Does Renting Makes More Financial Sense Than Buying a House?

Many renters think about buying a house, a place to call their own. They save a “nest egg” hoping to buy the home of their dreams. But, does buying a home make sense from a financial perspective? Is it a sound financial investment? Can renting help you to acquire wealth? These are some questions that “weigh” on peoples minds when it comes to considering purchasing a home.

According to an article by Jack Hough from SmartMoney.com “Rent is the cost of owning shares with money you would otherwise spend on a house. Houses have ownership costs, too: taxes, insurance and maintenance. Rent costs about 5% of house prices each year if we apply the price/rent ratio of 19. House incidentals often cost around 2%. If you have $300,000 and a choice between spending it on a house or shares, you’ll pay $6,000 a year in incidentals if you buy the house or about $15,000 a year ($1,250 a month) in rent if you buy the shares. But the shares will return $21,000 a year after inflation while the house will return zero. (My numbers work out even better than these. I pay a smidgen less than $1,250 a month for rent, while house prices in my neighborhood are far higher than $300,000.”)

Renting does not have as much responsibility as buying a home does. When you rent, it’s the property management’s job to fix repairs and maintain the property’s landscape. Renting gives you lease flexibility and a opportunity to check out different areas of the city. Once you a buy a home and decide you do not like the area, then you must put the home up for sale and pray to God that it sells straight-away!

Buying vs. Renting Links

  1. New Buyer.com. “Learn the tradeoffs, potential money savings and which option makes sense.”
  2. Ms. Money. A great site for financial planning.
  3. ABC News. Find out the pros and cons of renting and buying.

The bottom line is only you can decide if renting or buying is the best option. Do you want the flexibility of a lease or the commitment of a home? What is your financial situation? Ask yourself these questions before signing your name on the bottom line of either a lease or mortgage loan.

If you desire to make more money or spend a little more, renting may make sense for you. Many financial calculators are available online and can help you decide if renting or buying is the right move. Start crunching the numbers and plan for your future today!

What’s in Your Wallet? Pay Cash and Leave Credit Cards at Home

Since key members of Congress are working to reach an agreement to bail out Wall Street, it looks like Americans could be headed back to their roots by becoming a cash society.

Many, many years ago, Americans paid cash for their purchases. Has anyone heard of lay-away? Whatever happened to that concept? It must have vanished along with the values and scruples of the American people.

Americans got themselves into trouble by purchasing homes, cars, jewelry, electronics, clothes, and other items they could not afford. Remember when mom used to say “if you cannot afford it, do not buy it!” Apparently, those words of wisdom went into one ear and out the other.

America is known for being a nation of consumers. People are not happy with a car that is 5 to 10 years old. They want a brand new one that is loaded with the latest technologies. That’s great if you can afford to pay cash for it. But, most people take out loans and fall deeper into debt.

The SEC, Wall Street, and the housing industry are not innocent. The people who made loans to home owners knowing that these people would not be able to pay the loans back ought to be held accountable for their actions. Chances are they will receive a “slap on the wrist.” Unfortunately, they will have to deal with “instant karma.” You get back what you give out. Ouch!

Perhaps this bailout is a good thing for the United States of America. It will force people to take a step back and reevaluate their lives. Maybe now people will realize what is really important such as family, friendships, community, and the health of planet Earth. Americans, it’s time to look inside of yourselves and discover why your “outside” is such a mess!

You Rented an Apartment, Now What?

Whether you are renting your first apartment or moving for the fifth time, know what you are getting into before you sign a lease. Breaking a leasing agreement can be expensive. If the apartment complex is unbearable it may be worth it to break the lease. If you can “stick it out” to the end, be prepared before you start searching for a new home.

Most complexes will show you a model apartment. Ask if there is an apartment available that you can see versus the model. The models are usually nicer than the actual apartment you will be renting. If an apartment is not available, thank the leasing manager and keep searching. If you really like the apartment complex, make sure to take a “sales package,” and ask for the leasing manager’s business card.

Find out when the property was built. If it is an older apartment complex, ask if renovations will be done in the near future. They may not do total renovations. But, if you are lucky you can get a new stove or refrigerator or both.

After an extensive search, you decided on an apartment complex and are ready to sign on the bottom line. Wait a minute before you do. Did you ask all of the appropriate questions? If not, you may want to read these 10 tips before renting an apartment.

Inspection Checklist

  1. Look at the apartment carefully, this includes every “nook and cranny.” Ensure that molding is complete and not coming off of the wall. If there is caulking, make sure it is neat and clean.
  2. Check out the kitchen. Does the garbage disposal and dishwasher work? Are the cabinets straight and level? How old is the stove and refrigerator? Make sure the cabinetry is finished underneath. Some contractors will cut corners where possible. If you have children or pets, it’s important to make sure there are no gaps or opening because they could get stuck!
  3. Make sure the electrical outlets work. As a test, plug in a radio to make sure each outlet works.
  4. Check out the bathrooms. Are the toilets in good shape? Does the shower drip? How is the floor?
  5. Look at the hot water tank. How old is it?
  6. If there are vertical blinds, make sure they work. Are the patio and screen door secure?
  7. Open and close the windows. Do they open and close with ease? Do the locks work?
  8. If you are lucky enough to have a washer/dryer in the apartment, test them.

Additional Advice

  1. Essortment. Renting advice on what to look for in an apartment.
  2. eHow. How to rent an apartment.
  3. Met Life. Offers great advice on renting an apartment.

When you rent an apartment, make sure it’s the right one for you! Look at the area, visit during the day and night, and ask questions!

Bonus!
Practical Money Skills. Renting an apartment is the choice for many people for different reasons. Learn more about the financial and legal aspects of renting an apartment.

Read These 10 Tips Before You Rent an Apartment

Today, most people are renting. When it’s time to renew the lease you may or may not stay at your apartment. Why are you moving? Is the complex noisy? Do the maintenance people ignore your “fix it” list? Are the leasing people clueless?

Before you move to a new place, make sure you know what to look for and what questions to ask the leasing manager and assistant manger.

For those who are in the market for a new place, make sure you do research. Visit a property during the day and night. Just because the property is nice and quiet during the day does not mean it will be at night. What types of people live in the complex? Are they young professionals? Are they mostly college students, let’s say from ASU who like to party and blare the radio 7 days a week? Are there young children? If there are children, do the parents discipline them? Do the parents allow their children to “scream” their heads off at 8 am on a Saturday morning?

If you have a pet, make sure the complex will allow your pet. Find out if there is a weight limit and what types and breeds of pets are allowed. Ask if there is a monthly pet fee and deposit.

10 Tips for Renting

  1. Visit the property during the day and night.
  2. Ask if the property allows pets, what kind, and if there is a weight limit.
  3. Is the complex non-smoking?
  4. Walk around the complex and observe the people.
  5. Make sure the grounds are well kept.
  6. Is parking ample? Will your friends and family be able to find a parking space?
  7. Ensure that the trash is not overflowing from the dumpster.
  8. Is the property well lit and secure?
  9. How old is the property? Are appliances and apartments updated?
  10. Stop residents and ask how long they have been at the complex? Are they renewing their lease year after year? Are the residents mostly transients?

Whether you are moving to your first or third apartment, now you know what to look for and what questions to ask. This will be your home for the next 12 or 14 months. Make sure the complex is the right fit for you. You do not want to be in a situation where you are paying a fee to break your lease. The fee can range from $800 – $1,600 depending on the property. Be prepared before signing your name on the dotted line!

Bonus!

  1. Ask if there are smoke detectors and a sprinkler system in the apartment.
  2. Inquire about dead bolt locks!

Nation of Millionaires: How Do They Do It?

Many people dream of being a millionaire. It usually goes something like this, “if I could only win the lottery!” Being a millionaire is not as difficult as people make it out to be. In fact, most millionaires work for themselves. These people are considered to be self-made millionaires. They did not wait for someone to hand over the family business or fortune to them. Whether they did it by themselves or with a team of people, the point is they did it!

According to the article “10 Things Millionaires Won’t Tell You” on Smart Money.com most millionaires shop at Wal Mart. Many people will be shocked by this revelation. Millionaires know how to be frugal. They shop for items on sale, look for the bargains, and clip coupons!

People can become millionaires by investing in the stock market, opening a savings account, purchasing a franchise, opening an IRA or Roth IRA, and buying and selling property. Do not be fooled by the latter. In the real estate business, there is a buyer for everything. What you need is a good understanding of the real estate market. Do not let talk of economic woes get into your head. Find a “real estate guru” and learn the tricks of the trade. People make money with real estate no matter the economic situation of the U.S. For real estate tips and tricks, please visit real estate investors life.

Now is the time to become a millionaire. Even people working 9 to 5 jobs can become millionaires. All it takes is dedication and time. The main requirement to being a millionaire is that you must want to be one. Another tip is to live within your means. Today, many people are luxaholics. Most of these people have a Target budget but spend like they have a Rodeo Drive one. Visit MSN Money to learn more on how to become a millionaire.

Don’t Let the Rise of Zombie Debt Haunt You

Many people never heard of zombie debt until they receive a letter regarding their once resolved fraudulent credit issue which has been re-awakened. This is known as zombie debt. Imagine that your credit card was stolen and the thief goes on a shopping spree. You notify the credit card company of the theft and to rectify the situation. All charges are cleared and you are not responsible for them. Right? Better think again.

Collectors harass consumers to no avail when collecting debt. Consumers who believe the debt was resolved or never even had any in the first place are reporting more and more abuse from collectors. From nasty phone calls to trashing credit reports, the Federal Trade Commission has heard it all. They received many complaints in 2005 about third party debt collectors. For more information on zombie debt, please visit MSN.com.

About.com: “Zombie debt refers to old debt purchased by debt collectors hoping to intimidate consumers into paying the debt. If you’re contacted by a collection agency about an old debt, don’t give in immediately. You have several tools you can use to fight back.”

Links to Tackling Zombie Debt

  1. Deal With Zombie Debt. Find great advice on how to deal with zombie debt.
  2. Sound Money Matters. Ready to fight zombie debt? Learn how to deal with zombie debt once and for all.

The bottom line is to be vigilant with your credit! Review your credit statements on a monthly basis and review your credit score at least once a year. Do not assume you owe the debt. Verify that you owe the debt and make the collectors prove you owe the debit. Start a file and keep all letters from collectors in one place. Feel free to hang up on collectors if they are being rude or call everyday. You may want to consult with an attorney if the calls and letters continue.

Finally, file a complaint with the Federal Trade Commission. They are pursuing illegal collections and are shutting down collection agencies. Make sure you know your rights and take the necessary steps to handle the situation. It’s your credit that is on the line!

Families Raise Cash and Save Money – How Do They Do It?

Many families are looking for ways to raise cash and save money. According to CNN.Money some ways to raise cash fast are as follows: sell investments, raid the emergency funds, ask parents for a gift, and take out a home equity line of credit.

Business Week asked financial advisors for advice on how to reduce expenses and boost savings. A few ways are to vacation in the off-season, cut back on eating out, if you have two cars, sell one; cut out premium cable stations, and find FREE entertainment.

Other ways families can raise cash is to sell antiques and heirlooms. Yes, “parting may be sweet sorrow,” but if the money is needed to pay the bills, do it! Great, Great, Great Aunt Martha will understand. She’s probably in the afterlife and really would not care what you do with the heirloom. Consider selling jewelry, furniture, exercise equipment, and furniture.

Saving money is relatively easy. Families must be vigilant and want to save money. Cutback on Starbucks, carpool, trim phone expenses, make a budget, pay off credit cards or make payment arrangement and cut-up the ones from department stores because VISA and MasterCard are accepted everywhere you go, and keep track of expenses. If you receive a gift of money or unexpected cash, put it in the bank. Pay for purchases with cash versus credit. As mom would say “if you can’t afford it, don’t buy it!”