Mind These 3 “De”s When Listing Your Home

March 11, 2014

This past weekend, my stepson and his wife took the plunge and put in a contract for their first home, joining the increasingly large group of first-time home buyers in the housing market today. Before finding their “diamond in the the rough,” there were a lot of potential money pits they had to sift through and on the occasions when I got to go along for the ride, I was shocked at how sellers put no thought at all into the staging or curb appeal of their homes. If you’re planning on taking advantage of the housing recovery by listing your home for sale this spring, remember that you never get a second chance to make a first impression. For buyers, it’s all about the three “L”s: location, location, location. But for sellers, you should pay attention to these three “De”s: Continue reading “Mind These 3 “De”s When Listing Your Home”

You Got Insurance, Don’t You?

February 27, 2014

I was recently watching the 1980s cult classic Roadhouse (listed as one of “The 100 Most Enjoyably Bad Movies Ever Made”) on TV with a couple of friends and there was a scene in which the typical rich evil businessman antagonist sets one of the character’s properties on fire. One of my friends joked that it wasn’t such a big deal since it should be covered by insurance. Later in the movie, one of the characters actually said “you got insurance, don’t you?” after another similar incident. Continue reading “You Got Insurance, Don’t You?”

What to Look For In an Investment Property

February 13, 2014

Over the last couple of weeks, I wrote about the opportunities and challenges involved with investing in residential rental properties. If you feel ready to take the plunge, you may be wondering what to look for in an investment property. After all, it’s not the same as buying your home, which is as much if not more of an emotional decision than a financial one. Like all investments, the less emotion involved with real estate, the better. Here are some things I looked for in purchasing my first rental property: Continue reading “What to Look For In an Investment Property”

Would Winning the Dream Home Become a Nightmare?

January 07, 2014

Updated June 14, 2017

HGTV’s Dream Home Giveaway continues to fascinate people like my mom, who love watching each year’s winners tour their incredible new homes. Whenever a new contest kicks off, my mom always asks me to help her enter, since her eyesight isn’t good enough for her to fill out the form anymore. Like the good daughter I am, I dutifully set a reminder to complete the entry form each morning that the contest is open, which makes my mom happy.

What if she wins?

But what if she did win? Would my elderly parents move across the country if necessary, leaving their home state of Maryland behind? If the home they won was in a state like California, that would mean higher state taxes, not to mention the cost of maintaining their new state-of-the-art home. And first, the IRS would want their share of taxes on the value of the home she hopes to win.

When a dream turns into a nightmare

Just like many lottery winners, the stories of the prior Dream Home winners sometimes end up being more nightmare than dream. Several of the winners ultimately lost their Dream Homes to foreclosure or ended up selling the home, after not being able to keep up the carrying costs and real estate taxes of a luxury home. They often would have been better off taking the cash instead.

Ski resort dreams dashed

The 2011 Stowe, VT ski lodge winner had the idea of turning the Dream Home into a vacation home and figured they could rent it out the rest of the time. But with real estate taxes of over $27,000 and all the other expenses associated with rental real estate (including probably a local management company since the winner lived in IL) the house was put up for sale after the family only stayed there 5 times.

The property certainly met the first rule in real estate: location, location, location. But when considering the rental real estate rule of thumb that a property should be able to provide gross monthly income equal to 1% of the property value, this WAS only a dream – since the property had a supposed retail value of $3.8 million but may never have been able to yield $38,000 every month of the year.

Bed & breakfast special rules

What about a bed & breakfast business? These Dream Homes are so beautiful, with typical square footage at around several thousand feet, and of course, the setting is usually in a resort area as was the Texas Dream Home at Lake Tyler. That was the idea of the 2005 TX Dream Home winner, but town regulations wouldn’t allow him to open a business on the property.

The moral of the story

The lesson here: do your homework before considering a home-based business. Whether it’s a B&B for guests or a doggy day care for 4-legged friends, make sure local rules don’t prohibit running a business out of your house BEFORE you open the business. With the B&B idea a bust, the winner eventually couldn’t keep up with the monthly carrying costs and after a few years, lost his Dream Home but even after the foreclosure – said he had no regrets, and he’d do it all over again.

So if my mother gets an unexpected knock on the door one of these springs, it could be HGTV informing her she is the winner. I’ll pack my bags to go with her on the “winner weekend” to visit the Dream Home. Then after she’s had a few hours to admire her new home, I’ll tell her to take the cash prize of $1 million+, say goodbye to the shiny new home and leave behind all the hidden pitfalls of her probably-not Dream Home.

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A New Way to Buy or Sell a House

October 18, 2013

I recently talked to someone selling his house and he told me about something he is doing that I had never heard of before. It helped him get a quick sale at his asking price without a lot of back and forth negotiating. Then, I read this article about the same thing and began to wonder if this is going to be a trend that picks up momentum across the country. Continue reading “A New Way to Buy or Sell a House”

Do Your Own Credit Check Before You Rent

August 14, 2013

I knew I needed to have pretty good credit before I rented my home, but I never thought I’d have to check the credit of my landlord. This was a lesson I learned several years ago after losing my security deposit to a landlord that eventually filed for bankruptcy. It all started six years ago when my wife and I moved to North Carolina. We were looking to purchase a home, but with so many on the market, we didn’t want to rush to buy, so we decided to rent for a few months. Continue reading “Do Your Own Credit Check Before You Rent”

Do Your Own Credit Check Before You Rent

July 24, 2013

Is There Hope or Doom on the Horizon?

July 19, 2013

For a long time now, I’ve talked to people who have found it relatively difficult to come up with a 20% down payment and banks have not been very flexible with the 20% down payment requirement. Things may be changing though. This article talks about what may be an encouraging sign for borrowers. It looks like there is some relaxing of the 20% rule now, with the return of the mortgage with a 10% down payment being seen more widely. Is this a sign of hope that banks are having money flow back into the economy? Continue reading “Is There Hope or Doom on the Horizon?”

To Buy or Not to Buy

July 18, 2013

I was reflecting on my “best investment decision” from my post last week and realized that the same caution that led me to not buy a home at the top of the real estate bubble also made me miss buying a home near the bottom of the real estate market last year. I looked at several properties that I liked and they were priced low enough that I could have easily more than covered the monthly costs by renting them out if I had to. However, there were so many good options that I suffered from “analysis paralysis” and ended up not buying any of them. Continue reading “To Buy or Not to Buy”

8 Home Buying Mistakes to Avoid

May 20, 2013

Exactly one year ago, our family completed a crosstown move in Charleston, South Carolina to get closer to family, my wife’s business, and our children’s schools, and thankfully, within a short little drive to Folly Beach. Any planned major purchase can add significant joy (and stress) as well as some expected and unexpected financial challenges and this was one was no different. Our new home was purchased through a short sale and although it was left structurally sound when we moved in there, there was a long to-do list related to cosmetic repairs, appliances in need of replacement, and an exterior in need of pretty significant landscaping and TLC. Continue reading “8 Home Buying Mistakes to Avoid”

You Want To Flip THAT House?

April 16, 2013

If Vanilla Ice can flip houses on the DIY Network and make money, then anyone can, right? After watching too many episodes of Flipping Vegas on the A&E Network, my husband decided he could make money by renovating a vacant house himself. Well, he wouldn’t be on his own. His son would be his partner through sweat equity. Could they buy low, make quick cosmetic improvements, and make some fast money? Continue reading “You Want To Flip THAT House?”

Why a Home is Still a Good Investment

March 21, 2013

Today is the first day of spring and among other things, that means many people will begin the process of buying a home. Despite the crash in the real estate market a few years ago, real estate remains a great investment. In fact, it can often make the difference of whether someone is able to retire. Here are some reasons why: Continue reading “Why a Home is Still a Good Investment”

Helpful Tips for Househunters

March 19, 2013

Thursday is the first day of spring, which means daffodils in bloom, Easter egg hunts, and new homebuyers coming out of hibernation. For employees considering a home purchase this spring househunting season, their decision could be the best or worst thing for their financial future. Your workforce may have opportunities to learn about the housing market by working with a local real estate agent or mortgage lender, but these professionals have an ultimate agenda to seal the deal. Employees can benefit from an unbiased workshop on the ABCs of real estate to help them make one of their biggest buying decisions. Helping your employees find their dream home can also benefit the company by encouraging a more stable, less transient workforce. Here are some of the topics that should be covered: Continue reading “Helpful Tips for Househunters”

How to Qualify For a Mortgage

December 05, 2012

Susan and I purchased our first home back in 1996. Like many newlyweds, our first home is what you might call a starter home. It was a modest, two-story, single family home on a small piece of property at the end of a cul-de-sac. After seven years (and three kids), we were ready to move on, and so we did. Continue reading “How to Qualify For a Mortgage”

How Can You Avoid Being a Slave to Your Mortgage?

November 16, 2012

Lately I have talked to a lot of people who are interested in buying their first home and with a combination of today’s low interest rates and a housing market that does not have prices appreciating rapidly, this might just be a great time to be in the market to buy a house. They understand that part of it but then don’t know how much house they can afford. They are getting different opinions from different people in their lives. So, are there any objective measures by which we can figure out how much house someone might want to consider buying? Sure… Continue reading “How Can You Avoid Being a Slave to Your Mortgage?”

If You Have to Do a Short Sale, Do It NOW

November 01, 2012

We talk to a lot of people who are struggling with underwater mortgages. Not only is the mortgage less than the value of home, but the mortgage payments often make it difficult for them to pay their other bills, especially if they’ve had a financial hit like a divorce or a job loss in the family. For some of them, it may make sense to just walk away from their mortgage obligations. Continue reading “If You Have to Do a Short Sale, Do It NOW”

Should You Pay Your Mortgage Off Early?

September 21, 2012

A topic that comes up all the time in my conversations with people looking for guidance is the usefulness of paying off a mortgage vs. keeping it. This article talks about three homeowners who developed plans to pay off their mortgages in order to reach goals that are important to them. One wanted to have his mortgage paid off prior to retiring so that his cost of living in retirement was very manageable. It’s easier to retire comfortably if your biggest cash outflow item (for nearly everyone I talk to their mortgage or rent payment is by far their largest monthly obligation) disappears. Imagine how little you would need to live on if you didn’t have to pay rent or a mortgage! Another homeowner wanted to pay off the mortgage prior to their children going to college so that their monthly income could be used to fund education for the kids and the kids wouldn’t be saddled with massive student loan debt upon graduation. The last one wanted to aggressively pay additional principal on their mortgage in a bigger house while they had kids at home and after the kids were gone, they downsized and used the equity in the big house to fully pay for a much smaller, empty nest house. These homeowners all had goals and reached them. Continue reading “Should You Pay Your Mortgage Off Early?”

Is it the Right Time to Buy a Home?

June 21, 2012

With both home prices and mortgage rates still near historic lows, is now the right to buy a home? That’s a question many would-be first time home buyers are asking themselves, myself included. For most of the first few years of my career, I was working on a full-commission basis and my unstable income and need to maintain a large savings account balance made me reluctant to commit to the upfront costs and monthly mortgage payments associated with home ownership. By the time my income was more stable, I was living in NYC, where buying just didn’t make sense to me, and then I was in law school with barely any income at all. As a result, I missed both the rise and the collapse of the real estate bubble. Continue reading “Is it the Right Time to Buy a Home?”

Remodeling – Will You Get Your Money Out of It?

May 07, 2012

My husband pulled a “home makeover – bathroom addition” on me! Knowing I was traveling on business, my husband thought it would be the perfect time to put new floors in our bathrooms, kitchen and entry ways. Now, he is a smart man so he didn’t totally surprise me with new floors – we spent many hours choosing the perfect color together. He did schedule them to be installed when I was away. Continue reading “Remodeling – Will You Get Your Money Out of It?”

What It’s Like to Live on a Boat

April 27, 2012

I was talking to one of our other financial planners, Erik Carter, a few days ago about his Extreme Early Retirement blog posts, and he pointed out something that I hadn’t noticed myself. I live a lifestyle that some would consider unconventional and might very well fall into the Extreme Early Retirement category. So, for those of you who are brave enough (my friends would say crazy enough…) to try something like this, here’s what I’ve done. Continue reading “What It’s Like to Live on a Boat”