The Cost of NOT Owning Your Home

Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.

Zillow recently reported that:

“In reality, buying or renting a home is an intensely personal decision, with emotional and even financial considerations that go beyond whether to invest in this one (admittedly large) asset. Looking strictly at housing market numbers, there is a concrete point at which buying a home makes more financial sense than renting it.”

What proof exists that owning is financially better than renting?

1. We recently highlighted the top 5 financial benefits of homeownership:

  • Homeownership is a form of forced savings.
  • Homeownership provides tax savings.
  • Homeownership allows you to lock in your monthly housing cost.
  • Buying a home is cheaper than renting.
  • No other investment lets you live inside of it.

2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.

3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2017 could build more than $48,000 in family wealth over the next five years.

4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!!

Bottom Line

Owning a home has always been, and will always be, better from a financial standpoint than renting.

 

Posted by The KCM Crew

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The Cost of Renting vs. Buying a Home [INFOGRAPHIC]

Some Highlights:

  • Historically, the choice between renting or buying a home has been a tough decision.
  • Looking at the percentage of income needed to rent a median-priced home today (29.2%) vs. the percentage needed to buy a median-priced home (15.8%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

Posted by The KCM Crew

Be Careful Not to Get Caught in The Rental Trap!

 

There are many benefits to homeownership. One of the top benefits is being able to protect yourself from rising rents by locking in your housing cost for the life of your mortgage.

Don’t Become Trapped 

A recent article by ConsumerAffairs addressed the continuous rise in rents, stating:

“The cost of putting a roof over your head continues to go up. Not only are home prices still rising, but the cost of rent rose 0.5% in June.”

Additionally, in the Joint Center for Housing Studies at Harvard University’s 2017 State of the Nation’s Housing Report, it was revealed that,

“Despite a slight improvement from 2014, fully one-third of US households paid more than 30 percent of their incomes for housing in 2015. Renters continue to be more likely to face cost burdens…the number of cost-burdened renters (21 million) considerably outstrips the number of cost-burdened owners (18 million) even though nearly two-thirds of US households own their homes.”

These households struggle to save for a rainy day and pay other bills, including groceries and healthcare.

It’s Cheaper to Buy Than Rent 

As we have previously mentioned, the results of the latest Rent vs. Buy Report from Trulia shows that homeownership remains cheaper than renting with a traditional 30-year fixed rate mortgage in the 100 largest metro areas in the United States.

The updated numbers show that the range is an average of 3.5% less expensive in San Jose (CA), all the way up to 50.1% less expensive in Baton Rouge (LA), and 33.1% nationwide!

Know Your Options

Perhaps you have already saved enough to buy your first home. A nationwide survey of about 24,000 renters found that 80% of millennial renters plan to eventually buy a house, but 72% cite affordability as their primary obstacle. Aside from affordability, one in three millennial renters have concerns about their credit scores, and another 53% said that a down payment is an obstacle.

Many first-time homebuyers who believe that they need a large down payment may be holding themselves back from their dream homes. As we have reported before, in many areas of the country, a first-time home buyer can save for a 3% down payment in less than two years. You may have already saved enough!

Bottom Line

Don’t get caught in the trap that so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Let’s get together to determine if you can qualify for a mortgage now!

 

Posted by the KCM Crew

Renting or Buying… Either Way You’re Paying a Mortgage

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There are some people who have not purchased homes because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.

As Entrepreneur Magazine, a premier source for small business, explained this month in their article, “12 Practical Steps to Getting Rich”:

While renting on a temporary basis isn’t terrible, you should most certainly own the roof over your head if you’re serious about your finances. It won’t make you rich overnight, but by renting, you’re paying someone else’s mortgage. In effect, you’re making someone else rich.”

Christina Boyle, Senior Vice President and head of the Single-Family Sales & Relationship Management organization at Freddie Mac, explains another benefit of securing a mortgage vs. paying rent:

“With a 30-year fixed rate mortgage, you’ll have the certainty & stability of knowing what your mortgage payment will be for the next 30 years – unlike rents which will continue to rise over the next three decades.”

As an owner, your mortgage payment is a form of ‘forced savings’ which allows you to build equity in your home that you can tap into later in life. As a renter, you guarantee the landlord is the person with that equity.

Interest rates are still at historic lows, making it one of the best times to secure a mortgage and make a move into your dream home. Freddie Mac’s latest report shows that rates across the country were at 4.23% last week.

Bottom Line

Whether you are looking for a primary residence for the first time or are considering a vacation home on the shore, now may be the time to buy.

Posted by The KCM Crew

Do You Know the Real Cost of Renting vs. Buying? [INFOGRAPHIC]

Some Highlights:

  • Historically, the choice between renting or buying a home has been a close decision.
  • Looking at the percentage of income needed to rent a median-priced home today (30%), vs. the percentage needed to buy a median-priced home (15%), the choice becomes obvious.
  • Every market is different. Before you renew your lease again, find out if you could use your housing costs to own a home of your own!

 

Posted by The KCM Crew

7 Smart Tips For Renters With Bad Credit

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Wondering how to rent with bad credit? Even if you’re a first-time renter, there are ways to land a place without a perfect score.

Bad credit? You might have a tough time qualifying for that rental you love so much.

Real talk: Many landlords now rely on a credit check to vet potential renters, especially in competitive markets. (Just try hunting for an apartment for rent in Chicago, IL, and you’ll feel the pinch of a poor score.) Like it or not, your credit history can be used to assess how much of a financial risk you may pose to a landlord. Are you going pay your monthly rent on time, or does your credit report indicate that you have a history of paying bills late?

But there’s hope. Many renters lease apartments with bad credit (or no credit at all, if you’re a new college grad, for example) and work to boost their scores while renting. So how can you land an apartment if your score is lackluster?

Here’s how to rent with bad credit:

  1. Find a guarantor or co-signer. This is both the easiest and most complicated approach: Ask a parent, trusted friend, or relative with good credit to co-sign the rental application with you. In theory, it’s an easy solution, because while you’ll be the only one living in the apartment, your co-signer agrees to cover the payments in the event that you default on your rent. This can provide a landlord the extra reassurance they need. Of course, it’s complicated because someone else is on the hook for your behavior. You don’t actually want your co-signer to be forced to make payments for you, so be sure the monthly rent is an amount you can afford comfortably. Be realistic about what might happen to your relationship with your co-signer if you default on the lease.
  2. Be honest and show progress. Sometimes, bad credit isn’t a reflection of bad money management. You may have lost your job, suffered from medical problems, or experienced another financial setback that was out of your control. If this is the case, be upfront about it — before the landlord even runs your credit check. Your willingness to admit and own up to your bad credit is a point in your favor. It also gives you the opportunity to talk about the steps you’ve taken, and are currently taking, to improve your credit score. Whether it’s a proven track record of paying your bills on time or references from recent landlords, this will show your prospective property manager that you’re responsible and committed (even if your credit is less than perfect).
  3. Pay rent in advance or increase your security deposit. Bad credit makes landlords nervous because it indicates that since you defaulted on past bills, you might default on the rent. By paying a month or more in advance or offering a two-month security deposit, you can alleviate their concerns. Not only does this show your commitment, but it also provides them with extra cash that can cover some of the losses and damages should you skip out on the rent. (Which, of course, you won’t.)
  4. Get a roommate. Willing to share your living room and kitchen? Find a roommate. If the landlord will allow just one person to sign the lease, see if your roommate is willing to sign it solo. (Alternatively, try to move in with a roommate who is mid-lease and can add you without a credit check.) This way, the person on the lease is the one with more solid credit. Roommates come with another benefit: you’ll be able to share the bills. By reducing your financial burden, you can continue to pay down debt and repair your bad credit faster — a true win-win!
  5. Show solid income and offer to pay via direct deposit. Even if your credit history is a little shaky, being able to show a history of regular, consistent income can go a long way toward making a landlord feel better about you. When applying for an apartment, have proof of income ready, such as recent pay stubs, tax returns, and even a letter from your employer verifying your employment status and income. Offering to have your rent automatically deducted from your bank account can also help.
  6. Compromise by paying a little more. Some landlords charge additional “risk” fees if your credit score is poor. You may want to consider taking the hit if you really love the apartment, or if you need to quickly find a place to live. If you’re dealing with an individual property manager who is inclined to deny your application, you may be able to negotiate a slightly higher rent as a gesture of good faith.
  7. Bring recommendations. You’d bring letters of recommendation for a job application; why not bring the same when you’re trying to rent? Letters of recommendation can reassure a potential landlord that you’re a responsible person who won’t cause them any problems. Ask for letters from current and previous employers, landlords, and even past roommates who can vouch for your character. Even if your previous landlords were only for short-term rental arrangements, their endorsements can hold weight.

 

Posted by Paula Pant on Trulia

 

17 Affordable Luxuries For Your Apartment Bathroom

You don’t have to be a homeowner to pamper yourself with spa-like bathroom features.

There’s no denying it: Sometimes it’s hard to turn off the water and step out of a hot, soothing shower. But your shower doesn’t have to be the only relaxing moment of your day. You may think the 10-foot-by-10-foot bathroom in your studio apartment in Washington, DC, is hopeless when it comes to Zen design potential, but it is possible to turn even the tiniest space into an oasis. Tackle these 17 bathroom DIY projects and be well on your way to enjoying a luxurious bathroom every day.

1. Dim the lights

Add a dimmer to ease into your morning or set the tone after a long day. The process is relatively easy, and with your landlord’s approval, your security deposit should be safe. Once you’re able to customize the lighting every morning, you’ll wonder how you survived without it!

2. Set a cozy mood

Creating a cozy, relaxing space can be as easy as leaving a few candles out in your bathroom. They’ll give the place a pleasant smell even unlit, and who doesn’t enjoy lighting a few candles before stepping into the shower or bath after a long day? Just remember to blow them out before you leave!

3. Add shower tunes

Catch up on your favorite podcasts or jam out to your favorite tunes while getting ready in the morning with a Bluetooth shower speaker. You can purchase a waterproof speaker for less than $20.

4. Warm your towels

You know that feeling of throwing on a sweatshirt right out of the dryer? Enjoy that luxury every day by hanging your towels on an electric towel rack that heats them up while you shower. Ahhh.

5. Keep your toes cozy

Don’t wait until you’re a homeowner to enjoy the luxury of a heated floor while getting ready in the morning. Throw a foot warmer mat by your bathroom sink on chilly mornings and enjoy getting ready without shivering on the tile.

6. Heat up the room

If toasty towels and toes aren’t enough, heat the entire space with a space heater — seek out a unit that’s small, sleek, and equipped with emergency shut-offs in case it overheats. Save money on energy bills by keeping the central heat on low and heat only your bathroom while you get ready in the morning.

7. Create the perfect pressure

Replace your rental showerhead with an adjustable rain-can version. If you’re tall, you can even add an extension to avoid the bent-over, crooked-neck shampooing experience. Pro tip: Especially if your rental has low-flow showerheads in place, you’ll probably have to get approval from your landlord before you break out the toolbox. Make sure you hold on to the original showerhead to reinstall at the end of your lease.

8. Sit pretty — and hygienic

Swap out your rental’s toilet seat with the seat of your choice, as long as you have approval from your landlord. Most are more than happy for renters to make this upgrade, and some will even cover the cost.

9. Add some art

Adorn your apartment’s bathroom walls with paintings or photography to add a bit of character. Kylee Trunck, senior staff designer at Havenly, recommends incorporating light-blue and green hues, which are known to be soothing — that’s why you see these colors at the spa! “Steer clear of fabric wall hangings that could also be potentially damaged by steam, and instead select prints that can be framed with a protective glass insert,” says Trunck.

10. Pull on pretty hardware

Replace drawer pulls and cabinet knobs with some prettier options. “Replacing drawer knobs and pulls is an easy and inexpensive way to change the look of a bathroom,” says Trunck. Look for options that are “the same size that can easily be screwed in and out” of the existing hole. You’ll also want to hold on to the old knobs, to screw back in place at the end of your lease.

11. Get a better look

Add a magnified mirror with a light to perfect your hair and makeup before heading out the door. You can opt for a free-standing version for your sink or one that screws into the wall.

12. Take in the full view

And don’t forget to check your entire reflection before heading out the door. Over-the-door full-length mirrors are a great option to save space (and your walls!), or pick a wall-mounted option with storage space inside.

13. Create a unique entry

Start by bumping the tension rod for your shower curtain close to the ceiling and invest in a longer shower curtain and liner for a taller, more luxe look. The added height will make your shower feel more spacious from the inside too. For an extra boost of design goodness, use two shower curtains instead of one to lend a symmetric, window-curtain effect.

14. Shower in a rainforest

Hang plants from your shower curtain rod or showerhead. Aloe vera thrives in hot, humid environments, and the leaf’s juice is filled with vitamins and minerals. If you have a sunny window in your bathroom, plant ivy for a natural air purifier: The plant helps keep spaces hygienic by removing mold, dust, and other icky particles from the surrounding air. Pro tip: Place the plant on a high shelf and let the stems grow long enough to elegantly trail down.

15. Add eucalyptus

Hang a bundle of eucalyptus from your showerhead to ward off colds. The plant emits a soothing smell, and its essential oils can help ease congestion. Bundles of eucalyptus can be found at flower shops and craft stores and can last up to a month in the shower.

16. Make an au naturel bathmat

Forget soggy bathmats: opt for a natural, wood mat made from IKEA outdoor decking. This “bathmat” is relatively easy to make — just click the pieces together and remove the edges once your mat is the desired size.

17. Sit back in some bubbles

Create your own bathtub shelf out of some reclaimed wood or two-by-fours and a bit of wood stain. Being able to eat, drink, and read a book in your tub? Completely unnecessary but totally worth it.

Posted by Nicole Esplin on Trulia