price) of the home and as you pay down the outstanding balance, the available credit increases. Most lenders will allow a conversion into a lower fixed rate mortgage.

Bank Loan

A bank loan is perhaps the simplest way of financing your renovation. Payments on the loan will be withdrawn at regular intervals from your bank account to repay the loan. Just like a mortgage, if you can pay down the principal faster, you pay less interest. Therefore arrange your payments for a bi-weekly or weekly payments.

Refinancing Your Mortgage

When you refinance a mortgage, use the existing equity in your house to increase the mortgage amount up to 80% (or more based on the lender and insurer’s approval) of the home’s appraised value. This enables the mortgage payments to be spread over a longer period of time which take advantage of lower mortgage rates, ultimately resulting in lower payments than a PLC or HELOC.

There are costs involved which may include appraisal fees, legal fees and possibly a penalty for breaking the mortgage. Crunch the numbers and determine if this makes sense against other options available.

 

Second Mortgage

Depending on the amount of equity in the property, a second mortgage for renovation can be acquired in the form of an equity based 2nd mortgage. This is typically repaid over a shorter time period than a conventional mortgage. A second mortgage can be acquired from private lenders or many “B” lenders and will be registered as a second charge behind the first mortgage.

Many second mortgages commonly have higher interest rates as well as lender, broker and lawyer fees which are often paid upfront as a deduction to the mortgage advance. Second mortgages typically have a term of one year with interest only payments, although an open 2nd mortgage is possible.

Joint Venture Partners

Joint venture partners can become money partners, mortgage qualifiers, bird dogs or fix and flip partners. Whatever level you are at, just make sure that you partner with someone who is involved full time in real estate that can help you gain knowledge, experience and profit.

In closing, make sure to crunch the numbers and carefully consider the amounts you will pay for these loans, mortgages, credit lines or partnerships as compared to the potential profit or equity value you expect to gain from the property, prior to deciding to move forward with any renovation.

Posted by Tom in Business, Finance
Attitudes For Successful Money Management

Attitudes For Successful Money Management

Attitude of Successful Money Management

Do you really need to learn money management or do you need to learn a new attitude about your money? Where did you learn your ideas about money? Probably if you’re like most, you learned what your parents taught you. Maybe your spouses’ money habits and concerns have rubbed off on you. Most importantly, how will yours rub off on your children? Before you can teach money management to your teen, what do your words and actions say? If your children use the same techniques for money management in 20 years, will they be headed toward success or disaster? Maybe it’s time you rethought this love/hate relationship with your old friend, money. Maybe it’s time you adopted some successful attitudes; such as:

Have A Attitude of Gratitude

So often, as parents we give our children this line when there are complaints about what’s for dinner, who got what toy or got to sit in which seat. We say, “Stop complaining and be grateful for what you have,” or something to that affect. If it’s become rote, more than likely what you’re really saying (which is what your child is hearing) is “Shut-up and stop complaining,” which amazingly enough, doesn’t sound grateful at all, does it? The way we teach our children to be grateful is by being thankful for what we have and expressing it regularly; and no other topic comes to mind so regularly as money. Are we thankful for our good health and yet whining about our paycheck or our taxes? The more grateful we are for what we have, the more we’ll have to be grateful for.

Have a Attitude of Respect

We’ll spend time teaching our kids to respect their elders, respect our rules and have respect for themselves, but too often respect for money gets pushed aside. There seem to be 2 schools of thought, neither of which are respect; fear or disregard. If the budget rules your house with an iron fist and every penny is squeezed, you are passing down a fear of money to your child. If money is so scary that it controls even Mom and Dad, the most powerful people in the universe, it must be bad. Total disregard of the finances is just as bad. A lazy attitude of, “Oh the mortgage will just be late and I have no idea how we’ll pay for the credit card, but we’ll stop thinking about that once we go shopping,” teaches disrespect for money, which will translate into lack of money later in life.

Be Joyful

Money is fun and if you’ve forgotten that, let me remind you. There was a time; maybe a long time ago, maybe you were still a child that you suddenly “came into” some money that you weren’t expecting. There it was, a whole $20 and you couldn’t believe how great it was and started right away imagining all the cool stuff you could buy with it! Why should you give up that joy as an adult? Spending money is fun and when you give with love and an open heart, not only is it fun but you are making abundance possible in your life. Spending money begrudgingly and reminding your children and spouse about how much they “cost you” every time you leave the house not only stops the abundance coming into your life, but makes you a killjoy.

Show Interest

How much do you really know about money? We all know that in order to have a good relationship with our spouse, we have to communicate. We have to find out what makes them tick. We have to get to know them. We know as parents that we need to know our child’s interests and spend time growing those talents. We are successful at what interests us because we automatically take the time to find out more. So wouldn’t that apply to our money as well? How can expect to have a great relationship with your money if you don’t know the first thing about it? When the only time you spend with money is that dreaded day of the month where you grip the checkbook, hope for the best and pay the bills, how can you really know what makes your money tick? Get involved with your money and invest the time in finding out more. Get your family equally involved with the finances. If one spouse handles all the money, the other one should still know the essentials of what this family is doing with finances. Your family budget, the one your kids know exists but never find out why or how it works, is a “family” budget. Take the mystery out of your money and spend time with it.

Understand the Value of Money

Understanding the value of money goes beyond, this is $10, it’s worth $10. How you value yourself and your personal values in life are expressed through your value of money. Are you spending every waking moment in a desperate attempt to keep up with the Jones’s? Are your kids always dressed to impress even though they’d rather be just comfortable? Is it not good unless it’s the most expensive? These are all ideas that scream, “I am not enough, not valuable without money.” Is that what you want your children believing later in life? On the other end of the spectrum we have those that never buy anything new, their house is in desperate need of repair, their children live in hand-me-downs and they’re not satisfied unless they got “it” the cheapest that they could get. They even love to brag about how little everything they own cost. Are you really being frugal or have you taken the “we don’t deserve nice things” and made it a lifestyle? Are your feelings of self-worth controlling your money habits? And if so, what kind of value are your children seeing?

6. An Attitude of Confidence

Obviously if you are married with children, fear of the unknown doesn’t really faze you. You walked down the aisle despite what the statistics told you that the odds were. You had children and are raising them in the face of awesome odds. Look at you – you’re doing it! So why, when we’re brave enough to face the challenges of marriage and parenthood, do so many of us figure that money is totally out of our control. We can trust God with our kids, but money is up to fate, luck and maybe the lottery. We can count on our spouse to be with us through sickness and through health but we can’t count on ourselves to be “good” with money. We’d start that business if we had the money. We’d buy that stock if we had the money. Confidence with money comes from the knowledge that you come from abundance. There is plenty more where that came from. Being bold is the only thing that’s going to take you from struggling to success. Are you passing down an entrepreneurial spirit? Or are you going to whine about all the missed opportunities? Will your kids?

Be Ethical and Honest

Are you honest with your family about the finances? Isn’t it amazing that as a parent, you can expect your child to be truthful about why they got in trouble, and yet cheat on your taxes, feeling somehow that you’re entitled? Why is it that we expect our spouse to tell us every little thing that happened at work that day but what’s going on with the checking account is a big mystery? Do you talk about your salary like you talk about that 6-foot fish you almost caught? What’s your money story? And if it’s not a good one, or it doesn’t have a happy ending, what’s the moral of the story for your kids? If the truth shall set you free, how free are you financially?

When you think about the relationship you have with one of your old friends, or the relationship you have with your spouse when things are going really well, what are you doing to make that relationship a success? Of course you’re grateful for the time the two of you spend together. You have a deep respect for that person and you feel a joy when you are with them that always brings you back for more. You are extremely interested in what they’re doing and find their ideas and feelings to be fascinating. You value their ideas and opinions and love knowing they value yours. You are confident that the future of your relationship is going to be even better than the past. And you would never dream of dishonoring that relationship by being anything less than truthful.

If you became friends with your money, would you need to manage it? Growing a relationship with your money is not only key to your own success, but a vital part of teaching your child to reach for their own financial freedom.

 

Posted by Tom in Finance