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When putting your home up for sale, the waiting game is one of the hardest parts. Regardless of the reason behind the decision to sell your property — be it because you’ve already found your dream home, want to move to a new city/area, or simply downsizing — earning money from the transaction as soon as possible is always preferable.

Plus, it’s never easy saying goodbye to a place you’ve called home, where you and your family have spent wonderful moments together and that will be forever etched in your memories. So why prolong the melancholic goodbye?

Fortunately, there are things you can do to improve your home’s chances to sell fast without having to shell out a considerable amount of money. Often times, doing things in the right order can help us save lots of time and effort, not to mention unnecessary stress. It isn’t much different when selling your home.

So to make it easier for you, we’ve turned to industry professionals for a little guidance on how to prepare your house for selling. Here’s what most of them agreed would speed up the sale of your property.

#1 Work with a Realtor

Sure, it’s the age of the internet, and every service can be accessed online, who needs a real estate agent to hold their hand? But as most industry professionals will tell you, that may not be applicable in the case of real estate transactions — especially when selling your home, which is arguably your biggest financial asset.

Pricing your home, listing it, distributing the listing to make sure it appears on websites people actually use when looking up homes, scheduling property tours, and handling paperwork are just some the biggest aspects of a home sale. The list goes on an on, so better put it in the hands of a professional that will know to pay extra attention to crucial aspects of the deal.

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Realtors know the ins-and-outs of the industry and have inside knowledge of your area. Real estate agents have already built up their contact list, from potential buyers to contractors who can help you do minor repairs in your residence, and will easily manage all the paperwork involved in the sale.

While some real estate agents require a deposit for their service, most realtors go by a commission-based payment system. This means that they’ll only get paid when you sell your home, which motivates them to help you find clients and close deals quickly — and for the highest $$$ amount possible, as that will lead to a higher commission for them too.

#2 Enhance your home’s curb appeal

Curb appeal pertains to the attractiveness of your home from the outside. It extends to the entire front of your house, including your lawn and how other trees or bushes frame your residence.

The point of enhancing your home’s curb appeal is to make the exterior more tempting to potential buyers. After all, it’s their first interaction with what could be their future home, so you’ll want your house to make a great first impression. The idea is to make it appeal to them as soon as they make the curb.

A few tips to boost the curb appeal of your property include:

  • Adding some greenery – One of the best ways to enhance the exterior of your property is to plant some flowers and plants. You don’t need to overhaul your lawn and start a garden. You can draw potential buyers’ eyes toward windows and entryways with planters and window boxes.
  • Tend to the lawn – Never has maintaining a well-kept lawn mattered more. Make a point out of regularly mowing the grass, raking off any unwanted leaves, and pulling weeds out when planning to put your home on the market, as it will significantly increase its curb appeal.
  • Clean the gutters – The gutters are a visible yet often neglected part of the home. When putting up your property on a listing, make sure that you give these attachments a little TLC by clearing up debris and scrubbing the outside.

#3 Improve the front door area

We’ve already established how important first impressions are when selling your home. And your front door plays a huge role in landing that great first impression. If you don’t think it’s sufficiently appealing already, know that it doesn’t take all that much to upgrade your front door.

You can do this by coating your front door with fresh paint, adding some décor, and even putting a welcome mat right with a memorable message to welcome buyers.

For the interior, you must clear the entryway and draw the eye of clients inward through strategically placed furniture as well as accessories.

#4 Declutter and de-personalize

One of the top ways to increase the value of your home is to free up spaces in key areas of your residence. This includes the living room, kitchen, bathroom, and even the bedrooms. Declutter and get rid of all extra items that don’t add to the aesthetic appeal of your property.

Depersonalizing your space is also a crucial aspect of home-selling. The buyer must be able to envision themselves living in your residence, which is difficult to do if they see your pictures and other personal items lying around.

#5 Stage your home

Home staging is the process of restyling and refurnishing your property to boost its attractiveness in the eyes of potential buyers.

More often than not, the furniture and other things that you’ve accumulated through the years show off your personality. However, as mentioned above, you should depersonalize your space to let the new potential owners imagine themselves living there, which might mean changing up the position of furniture and even replacing some of it with items that have a more unified design.

Tips to keep in mind before selling your property

1. Partner with an investment property buyer 

Remember that sellers have the financial responsibility to pay closing costs such as state and property tax, and real estate agent professional fees. By partnering with an investment property buyer, you can sell your home for a non-deducted or full cash offer. 

2. Avoid common home selling mistakes 

Sellers usually make the following mistakes when selling their homes: 

  • Getting overly emotional: Of course, your lovely home is now for sale, and it’s okay to feel bad about it. However, don’t let your emotion ruin your selling tactics. Just imagine how motivated and excited you were when you first saw your dream home, and your potential buyers might also feel the same. Staging your home or changing its appearance can create an emotional distance since the house looks less personal. 
  • Not hiring a real estate agent: While you want to avoid paying an agent commission, hiring a real estate agent is the best way to get the best deal for your home’s value. An experienced real estate agent will prioritize your best interests and make sure that your house will have a competitive selling price. 
  • Poor listing photos: Good listing photos will draw potential buyers to check your house for sale. Take clear and crisp photos with plenty of natural light to show your home’s true beauty using a wide-angle lens. Hiring an experienced and professional photographer is a good idea to highlight the best features of your home and also get expert advice on how to stage the rooms for better viewing. If you’re working with an agent, this is something they can coordinate for better results, especially since they probably already work with professional photographers that specialize in listing photos (and can include drone shots of your home).

3. Set the right price

It’s tempting to set a high price ceiling for your home. After all, it’s the fruit of years of hard work. However, you have to consider the price point of houses in your area, the features your house offers, and its strengths and weaknesses. If you want your house to sell fast, set a competitive price for your home, instead of a higher price that potential buyers can negotiate. Remember that price is one of the key criteria home buyers use when searching for listing online, and if your home is out of their budget, they won’t even get a chance to considerate it.

Final thoughts

You can sell your home fast by working with a professional realtor who can guide you throughout this journey. Enhancing the curb appeal of your house, improving the front door area, decluttering, depersonalizing, and staging your residence are just some of the ways to help you get your property listing off the market quickly, but covering these crucial aspects of your home sale will make the process go smoother and will likely result in a faster sale.

More tips for your fancy home

Hearing Colors? Here’s What Colors to Choose in Your Home Based on Your Taste in Music
These are ‘Queer Eye’ Bobby Berk’s Top 6 Choices for Wall Décor
10 of the Most Stylish Minimalist Wall Clocks You Can Buy on Amazon
6 Smart Home Devices to Keep Your Pets Safe, Well Fed and Entertained While You’re Away

Source: fancypantshomes.com

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Your monthly car payment might be your biggest automotive expense, but it’s not the only one. Insurance, repairs and fuel can add up to hundreds of dollars per month, depending on your situation. These ownership costs are sticky — you’ll keep paying them even after you make your last car payment, or if you buy your car with cash.

Car prices

The average sale price for an electric car was $58,385 in February 2023, according to Kelley Blue Book. That’s about $13,000 more expensive than the average gas-powered, new non-luxury vehicle.

Lower-cost EV options do exist: There are a couple available with a range of at least 200 miles for less than $30,000 and a few more for less than $40,000. EV tax credits can bring your total costs down — if you and your car qualify. These tax credits even apply to used EVs that meet similar qualifications.

If you plan to purchase your EV with financing, check whether you qualify with lenders who offer loans tailored for EVs. These loans can come with rate discounts and additional features, like financing for a home charger, though an applicant may find a better rate elsewhere.

Charging costs

Most people can probably save money on fuel costs compared to gas-powered vehicles. To maximize your savings, you should:

  • Charge at home instead of at a public charging station.

  • Check the rate schedule from your electric company and charge only at off-peak hours.

  • See whether a place you shop or your workplace offers free or discounted charging options.

For example, adding 200 miles of range to a Tesla Model 3 costs $7.50 using the charger that comes with the vehicle, assuming the national average of 15 cents per kilowatt-hour for residential locations. The ultimate cost to charge your EV depends on factors including the type of car you drive and your electric rates.

At-home charging

Unless you have access to free charging, the cheapest charge you’ll find is at home. You can plug into a regular outlet using a Level 1 charger, but that only adds about 5 miles of range per hour. Plus, you’ll probably be plugged in constantly when you’re home, which means charging during peak rates.

The U.S. Department of Energy says installing a Level 2 charger at home can cost between $2,000 and $5,000. Your total could be lower if, for example, your home’s electric panel doesn’t need upgrading and if access to your changing location is straightforward. State and local incentives can also bring this figure down.

In some cases, new cars come with Level 2 chargers included, and some even include free installation.

Public chargers

If you’re traveling long distances, you’ll almost certainly want to use a public charger. Charging from almost empty to full can take eight hours at home. With a Level 3/DC fast charger at a charging station — the fastest EV charger — it could take 30 minutes.

That’s still much slower than filling up with gas, however. Using that time to eat a meal, for example, is one way to avoid sitting around. But charging stations aren’t always adjacent to amenities.

🤓Nerdy Tip

When mapping a long-distance route, use an EV-specific mapping service, like EV Navigation. These services can create routes that take into account your car’s range and any amenities you’d like when you stop to charge.

Charging on the road is also more expensive than charging at home, though possibly still cheaper than gas. For example, adding 200 miles of range to a Tesla Model 3 at a price of 40 cents per kWh would cost $20.

You can also find Level 2 chargers that are available for public use. Although slower than Level 3/DC fast charging, these make up the majority of public chargers. Level 3/DC chargers tend to cluster around interstate exits. In contrast, you can find Level 2 chargers in a variety of public places, including restaurants, hotels and parking garages. It’s an easy way to add a few miles if your car is parked for a few hours anyway.

Maintenance

Electric vehicles generally have lower maintenance costs than gas-powered cars. Without an engine, there are fewer parts that can break. You can also say goodbye to oil changes, and your brakes should last longer. A 2020 Consumer Reports study estimates the average EV’s maintenance and repair costs to be 3 cents per mile driven over the course of its lifetime — half the cost of the gas-powered vehicle average. New EVs, which need less maintenance, are cheaper to maintain, at 1 cent per mile driven on average.

There are also downsides. Some EV owners report tires wear out quickly, possibly due to the battery’s weight. Some people worry about the cost of a new battery. True, it’s expensive if you need to replace it, but that worry might be overblown. Batteries are typically covered by warranty for eight years or 100,000 miles of use and will likely last much longer. The battery issue that might be more concerning is that maximum range typically declines with use, even if you follow care instructions perfectly — just like the battery on your phone.

Taxes and registration

Taxes are unavoidable for car purchases — whether gas or electric, used or new — unless you live in Alaska, Delaware, Montana, New Hampshire or Oregon.

Taxes might be familiar, but there could also be additional fees when you register the vehicle in your state. Thirty-two states now have EV-specific fees to offset reduced gas-tax revenues, according to the National Conference of State Legislatures. These fees, which are between $50 and $200, fund transportation projects, including, in some states, charging infrastructure.

Insurance for EVs might be more expensive than for gas-powered cars. Higher vehicle costs and complex equipment that lead to expensive repairs are the culprits, according to the auto insurer Progressive. State Farm’s website states that potential damage to the battery, even in otherwise minor collisions, can be costly, and there are fewer technicians trained to repair them.

Source: nerdwallet.com

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Last Updated on February 25, 2022 by Mark Ferguson

When considering either a 15 or 30 year loan for investing, most people choose the 15 year loan. 15-year loans may appear to save money over 30-year loans because they have a lower interest rate, but I would much rather have the flexibility of a 30-year loan. Buying rental properties is a great investment, especially when you are able to use a mortgage to buy the properties and still get great cash flow. Many investors will get a 15-year mortgage because the rates are a little lower and they can pay off the properties quicker. I use a 30-year loan when I buy my rental properties because I get more cash flow and I can make much more money buying more properties than I can be paying off loans.

Why is a short term loan better?

The biggest advantage of a 15-year mortgage is the interest rate is less than a 30-year loan. The difference in rates changes daily and varies with different banks, but a 15-year loan is usually about .5 percent less than a 30 year fixed mortgage. With a lower interest rate, you are paying more towards the principal and less towards interest.

Some people think the biggest advantage of 15-year loans is the shorter length of the loan. I don’t agree because you can pay a 30-year loan off early if you want too. You will have a higher interest rate, but .5 a percent is not a huge rate difference, especially when you consider how much you can make buying more properties.

Are mortgages front-loaded with interest?

A lot of people want to pay off their loans faster because they think the interest is front-loaded on a mortgage. That means you pay more interest at the start of the loan compared to the loan amount than you do at the end of the loan. The truth is you do pay more interest at the beginning of the loan, but not because the interest is front-loaded, but because the loan amount is higher. If you have a 5% interest rate on your mortgage, 5% of your payment is paid to interest. You pay less money to interest as time goes on because the loan amount decreases.

How much do you save with a lower interest rate?

If you get a 15 year, $100,000 loan on a rental property at a 4 percent interest rate, the payments will be $740 a month (check out bank rate mortgage calculator for calculating mortgage payments). Over the 15 years of that loan, you will pay $33,143 in interest. With a 30 year loan at 4.5 percent interest, the total amount paid in interest over the life of the loan will be $82,406.

On the surface, it looks like you are saving almost $50,000 by getting a 15-year loan. However, you are paying interest over 30 years on one loan and over 15 years on the other, which is deceiving. The payment on a 30-year loan is only $507 a month, which is $233 less a month than the 15-year loan. If you were to take that $233 a month and put it back into the 30-year loan each month, the 30-year loan would cost $39,754 in interest and be paid off in less than 17 years. It definitely costs a little more to have a higher interest rate, but over 15 years that is only $550 more each year. As time goes by that money is worth less and less due to inflation.

I go over specific numbers on 15 versus 30-year loans in the video below:

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Why do banks push 15-year mortgages?

You may hear banks and lenders push 15-year loans on the radio and social media all the time! I always wonder if the 15-year loan is so much better for consumers and worse for banks, why are the banks trying to convince people to get 15-year loans? There are a couple of reasons.

  • The banks want people to refinance their loans because they make more money every time someone gets a new loan. You pay 2 to 5% in closing costs on a new loan and the bank or lender gets most of that money.
  • Most banks do not want their money locked up for 30 years. There is a reason they offer a lower interest rate on 15-year loans because they want more people to get 15-year loans. 30 years ago interest rates were more than 10%! Now they are less than 5%. The banks know that the lower the rate is, the shorter-term loan they want. They don’t want their money tied up in long-term loans.

The banks and lenders push 15-year loans because they make more money with short-term loans.

Is a 15 or 30 year loan better?

You will pay less interest on a 15-year loan than a 30-year loan. However, you are paying a higher payment every month on the 15-year loan. If you add up the payment savings with the 30-year loan, you save $2,796 each year and $41,940 over 15 years by getting the 30-year loan.

That extra money can be used for many things that will make you much more money than that $6,000 in interest you save. You can save up the cash flow to buy more rental properties. You can use the money to build an emergency fund. You could also pay extra to the mortgage and if you ever need the extra money later, you can stop putting extra money into the mortgage.

If you have nothing to invest that money into, it might make sense to get the 15-year loan. If you want to keep buying rentals and build your empire, the best bet is to get a longer-term loan and buy as many rentals as you can now.

Something else to consider is that inflation makes money worth less in the future. The graph below shows how much more money a 15-year loan costs you at the beginning of the loan when inflation is considered. It takes until year 24 or longer to start saving money with the 30-year loan.

It takes more than 24 years before you start saving money with a 15-year loan when inflation is considered!

Why does a 15-year loan make it harder to buy more rentals?

Another huge factor when considering whether to use a 15 or 30-year loan, is qualifying for more properties. When banks qualify an investor, they will look at debt to income ratios. A 15-year loan will have a higher payment and increase your monthly debt payments. The higher your loan payments are, the less cash flow you will have, and it will be harder to qualify for new loans. Many banks will only count 75 percent of your rental income when qualifying an investor for a loan. Even if you are cash flowing with a 15-year loan, if you can only count 75 percent of the rental income, you may show a loss each month. If you have many rental properties showing a loss, it will be very hard to qualify for new loans.

A 30-year loan with its lower payments will make it easier to qualify for more properties.

What if you cannot get a 30-year fixed-rate mortgage?

I own 180k sqft rental properties and it is really hard for me to find fixed-rate mortgages. I use a local lender and they do not offer 30-year fixed-rate loans, only ARMs.

When I finance my rental properties, I use 30-year ARMs. An ARM is an adjustable-rate mortgage that has a fixed interest rate for a certain amount of time. The interest rate on an ARM can adjust up or down after the fixed time period is up. My portfolio lender offers 5 and 7-year ARMs with a 30-year amortization. The rate will stay the same for the 5 or 7-year term but can adjust after that term is up. There are limits on how much the rate can adjust each year and a ceiling that it can never go over. The great part about ARMs is they have a lower rate than a 30 year fixed rate loan and even the 15-year fixed-rate loan.

If you get an ARM for your rental properties you will have an even lower payment than a 30 year fixed rate loan and save money in interest costs over a 15-year fixed-rate loan. To me, it is the best of both worlds.

Why is an ARM less risky than you may think?

There are obviously some risks involved with an ARM because the rate can go up after 5 or 7 years. I always have plenty of reserves and cash flow to make sure I can afford the higher payment if the rates adjust. Even if I hold the loan well past the initial fixed-rate term, it takes a few years for the ARM to become more expensive than a fixed-rate mortgage. Chances are rents will increase in the time period as well. If you have enough cash flow and a plan for when rates could increase, you should have no problem with an ARM.

If you don’t have enough cash flow and your payments go up, you could get into trouble with an ARM. Negative cash flow is hard to sustain and it will make it harder to qualify for loans as well.

Many lenders will also only offer ARM loans after you have a certain number of mortgages in your name. I would suggest getting the fixed-rate mortgages when first starting out, and as you advance in your investing career look at the ARM option.

Why is a lower payment more important than a lower interest rate?

ARMs allow a small payment at the beginning of a loan and possibly a higher payment in the future. The nice thing about the lower payment is you have more cash flow and inflation comes into play when you are investing money. If you can pay less money now and more in the future it is a good thing, because inflation will make money worth less in the future. Even though your payment might go up on an ARM; 5 or 7 years later that money will be worth less and your rents could have gone up. If you use the money you save on an ARM to invest in more rental properties or something else with a decent return, you will be way ahead than if you had paid a higher payment with the 15 or 30-year fixed loan.

Why is a 30-year loan safer than a 15-year loan?

Many people have a tough time saving money and the higher your mortgage payment is, the harder it will be to save. Having an emergency fund is very important for financial stability. If you do not have an emergency fund, do not get a 15-year mortgage. Get the 3o-year mortgage, and save up for the emergency fund. Once the emergency fund has enough money (6 months of living expenses) you can pay off your mortgage early if you would like to.

Remember that you see no real benefit to paying off your mortgage early unless you pay off the entire loan, refinance, or sell. Your house payment will stay the same until the loan is paid off in full. If you need to access the equity you have in your house, you cannot ask the lender to give you back what you have paid early. You will have to sell the house or get a brand new loan (refinance or home equity line of credit).

If you get a 15-year loan and have a medical emergency, lose your job, or cannot work, the bank will not lower the payment for you. You have to keep paying that high mortgage payment every month. If you had a 30-year mortgage and were paying more to it every month, an emergency would not be nearly as devastating, because you could stop paying extra.

Does a 15-year or 30-year loan allow you to buy more rentals?

My goal is to buy as many rentals as I can. Not only do I want each rental to make as much money as possible, I want to buy a lot of them! The 30-year loan allows you to buy more rentals because you are making more money each month. If you take that money and reinvest it into more properties, the results are phenomenal.

My nephew, who is a math whiz, made this amazing graph. Here is how it was created:

  • Each rental has a $120k value and $1,200 a month rent. The house was bought 30 percent below market value. but we spent $10k on repairs and 20% on down payments. We also spent 4% on closing costs to buy.
  • Monthly costs are 1.5% for taxes and insurance, 8% for property management, 5% for vacancies, and 10% for maintenance.

The chart shows what happens when you buy 1 property with a 30-year loan and reinvest all the cash flow into buying more properties vs 1 property bought with a 15-year loan and reinvesting all cash flow into more properties. You buy 119 houses over 30 years with 30-year loans and 32 houses with 15-year loans. You are making $53k a month with 30-year loans vs $11k a month with 15-year loans.

This does not account for inflation! With inflation, the 30 year is even better because rents increase on more properties. You buy 147 houses vs 38. It may be tricky getting a 30-year loan on that many properties, but it shows the value of investing your money early on instead of paying off debt early.

Conclusion

On the surface, a 15-year fixed-rate mortgage may seem like the best way to go. It saves money on interest over the life of the loan and has a shorter term. I believe the 15-year loan is the worst choice because you are tying up your money, making it harder to qualify for loans, and you could be investing that money in something that gives a higher return. If you get a 30-year ARM, the interest rate will actually be lower than the 15-year loan, and you might be able to pay that loan off faster than the 15-year loan.

Build a Rental Property Empire

Categories Rental Properties

Source: investfourmore.com

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Tax season has just come to an end, but that doesn’t mean you shouldn’t be preparing for next year. In fact, if you organize yourself throughout the year, you will have less work to do next year, and you will be more likely to plan for credits and deductions that can help you reduce your tax liability. (Of course, before you make any tax moves, you should consult a tax professional who can help you determine what might be best for your situation.) If you are a freelancer, it is especially important that you consider your tax situation, and remain organized throughout the year. Here are some tax tips for freelancers to consider:

Separate Business from Personal

The first thing you have to do as a freelancer, whether you are a sole proprietor, or whether you set up some sort of a business (LLC or S-Corp.), is recognize the difference between business and personal. If you want to deduct something as a business expense on your taxes, you had better make sure that it is, in fact, a business expense.

If you are using it for something else part of the time, it is not a business expense. One of the few exceptions to this real is your Internet service, in which case you can estimate how much of the Internet time in your home is used for business activities and use that percentage to figure your business expense related to online use.

It is a good idea to open a separate account for business purposes. Some banks won’t let you open a business account unless you are a registered as a business organization. But, even if you are a sole proprietor, you can open a second personal account and use that for your business activities. Even if you use your freelancing as your income, it is a good idea to have your freelance earnings deposited first into the account you designate for business, and then move the money (by writing a check or some other transfer) into your personal account. Make business purchases for supplies, travel and other business expenses, using your business account, and do not make personal purchases using your business account.

Keeping all of this separate will show that you are conscientious, and if an IRS audit does happen, it will be easier to document your business expenses.

Use Financial Software

One of the best ways to get organized is to use financial software. Most financial software programs allow you to keep track of multiple accounts. You can use the financial software to track how you move money from your business account into your personal account, and you can use category tags to help you keep track of specific expenses, making your Schedule C form easier to fill out. Here are the most common expense categories that freelancers come across, as listed on Schedule C (which you use if you are a sole proprietorship — if you are an S-Corp. or LLC, you will use another form):

  • Advertising
  • Insurance (not health)
  • Legal and professional services
  • Supplies
  • Travel
  • Utilities
  • Repairs and maintenance
  • Other Expenses

There are other categories on Schedule C; look over them and set up the expense categories on your financial software to correspond with what’s on the tax forms. Note that health insurance premiums can be deducted above the line on the front of your Form 1040, if you are paying for individual insurance yourself. (If you are reporting a net profit of zero or a loss, you will have to itemize your health insurance premiums instead of using line 31.)

Keep Documentation in One Place

Have a specific file for business expenses. Keep receipts and other documentation in this file, keeping it all together, throughout the year. If you write reviews, and bought a movie ticket, make sure to keep the receipt, and then print out a copy of the review to show that you did use the experience as part of your freelance work. The same rules apply for conference attendance and related expenses. Make sure that you have something to back up the receipt.

Keeping your business expense documentation in one file makes it easy to retrieve it at tax time, and it will help you keep an eye out for proper deductions. When your tax return is filed, keep your documentation with your copy of your tax return. I like to put it all in one large manila envelope labeled with the tax year.

This is a guest post Miranda Marquit is a journalistically trained freelance writer and professional blogger working from home. She is a contributor for Mainstreet.com, Personal Dividends and several other sites. The opinions voiced in this material are for general information and are not intended to provide specific advice and/or recommendations for any individual.

*Please consult tax advisor for advice on specific situations.

Source: goodfinancialcents.com

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Your net worth is based not only on how much moolah you have in the bank, but also on your human capital — that is, your ability to earn income. “We can think of human capital as assets specific to each person, such as intelligence, education, specialized skills, work ethic, and social skills in the workplace,” wrote Motley Fool contributor Doug Short (who has turned his own human capital into an investing website that’s popped up as far away as an Australian business TV show — it’s amazing what smart, retired people can do in their spare time).

These days, jobs are few and far between — and unemployment is poised to rise and stay high for a very long time. At a town hall meeting last year, Federal Reserve Chairman Ben Bernanke said gross domestic product growth would have to exceed 2.5% for the unemployment rate to fall. Unfortunately, consulting firm McKinsey says that newly-thrifty baby boomers, who are now saving at rates not seen in decades, will reduce GDP growth to just 2.4% annually for the next 30 years.

So to survive in a world of long-term high unemployment, we can’t take our jobs — or our human capital — for granted. Ask yourself these ten questions to make sure you’re investing in your most important money-making asset: You!

What’s going on in your industry and location?
Employment and wage trends aren’t the same across the country. The unemployment rate is in the mid-single digits for business and financial managers, but almost 20% for those in the construction industry. North Dakotans have the lowest unemployment rate, while Michiganders have the highest. Stay up on the news to know who’s being hired, fired, promoted, and downsized in your area. It could help you land a job — or know when it’s time to leave one.

How does your company make most of its money?
Most companies have more than one source of income, but not all of those revenue streams are of equal importance. Determine your company’s essential sources of income, and become an integral player in those parts of the business.

What can you do to protect your job and salary?
Pretend you’re your boss and you have to decide who gets a raise and who gets a pink slip. What qualities would you look for? What makes someone indispensable at your company?

If you own a business, how can you make yourself essential to your customers?
Even if you’re self-employed, you have bosses. They’re your customers, and they can fire you as easily as Donald Trump can. What can you do to make that hard for them?

Which skills could you acquire that would make you more valuable or diversify your human capital?
Your value in the workplace depends on your abilities. How many things can you do, and how well do you do them? Consider working toward a degree or starting a late-night self-study regimen that expands your human capital. Keep it focused on efforts that will really pay off. Simply getting an extra degree in the sociology of Star Trek could be a waste of money.

What would you do if you were fired today?
You’d probably: (1) apply at a few other places, or (2) change careers. If you’d apply elsewhere, ask yourself, “What can I add to my résumé to make them want to hire me?” If you want to begin a new career, ask yourself, “What should I be doing in my spare time to prepare?”

What can you do that you’re currently paying someone else for?
Expanding your human capital includes learning how to do things so you don’t have to pay someone else to do them. This pays off even for retirees. Think about doing your own home repairs, taxes, or (ahem) financial planning (though not until you know what you’re doing).

Can you pick up side jobs to earn extra income?
In our Rule Your Retirement service, we pay a team of retired financial professionals to answer subscribers’ questions. The previously mentioned Doug Short makes a tidy little income from advertisements on his website. Dabbling in extracurricular part-time work can pad your cash flow, expand your skill set, and could lead to a whole new career.

Can you sharpen your people skills?
I believe it was columnist Ben Stein who said your career depends on your affability as well as your ability. (Unfortunately for Stein, that didn’t spare him from being dropped by The New York Times after showing up in commercials for a credit-score company, violating a corporate policy.) Your career depends at least partially on how pleasant, cooperative, collegial, and fun you are. So play nice!

What do you want to do with the rest of your life?
You’ll probably do your best work if you’re doing what you enjoy most. This economy might not provide the greatest opportunities for you to pursue your dream job, but you can start preparing now so you’re ready when the market is.

Live long and prosper!

Source: getrichslowly.org

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Posted on: April 28, 2022

One of the biggest hurdles VA home buyers must clear is the VA appraisal. VA appraisals are much like regular appraisals — an approved appraiser will come out to the house you’re looking to buy and establish its value.

The main difference is the VA has stricter guidelines when it comes to houses. The Department of Veterans Affairs is a government agency that guarantees VA home loans, so they want to make sure the house meets its standards.

Check today’s VA rates (Apr 26th, 2023)

VA appraisal process

The VA appraisal process is very similar to any other home appraisal. Your VA lender will order an evaluation with a VA-approved appraiser as a part of the loan process.

The VA appraiser’s job is to establish a “fair market value” for the property and ensure the home meets the VA’s Minimum Property Requirements. If the requirements aren’t met, then a property may not qualify for a VA loan. 

What if the VA appraisal comes in too low?

Unfortunately, VA appraisals can work against the home sale. If a VA appraisal comes in low compared to the loan amount, problems can occur.

For example, a home on the market for $275,000 can get a VA offer with all $275,000 financed. But if the VA appraisal report says the home is only worth $265,000, then suddenly the VA will only finance up to $265,000. This means the VA home buyer needs to make up the $10,000 difference between the purchase price and the appraisal value.

But even if your VA appraisal comes in low, you have options.

Getting a reconsideration of value

If a VA appraisal comes in low, a reconsideration of value (ROV) could be the best option.

An ROV is when the VA reevaluates how much the home is actually worth. Depending on how it goes, it could completely change the VA appraisal.

One way to get an ROV is to find better comps. “Comps” is short for “comparable homes” or “comparable sales”: similar homes to the one you’re trying to buy. If you can find comps closer to your expected price range, the VA may reevaluate their decision. For example, a similar home with no view may be valued the same as the home you’re buying. But that view has a market value, and you can make the argument the home should be valued higher.

There’s also always the chance the appraiser made an error in valuation, or they missed something when appraising the house. If this is the case, then a new appraisal could shift the value of the property in the borrower’s favor.

While they help some VA buyers, ROVs don’t always work out. If the appraised value is still too low, there are other ways to avoid paying huge costs to make up the difference.

Ask the seller to lower the sales price

One of the most common ways VA home buyers get around a low appraisal is by getting the seller to lower the sales price. Some homes are overvalued, and a low VA appraisal should be a wake-up call to the current homeowner that their home might not be worth what they think. They could then lower the asking price to the same value as the appraisal, clearing the way for the VA loan to go through.

Cover the ‘appraisal gap’ in cash

Another possibility is that you, the home buyer, cover the additional costs that exceed the mortgage loan. There’s a good chance you’ll have to cover the costs from out of pocket, meaning cash, if the downpayment is too low or if no downpayment is being paid at all.

Split the gap between buyer and seller 

Then there’s the compromise between buyer and seller to split the additional costs equally. So, in our scenario where an additional $10,000 is owed, the seller would reduce the purchase price by $5,000 and the buyer would make up the additional $5,000.

Negotiate the extras

Along with these options, there are other ways to reduce the cost of the home. It’s common for home sellers to include appliances and/or furniture with the sale, including the costs in the total price. Unfortunately, VA appraisers won’t include this – their job is to evaluate the value of the home without including anything in it. Choosing to let the buyer keep the appliances can lower the total cost of the loan without changing the value of the house.

If all else fails, walk away

If there’s no way around the low VA appraisal, then you should always be prepared to walk away from the deal. VA appraisers are professionals, and they have to be certified by the VA to evaluate homes. If sellers are unwilling to budge or your Realtor cannot work out a new deal, it could be in the buyer’s best interest to find a different house. It’s not the happiest of endings, but it could be worth avoiding large, out-of-pocket payments just to get the specific home.

Common VA appraisal problems & what to do

A VA appraisal is a critical part of the homebuyer process for veterans. The hope is that you encounter no issues and sail smoothly to closing. But some VA buyers will face appraisal problems.

Here’s what to do if you run into VA appraisal problems: 

Repairs ordered

The Department of Veterans Affairs requires that all properties meet a list of ‘Minimum Property Requirements.” This list aims to make sure that veterans are moving into homes that are safe, sound and free of any living hazards. 

Unfortunately, some homes will not meet these basic criteria. With that, the VA appraiser may order repairs before closing can occur. 

If the appraisal comes back with ordered repairs, it is important to be open with the seller. Ask your real estate agent to share the list of required repairs. Let them know that you are unable to move forward with the home purchase unless these repairs are completed, due to the restrictions of the VA loan. In some cases, the seller will comply easily with the repairs or negotiate a new price that factors in the repairs for a smooth closing. 

If the seller is unwilling to complete the repairs, then a VA homebuyer will not be able to move forward with the purchase.

Low appraisal value

The fast pace of the current market means some homes may be appraised low. If you receive a low appraisal, you can ask for a Reconsideration of Value from the VA. 

If the reconsideration doesn’t affect the appraisal value, negotiating with the seller for a better price is an option. But in a hot market, most sellers will be unwilling to leave any money on the table. 

If this happens, you have the option to make up the difference in cash. However, that may amount to more money than you have available. You may have to walk away from the sale if you’ve exhausted all of your options.

How to avoid VA home appraisal issues

VA appraisals aren’t as complicated as they may seem. There are early signs homebuyers can find to tell if a home will clear an appraisal or not. Here are some tips to find out more about how to avoid VA appraisal issues during the home buying process.

The VA appraisal process doesn’t need to be intimidating so don’t let it deter you from taking advantage of one of the best mortgage products on the market.

VA appraisal FAQ

Are VA appraisals typically low?

No, VA appraisals are not typically low. If you are looking at a VA mortgage, you may have heard the myth that VA appraisals are typically low. The good news is that is not the case. When an appraiser shows up to determine the value of a home, they aren’t looking at the type of loan you want to use. Instead, they are looking at the home’s features to determine its value. 

How often do VA appraisals come in low?

Like any other type of appraisal, VA appraisals can come in lower than you expected. The unfortunate reality is that some homes are overpriced by the seller. 

According to Fannie Mae, appraisals come in low around 8% of the time. With that, borrowers seeking a VA loan may find their appraisal comes in low. But borrowers with other types of loans are in the same boat. 

How do I fight a low appraisal?

If a VA appraisal comes in low, you have the chance to appeal. Whether you are the buyer or seller, you can request a formal Reconsideration of Value. 

With this, you may present facts about the property that the original appraisal may have overlooked. A few important facts could be recent sales of comparable homes in the area, errors on square footage, omitted upgrades, and more. 

To challenge an appraisal, you can present these facts to the mortgage lender in writing. At that point, the original appraiser will consider the information. They may or may not adjust the appraisal amount. If the appraised value isn’t raised, you can ask for a letter detailing their reasoning. 

If you are seeking a valuation change of more than 10%, the lender will send the request to the Department of Veterans Affairs. In that case, a member of the agency will review the original appraisal and submitted facts to issue a revised value. 

What happens if the appraisal comes back low for the buyer?

If the appraisal comes back low, the lender will not lend more than the appraised amount. With that, the buyer will have the opportunity to make up the difference. The buyer can negotiate with the seller for a lower price or pay the difference out of pocket. 

Does the borrower have to complete the sale if the appraisal comes in low?

If a home’s appraisal is lower than expected, the buyer may be able to walk away from the sale if there is a contingency clause in place. The contingency would allow buyers to not complete the sale without losing their earnest money. 

With this in mind, a buyer should never waive their appraisal contingency unless they are willing to make up the difference out of pocket or lose their earnest money. 

Is a second VA appraisal possible?

If a VA appraisal comes back with a significant error, you can challenge the report. In some cases, you can present facts about the property that the original appraisal may have overlooked. For example, the appraiser may have missed the fact that you are on city water or have miscalculated the square footage of your home. 

With this document submitted, the appraiser may reevaluate their determination and adjust the property’s value. If not, you can appeal to the Department of Veterans if you are trying to adjust the property’s value by more than 10%. At that point, a VA employee will look at the documents to reissue a valuation. 

If you are pursuing a VA Streamline Refinance, an appraisal isn’t required by the VA. However, your lender will likely require an appraisal to finalize the loan. 

Check today’s VA rates (Apr 26th, 2023)

Source: militaryvaloan.com

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Commuting to work is one of the top things people consider when looking for an apartment. A long commute adds stress to your life. You sit in traffic, you use a substantial amount of gas, and you have far less free time than you would with a shorter commute. Moving closer to work makes life so much easier, but make sure you take all factors into account when apartment shopping based on your commute.

A move for shorter commuting

Switching neighborhoods to make your commuting time more tolerable is a great call. However, in order to ensure that you aren’t adding a different kind of stress, you need to ask yourself a few questions.

  • Is the new neighborhood safe?

Look into the crime rates in the neighborhood you are considering. You don’t want to jeopardize your safety for a shorter commute; it’s simply not worth it.

  • What’s the cost-benefit analysis?

Do a cost benefit analysis to see what your long commute is costing you. You want to look at the full cost of additional mileage on your car, including general wear and tear, depreciation, the cost of more frequent oil changes and repairs AND the cost of gas. Be realistic when figuring your gas costs, by learning the mileage your car gets. Talk to your accountant, if needed, about the wear and tear factor.

  • What’s the cost effectiveness of the move?

Once you know what your commute to work actually costs (and what it might cost in a new neighborhood), you can compare that to rent prices. See what the rent prices are in the neighborhood you’re considering. Even if a place has higher rent, you may still be coming up on top because your car expenses would be so much less.

The commuting drive-time test

Online maps are one way to get a general idea of your drive time. But these don’t take traffic into account. You want to make sure your shorter commute will actually save time. A new neighborhood may make your commute a few miles shorter, but if you’re not saving any time because you’re stuck in traffic day in and day out, it’s a wash. Give your commute a try from your new neighborhood. How is rush hour traffic? Are you still saving time even during peak driving times?

Many folks like proximity to a freeway when considering a new neighborhood. But back roads may get you to work faster. When you’re doing your drive tests, see if there is a route for you to avoid the major freeways. This could save you time and sanity.

RELATED: Walking to work as a lifestyle

RELATED: Create an emergency kit for your car

The benefits of a shorter commute

There are so many benefits to having a shorter commute: less stress, since you won’t be spending nearly as much time on the road in traffic; less money, in gas and car upkeep; time, as you’ll have more time to yourself each day. There are many perks to cutting down your commuting time.

[find-an-apartment]

After a long hard day at work, the last thing you want to do is deal with traffic and a long trip home. Traffic is stressful and can be dangerous as well. Why not take one less stressor out of your life? A shorter trip home will not only impact your sanity but your pocket book too.

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Last Updated on February 25, 2022 by Mark Ferguson

The FHA 90-day flip rule has caused me delays on a few flips this year. The rule basically says that FHA financing is not allowed on a house for new buyers that was purchased fewer than 91 days ago by the current owner. If you buy a house, fix it up, and try to sell it to FHA buyers, you will have to wait until you have owned the house for 90 days before you can even accept a contract from those buyers. There are some exceptions for certain sellers—like banks and builders—but for flippers, it is almost impossible to get around this rule.

What exactly does the FHA 90-day flip rule say?

It used to be that the buyer could order a second appraisal to bypass the FHA 90-day flip rule, but that changed in 2014. If you are selling a flip that has a huge difference from your buying price and the selling price (close to double), you still may have to order a second appraisal, even after the 90 days.  

Exceptions to FHA property flipping restrictions are made for:

  • Properties acquired by an employer or relocation agency in connection with the relocation of an employee.
  • Resales by HUD under its real estate owned (REO) program.
  • Sales by other U.S. government agencies of Single-Family Properties pursuant to programs operated by these agencies.
  • Sales of properties by nonprofits approved to purchase HUD-owned Single Family properties at a discount with resale restrictions.
  • Sales of properties that are acquired by the seller by inheritance.
  • Sales of properties by state and federally chartered financial institutions and Government-Sponsored Enterprises (GSE).
  • Sales of properties by local and state government agencies.
  • Sales of properties within Presidentially Declared Major Disaster Areas (PDMDA) only upon issuance of a notice of an exception from HUD.
  • The restrictions listed above and those in 24 CFR 203.37a do not apply to a builder selling a newly built house or building a house for a borrower planning to use FHA-insured financing.

How do you handle an FHA contract that comes in before you have owned a property for 90 days?

I sold a flip earlier this year on which we actually got a contract before I had owned it 90 days. I have had up to 22 flips going at one time this year, and it is rare that I get a house repaired fast enough to list it for sale before I have owned it 90 days. However, I bought this house from my direct marketing campaign, and it did not need much work, which allowed me to get it fixed quickly. Here were the numbers on the house:

  • Purchased for $120,000
  • Repairs were about $20,000
  • Carrying costs were about $12,500
  • Buyer closing costs of $3,000
  • Selling price of $213,000
  • Total profit of about $57,500

This was one of my best flips of the year, especially considering I made this much on a low-priced property. I actually thought it would sell for a lot less when I bought it, but our market has been tremendous this year. We did run into some hiccups on this property because of the 90-day flip rule. I bought it on July 28th and listed it on September 22nd. We listed it for $199,900 and immediately received a $210,000 offer. I was ecstatic until the buyers’ lender said they could not close on the house because of the 90-day flip rule. They were hoping to close in October, but because of the flip rule, it would actually have to close in December. That was a long time to wait, but it was a great offer, so I went forward with the deal.

The 90-day flip rule does not state that you cannot buy a house prior to the 90 days but rather that the entire loan process cannot start prior to the 90 days. Technically we are not supposed to write the purchase contract until the 90 days have passed. What we did was write a contract between the buyers and sellers, and then we wrote a brand new contract when the 90 days passed. At that point, the appraisal, underwriting, and loan approval can begin. Luckily, the appraisal came in at value, and we closed on December 11th.

Are there other ways to get around the 90-day flip rule?

There are some ways to get around the 90-day flip rule, including dumb luck. I sold a house earlier in the year to an FHA buyer who wrote the contract before I had owned the house 90 days. I used this sale as a reason for the lender why we should not have to wait the 90 days on the property I discussed in this article. The lenders’ response was the underwriter and lender must have both forgotten about the 90-day flip rule on that deal. There is no way it should have been under contract or sold before the 90 days, even with a 2nd appraisal. I got lucky on that property. You can also try to find a buyer that does not need to use FHA. Often, a conventional mortgage is actually better for buyers, but they need to have better credit and debt-to-income ratios to qualify for conventional. Most of our buyers use FHA loans, and they are willing to pay the most for our flips, so it makes sense to cater to them.

Conclusion

I usually do not have to worry about the 90-day flip rule because it takes me longer than that to get my houses ready to sell. It can be a thorn in an investor’s side when they are counting on a house selling quickly and they have to wait a month or two longer. Investors also need to be aware they may need a second appraisal with FHA loans if they try to sell a house for twice what they bought it for. Conventional mortgages do not always eliminate these problems either as many conventional lenders adopt FHA rules.

Build a Rental Property Empire

Categories Fix and Flips

Source: investfourmore.com

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Liability-only vs. full coverage insurance

Simply put, liability-only car insurance is a type of policy that only provides coverage for damages you cause, not damages you sustain. Full coverage builds on liability-only and adds additional coverage, including coverage for damages to your vehicle from collisions as well as non-collision incidents such as storms and fires. In the U.S., the average cost of car insurance for minimum coverage — the lowest coverage level of insurance that you can purchase — is $622 per year, while full coverage costs an average of $2,014 per year.

Keep in mind, though, that your auto insurance needs will likely change over time. You may find that full coverage is the best option for you now, while in the future, you may be more apt to choose liability-only. Reassessing your needs once in a while, especially if you’ve recently gone through a life change, can help you align your coverage with your circumstances. Below, we delve deeper into the differences between liability-only and full coverage to help you determine which is best for you as you gather car insurance quotes.

Liability-only car insurance

Liability car insurance coverage is the part of your policy that pays for the injuries and damages you cause to someone else in an at-fault auto accident. Most states require drivers to carry at least a minimum car insurance coverage limit, often called “minimum coverage.” However, you can buy higher liability limits than required by your state and still have a “liability-only” policy, as long as you don’t add coverage for damage to your vehicle.

Liability coverage is broken down into two parts:

  • Bodily injury liability: This coverage pays for the injuries you cause to another party in an at-fault accident.
  • Property damage liability: This portion of your liability coverage pays for the damages you cause to another’s property, such as another vehicle, a fence or a building.

Liability coverage is often listed as split limits, which are listed in a bodily injury per person / bodily injury per accident / property damage per accident format. However, your liability coverage may also be a “combined single limit,” meaning it’s one number that can be used flexibly to cover the damages and injuries you cause.

Some states also require other coverage types as part of their minimum coverage requirements, including:

  • Personal injury protection (PIP): This coverage pays for your medical bills and your passengers’ medical bills if you are injured in an accident, regardless of fault. PIP may also pay for lost wages and the costs for household services you can’t perform due to injuries. In no-fault states, PIP is required.
  • Uninsured and underinsured motorist: These two coverage types pay for injuries you sustain if you are hit by a driver who does not have insurance or does not have enough insurance to cover your bills. This also provides coverage if you are a pedestrian hit by an uninsured motorist or a victim of a hit-and-run accident.
  • Medical payments: Although only required in a few states, medical payments coverage is similar to PIP. It pays for your injuries and the injuries to your passengers regardless of fault. However, medical payments coverage does not cover lost wages or household services like PIP.

Takeaway: You must purchase a car insurance policy with at least your state’s minimum required coverage types and limits in states where car insurance is required. However, you can purchase higher liability limits and other coverage types, such as medical payments, and still have a “liability-only” policy.

Full coverage car insurance

Full coverage car insurance refers to a policy that has all the state-required coverage types as well as comprehensive and collision coverage, which add coverage for damage to your vehicle. While it’s possible to have a full coverage policy with low liability limits, many full coverage policies have higher limits for liability coverage to offer more robust coverage and greater financial protection for you and your family.

Full coverage policies include:

  • Collision: This coverage pays for your vehicle’s damages from collisions, such as hitting another vehicle, tree or building. Collision coverage will help cover your vehicle’s repairs in a covered claim, regardless of fault.
  • Comprehensive: Often called “other-than-collision” coverage, comprehensive pays for non-collision damages, such as damages caused by fire, theft, weather, vandalism or striking an animal.

You may also be able to add some additional coverage types, known as endorsements, to full coverage policies:

  • Rental reimbursement: This coverage will pay for a rental car if your vehicle is not driveable and is being repaired or replaced by a claim covered under your comprehensive or collision coverage. There is generally a per-day coverage limit and a total maximum amount of coverage limit.
  • Roadside assistance: This endorsement pays for service calls needed for your vehicle, like a tow, jump start or tire repair service.
  • Gap insurance: Gap coverage is designed to pay the difference between your new car’s actual cash value and the amount you owe on a loan or lease. If your vehicle is totaled or stolen and you owe more than the car is worth, gap coverage pays the difference.

Takeaway: A full coverage policy is generally more expensive than a liability-only policy, but it provides more financial protection and often has higher liability limits. Full coverage is often required when a vehicle is financed or leased. Additionally, you must have full coverage to qualify for several common endorsements, including car rental coverage and roadside assistance.

Source: thesimpledollar.com