Entries Tagged as 'Housing'

5 Things to do Before and After Buying a New House

5 Things to do Before and After Buying a New House

5 Things to do Before and After Buying a New House

Home ownership is the dream of most people. It represents the pinnacle of your accomplishments and the fulfillment of “The Great Australian Dream”. But wanting a home and actually owning one is a decision that requires serious thought. Home ownership is a transformative experience. It’s a great feeling and a monumental accomplishment but it also carries tremendous responsibilities. Thus, there are things you have to do before and after buying a new house.

5 Things to do Before Buying a New House

  1. Assess Your Financial Position. Buying a house will probably be your largest single purchase. Although your house will be an asset that has the potential to generate returns over time, it will still shake up your financial foundation. If you plan to apply for a home loan, you have to make sure your stream of income can accommodate the amortization without compromising your monthly expenses. The rule of thumb is: the cost of amortization must not exceed 28% of your monthly income.
  2. Evaluate Your Monthly Expenses. Home ownership means you are responsible for all maintenance and repairs. Your monthly summary of expenses would include power, water, telephone and Internet connection among others. If you have children, you will have to account for schooling needs, transportation and food as part of monthly expenses. Would your current stream of income accommodate these expenses in addition to your amortization?
  3. What Do I Want In a Home? When you’re dreaming of buying your first home, it’s fun to get lost in the fantasy of owning one with all the trappings your imagination can come up with. But when fantasy gets closer to becoming reality, you have to shift your mindset to “What I Want” to “What I Can Afford”. If you have a family, find out how many rooms, toilet and baths you need. There may be nicer suburbs but with pricier homes. You may have to compromise on the number of rooms. You should also consider your proximity from schools, the Central Business District or CBD, the commercial shopping centers and accessibility to public transportation. Draw up a list of what you want in your home and neighborhood. As you visit prospective homes and negotiate with more sellers, you should come up with a realistic view on the type of home you can afford.
  4. Where Do I See Myself in 5 Years? One of the greatest feelings is to wake up in the morning and realize this is the first of many days in your new home. It seems and feels like the beginning of a new chapter in your life. But in truth, change remains constant. Things could be different in 5 years. What would you be doing then? Will you have a new job in another city? Will your children be away for college? Will you have a new addition in the family? The answers to these questions will have bearing on your decision to own a house in the present day.
  5. Hire a Buyer’s Agent. Given the size of the investment and the process of owning a home, it would be a good idea to have a buyer’s agent on your side. A buyer’s agent is a real estate agent who represents the interests of the buyer. He or she has the experience and expertise to help you find a home that will meet your qualifications and budget. A buyer’s agent is a veteran of the negotiation process. When dealing with sellers and their agents, a buyer’s agent can tilt the negotiations in your favor. Once the contracts have been signed, final balance has been paid and procedures with the local government have been fulfilled, it is time to plan moving in to your new home. But there are 5 things you need to do once you’ve bought the house:

5 Things to Do After Buying a New House

  1. Pest Control. Many homes regularly have soil treatment and pest control scheduled every year. Find out the last time your new home underwent pest control. Ideally, you should have monthly pest control services. But if you have pets or if there are noticeably have more pests in the area, you should opt for bi-monthly services.
  2. Hire Professional Cleaning Services. Before you move in your things, have your new home cleaned by professionals. It is possible that the seller had the house cleaned before selling it but it is always better to be sure. If the home has carpets, these should be steam cleaned. If you want to bring in carpets and your upholstery is made of fabric, you should have these steam cleaned as well. Carpet and upholstery are breeding grounds for dust mites and other pests.
  3. Install Window Treatments. The first thing you should secure when you buy a new home is your privacy. Even before you open the boxes and unpack your things, make sure the living room and bedroom windows have curtains or blinds. You would not want the neighbors or passers-by have a fish-eye view of your home as you are unpacking. This is after all your home, not a fish bowl! Secure your privacy immediately especially the bedrooms.
  4. Make the Beds. Moving in will be one of the most tiring days of your life. You have to oversee the movers as they load up your things on the truck, check the inventory of items as these are brought in to the new house and direct the movement of furniture in their new location. At the end of the day, everyone will be exhausted. But for sure no one wants to sleep on the floor! So have your beds set up right away. If you have a head rest or wall padding have these installed along with the bed frames.
  5. Check Out the Nearby Town. Forget the boxes. You can open them and unpack later or the following day. Once you’ve got the curtains and beds set up, pack yourselves inside the car and head off to town! Check out the local market and be familiar with the establishments and available services. Immersing yourself in the culture and spirit of the town is one of the best ways to get settled. The feeling of home ownership is one that you would like to bottle up and cherish for all of eternity. You have shelter; a place to lie your weary head and start new memories. It is certainly one of the biggest milestones of your life.

Author bio

Felix works with the Flint buyer’s agent. He often blogs about real estate and businesses.

What does the new frontier of negative interest rates in the global arena mean for investors?

What does the new frontier of negative interest rates in the global arena mean for investors?

What does the new frontier of negative interest rates in the global arena mean for investors?

 

Cindy Yeap / The Edge Malaysia discusses “What does the new frontier of negative interest rates in the global arena mean for investors?”

“For RHB Research Institute executive chairman and chief economist Lim Chee Sing, NIRP “can only be seen as a temporary expedient to hold up financial markets”, albeit one that has little room to push for more economic growth in this relatively mature stage of the growth cycle.

“That means rising investment premiums and heightened market volatility will likely be the order of the day in the days ahead. Portfolio investors may have no choice but to build some degree of defensiveness into their portfolios to balance out the risks. This implies rising appetite for high-yield stocks,” Lim says.

“Even dividend stocks have caveats in the days ahead, largely due to their rich valuations vis-à-vis tougher conditions to grow at the same rate as before. For example, sin stocks might have to contend with higher taxes; the fees for telecommunications spectrum refarming have yet to be revealed; and consumer stocks have to contend with the possibility of a further tightening of consumer spending. Then, there is the higher labour cost.

“The focus should be on stocks with an improved business model, reasonable earnings visibility, strong cash flow, a dividend policy and, thus, sustainable dividend payments. Of course, one cannot ignore valuations but rich valuation stocks are still susceptible to a selldown should the global economy take a turn for the worse,” Lim adds.

“Gerald Ambrose, CEO of Aberdeen Islamic Asset Management Sdn Bhd, too, noted expensive valuations after a good run in recent years.

“We are keeping a close eye on notable high-yield companies, like the cellular phone companies, the brewers, tobacco companies and the REITs (real estate investment trusts). We’re currently about halfway though the 4Q2015 results season and to be honest, a lot of the better-managed companies have been able to find efficiencies to enable dividend payout to remain high. However, after outperforming for over a year, a lot of the high dividend yield companies are hardly cheap,” he says.”

BOTTOM LINE: Focus your strategy on yield and gold. Gold is an alternative when interest rates are negative adjusted for taxes and inflation.

Top 5 Senior Friendly Cities in USA

Senior Friendly Cities

Senior Friendly Cities

Retirement is an inevitable phase of life; one that requires decisions to be made in advance. Senior citizens look forward to spending this time in an enjoyable yet affordable location. Senior friendly cities should not only provide citizens with high quality of life but should also not put a strain on the budget. Here is a list of top 5 senior friendly cities to live in

1.Minneapolis – Minnesota

This city is ideal for citizens that are looking for health care facilities and safe environment. The city offers an excellent transportation system with low crime rates and a stable economy that offers ample job opportunities for senior citizens.

With a wide range of music and historic entertainment forums, this city provides an extremely gratifying social life to the citizens. Moreover, it offers several spiritual places that allow citizens to offer their religious prayers in sacred places.

2.Pittsburgh, Pennsylvania

With highly efficient transportation system and low crime rates, this city is suitable for citizens that are looking for security and good housing faculties. The economy of the city is also stable and study reveals that it enjoys extremely low levels of unemployment rates and offers high quality health care facilities.

The city is also known as the hub of entertainment and therefore is suitable for citizens who are looking forward at spending an enjoyable yet affordable time in the old age.

3.Boston-Cambridge-Quincy, MA-NH

Senior citizens who are looking forward to re-training or gaining further education would find this city full of opportunities as it offers more than hundred education institutes. Moreover, the city has a rich cultural heritage that allows senior citizens to visit music and historic venues and theatres that provide high quality entertainment.

The healthcare facilities within the city are of extremely high quality whereas the transportation system is also quite efficient. The city has an extremely alluring social life for citizens who want to engage with peers and friends and to visit various locations across the city. The crime rate within the city is also considerably low.

4.Provo-Orem, Utah

The city offers a healthy lifestyle to the citizens who want to age comfortably. The city offers high levels of security and safety while also provides the citizens with the ability to embark on new careers or start a business.

5.San Francisco, California

This city is ranked considerably high in the health and longevity continuum whereas the environment of the city is ranked as the best across the country and thus is ideal for citizens who want to enjoy extremely pleasant weather conditions around the year.

Apart from these factors, the city has one of the best transportation systems across the world and offers an extremely pleasing social life.  Moreover, the crime rate within the city is also not very high.

Author Bio
Andy is a keen and passionate blogger and he’s been doing it for almost five years now. His favorite topics include senior issues and healthcare. If Andy is not writing, his time is being consumed by distributing Patient Handling items and other merchandises regarding mobility.

I Wanted the Freedom

Mike Landfair freelance writer

Retirement

I started working at 15 years old, because my parents couldn’t afford the clothes I wanted to wear and I wanted the freedom my own money would bring. I started working  as a stock boy at Thom McAn shoes and then graduated to selling shoes. One summer while in college I sold shoes at Thom McAn, JC Penny and Nordstrom’s. I don’t recall saving any money for college, although my parents said I did. I spent all my money, as the song goes, on booze and women. The rest I just wasted.

The best thing I did was get a college education, Back then a private school cost about $5,000 a year including room and board, tuition and books. Public University was about $100 to $ 300 a term, if memory serves. I gave no thought to retirement what so ever.

I got married, got a job as a stock broker, bought a house and had kids. That was all the motivation I needed to be successful. If you were 30 and earned your age, you were doing well. This was the early 1970s. As I recall, to be in debt was the American way. We knew we would earn more money the next year than we did the past year.

There didn’t seem to be any worry about retirement. Companies had retirement plans. They offered were defined benefit plans with vesting and profit-sharing plans. There were no IRAs. There were Keogh plans for the self-employed like CPAs, doctors and dentists. Most of us continued to pile up debt, buying bigger houses and more expensive cars and toys and vacations. I don’t recall hearing about home equity loans. Only when I got a divorce after 17 years of marriage, did debt become a problem. I was still earning good money, but the cost of two households and child care was a giant burden.

Sometime in the 1980s, I learned about compound interest. Einstein called compound interest the ninth wonder of the world.

Here’s an illustration of how compound interest works. Suppose at 19 years old you invested $2,000 each year for seven years into an IRA. You put in $14,000 and then never invested in that IRA again. Then suppose your best friend waited until he was 26 and started putting $2,000 every year until he was 65. That would be 40 years and $80,000. Each received a 10% compounded return (meaning that each year you get interest on last year’s interest).

In the year when they were 65 they sat down and compared nest eggs. The friend who invested $2,000 a year until 65, had a nice retirement nest egg of $893,704. The smart kid who stated at 19, invested for seven years and quit, had a retirement nest egg of $930,641.

Here’s what I wished I had done with my money.

I wish had utilized compound interest to get rich in real estate. Suppose you buy a house for $300,000 and put down $30,000. At 7% the house doubles to $600,000. Assuming you didn’t take out a bunch of home equity loans to buy toys, your equity in your home would be $330,000, an eleven-fold increase not counting any reduction in your mortgage.

If it was a rental, and I’d used the income to pay down the mortgage, I could have paid down the mortgage rapidly and bought another rental and so on. I could have retired with rentals throwing off income. Hopefully the property would have appreciated.

One thing I don’t do is look back and say, “If only I’d a. If only I’d a bought Microsoft at $50 in the IPO. The decisions I made got me here to San Miguel de Allende as an expat, retired, writing as a freelance writer, loving a foreign country, happily married for 23 years, wonderful girls and two wonderful grand kids. I could be wealthier, but I could be poorer, too. One thing I’ve learned is to be grateful for whatever I have and value my health. Do things in moderation and don’t put poisons in your body; that includes your mind, too.

Personal Capital has a free net worth tool that can bring all of your accounts together in one place so you can monitor your income, spending, and investments on a single, easy-to-read screen. Once you have linked all your accounts, you can use their tools to manage every aspect of your finances.

Interest Rate Hike

Fed holds off on interest rate hike, downgrades economic forecast, Says the LA Times

“The economy still isn’t strong enough to handle it.

“Fed officials sharply downgraded their economic forecast for this year. They projected the economy would grow between 1.8% and 2% this year, well below the range of 2.3% to 2.7% in its last forecast in March.

“If they’re correct, annual growth would be the worst since 2011 and would be far from the breakout performance some economists had hoped for this year.”

The economy is stagnating, the middle class hasn’t seen any wage increases adjusted for inflation for at least 10 years. He is priced out of the housing market, over loaded with debt, lives paycheck to paycheck, and doesn’t have the extra money to get the economy moving. I think the people in charge ought to be fired for incompetence; 92 million people out of work or looking for work; almost 50 million people on EBT.

Why Housing Stocks May Be Slowing Down

I write a lot about housing and real estate as a freelancer for many real estate investors around the country. Generally it is positive about buying a house instead of renting. I also write about foreclosure and bankruptcy; how to avoid both and, if you can’t get out by yourself there are options, such as sell for cash quickly to those real estate investors.  I have noticed that the high priced houses are selling fairly quickly in the market place, but the lower priced houses are having trouble. I suspect it is because the average American hasn’t seen any income or wage increases for at least 5 to to years.

An article in Seeking Alpha caught my eye. Why Housing Stocks May Be Slowing Down. Isn’t that just the opposite of the latest news? Andrew Sachais writes:

  • U.S. housing permits are slowing.
  • Moreover, housing starts and homebuilder confidence are also declining.
  • As sentiment recedes surrounding the industry, housing stocks could remain in a range over the next few months.

U.S. housing stocks could remain range-bound as confidence declines amid slowing building permits and housing starts. U.S. housing stocks are represented by iShares Dow Jones US Home Construction(NYSEARCA:ITB).

In April, the building permits figure came in at an annual pace of 5.18%, slightly above the previous month’s reading of 5.12%. After peaking in 2013 at over 33% annual growth, building permits have slowed to a more modest level, seen below. As the rebound in permits slowed, so too did actual housing starts.

693913_14320850102693_rId4_thumb

I took a look at (NYSEARCA:ITB)and was surprised by what I saw.

Daily ITB

 

I see a big divergence in price to the indicator. Does it mean just a correction to the action or is it forecasting trouble ahead? Watch to see if ITB can make a new high and watch the bottom. The last low was above 25. Breaking 25 would be a clear signal that housing/construction has changed.

Remember no guarantees on anything I wrote.

Lack of Affordable Housing

Lack of Affordable Housing

The Richmond Times-Dispatch editorializes, about the disturbing report (commissioned by the Capital Region Collaborative, which is the offspring of the Richmond Regional Planning District Commission and the Greater Richmond Chamber of Commerce) that draws attention to the lack of affordable housing.
More than one-third of area households pay more than 30 percent of their income to keep a roof over their heads. Affordable housing has been an issue since before the housing bubble really inflated, and it has remained an issue after the housing collapse — which suggests the issue is systemic. The systemic problem is that regional inflation-adjusted housing costs have increased significantly, whereas inflation-adjusted incomes have increased very little, or not at all.

Looking at the chart above, the median household income is flat to down 5% since 2001 and median gross rent and median housing costs for owners are up 15% to 20% from 2001.

Politicians bemoan the fact that there is little in the way of affordable housing, yet the “barriers to entry” is a major reason for high rents and a systemic problem.

All builders face “barriers to entry” when they pursue a project. Among their biggest obstacles when building housing units are the high development fees and other demands on construction imposed by city governments. Throughout the country, our leaders preach the value of keeping communities economically viable. Yet their development restrictions are often so onerous that builders must charge excessively high rents in order to gain a return on investment. This also applies to commercial real estate.”
High rental rates usually cause families to buy rather than rent. Traditionally, buying a home is cheaper than renting. Studies show that families who own their homes pay just 22.1 percent of their income toward housing. The high rental rates bring on new supply of apartments until too many are built and the oversupply causes rents to shrink. When rates get low enough families find it cheaper to rent rather than buy.

Across the country rents have been rising. Nationwide, demand for rental housing by people between the ages of 25 and 34 has driven up rents to the point that in 2012 renters devoted an average of 32.9 percent of their income toward housing. The cost of rental housing is up 3.4% over five years. This should be a time of rising homeownership, yet, the homeownership rate in 2014 has fallen to 64.8 percent; it’s lowest in 19 years, according to U.S. Census statistics.
It’s a crazy time.

We have a new phrase. It’s called “cost burdened.” Approximately 35% of all households in the Richmond Regional Planning District are “cost burdened.” The U.S. Department of Housing and Urban Development (HUD) established the term “cost burdened” to define households that need more affordable housing. HUD defines cost burdened households as “families who pay more than 30% of their income for housing… and may have difficulty affording necessities such as food, clothing, transportation, and medical care.” Households that pay more than 50% of their income for housing are considered severely cost burdened and may face even harder choices between paying for housing and other necessities. Approximately 15% of all households in the Richmond Regional Planning District pay more than 50% of their income for housing.
What is the solution? The Richmond Times-Dispatch suggests the solution to housing affordability is pay people more money. Housing cost burdens span all income levels, but are most common among households with low incomes (80% of AMI or lower) and moderate incomes (80-120% AMI). Of the region’s cost burdened households, more than three-fourths are in the low-income category. A family of four with a household income below $58,300 would be classified as having a low income.

If we made sure all workers made $29 per hour for a 40 hour week for 52 weeks, a worker would make $60,320 per year. No more top down approaches as the Report suggests. Just pay people more! It’s a crazy time.

Nobody thinks of the consequences, such as restrictions by Obamacare that are causing employers to hire workers for less than 40 hours per week; or the adjustments that will be made in prices. It stands to reason that if you pay a waiter $29 an hour, you will have to raise food prices to cover the cost. How about the means tested benefits a family receives because of their low income. Many of those benefits will be lost. How about higher incomes equal more taxes. I am not sure a simplistic solution of paying people more will really benefit the people you are trying to help.

Americans have worried for years and years about affordable housing. We have built housing that had to be bull-dozed because of massive failure. We have subsidized housing and passed that burden on to the 30% who pay taxes. No one has tried loosening restrictions on builders that would help them lower costs of building. Maybe we don’t need more government, but more market solutions.

Spooky Signs for the Housing Market

Mike Larson chronicled many of the challenges housing faces, from tighter mortgage standards to fearful buyer psychology to high levels of student loan debt — but the charts he’s about to share with you should really hit home.

First, there’s the quarterly homeownership rate that the Census Bureau tracks. As he mentioned earlier, it just sank to 64.4 percent in the third quarter. How bad is that? We haven’t seen the percentage of Americans owning their homes this low since 1995:


Click for larger version

Second, there’s demand for mortgages used to buy homes (as opposed to refinance existing debt). You can see from this chart below that purchase application volume just fell to the lowest level since 1995. That’s almost 20 long years ago!


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Third, there are house prices themselves. You can see in the following chart the massive, initial bubble in prices from the mid-2000s … and the second “Echo Bubble” the Federal Reserve’s policies helped inflate over the past few years.

But you can also see that year-over-year price growth is rolling over again — yet another sign of fading momentum in the housing market!


Click for larger version

Bottom line: There’s been a lot of crowing from the likes of Ben Bernanke, Janet Yellen and present and past Fed policymakers. They can’t stop talking about how their benevolent interest rate and QE policies actually help Main Street America, rather than just Wall Street fat cats.

But is there any evidence whatsoever of that being the case in housing or mortgages, the single-biggest market the Fed itself said it was trying to help?

Heck, Janet Yellen talking about the success of Fed policy regarding housing reminds me of George W. Bush landing on the USS Abraham Lincoln aircraft carrier in front of a “Mission Accomplished” banner in 2003. He was wrong about Iraq then, and Fed apologists are dead wrong about housing now!

I’m not trying to make this Halloween any scarier than it already is by pointing all this out. But facts are facts as sure as pumpkins are pumpkins.

Until next time,

Mike

Mike LarsonMike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post,Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.

The investment strategy and opinions expressed in this article are those of the author and do not necessarily reflect those of any other editor at Weiss Research or the company as a whole.


Bonds-the fourth quarter trade of 2014

If you have been paying close attention to the stock market, market internals/breadth, and bonds for the past three months, you’ve likely come to the same conclusion that I have.

The US stock market is showing signs of severe weakness with the market breadth and leading indicators pointing to a sharp correction for stock prices.

With fewer stocks trading above their 50 and 200 day moving averages each week, while the broad market S&P 500 index continues to rising, this bearish divergence is a red flag for long term investors.

When a handful of large-cap stocks are the only things propelling the stock market higher while the majority of small-cap stocks are falling you should keep new position sizes smaller than normal and start moving your protective stops up to lock in gains/reduce losses in case the market rolls over sooner than later.

Small cap stocks are typically a leading indicator of the broad market. The Russell 2000 index is what investors should keep a close eye on because it’s the index of small-cap stocks. Since March of this year, the Russell 2000 been trading sideways and actually making new lows. This tells us that big-money speculative traders are rotating out of the stock market and into other investments like high dividend paying stocks, blue chips, and likely bonds.

Looking at the chart below I have overlaid the S&P 500 index and the price of bonds. History has a way of repeating itself; although it may never feel the same and the economy may be different, price action of investments have the tendency to repeat.

In 2011 we saw the stock market and bonds form specific patterns. These patterns clearly show that money was rotating out of the stock market and into bonds. During times of uncertainty in the stocks market money has the tendency to move into bonds, as they are known as a safe haven. Bonds tend to reverse before the stock market does, so if you have never tracked the price chart of bonds before, then you should start.

From late 2013 until now bonds and the stock market have repeated the same price patterns from 2011. If history is going to repeat itself, which the technical and statistical analysis is also favoring, we should see the stock market correct 18% to 30% in the near future. If this happens bonds will rally to new highs.

It’s important to realize the chart above is weekly. Each candle represents five trading days, and four candles represents one month. So while this chart points to an imminent selloff from a visual standpoint, keep in mind this could take 2 to 3 months to unfold or longer. The market always has a way of dragging things out. If the market can’t shake you out, it will wait you out.

So if you are short the market or planning to short the market be very cautious as it could be choppy for the next several weeks and possibly months before price truly breaks down and we see price freefall.

To get my pre-market video analysis each day, and trade alerts visit: www.thegoldandoilguy.com

Chris Vermeulen

Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. – Partnership Program

Calgary Is Booming As Is Calgary Real Estate

Downtown Calgary

Downtown’s ever changing skyline. Richard White for the Calgary Herald

Mover Mike reaches many areas of the world and I am proud to say that Calgary, Canada is one.  Calgary is the fifth largest metropolitan area in Canada with a population of 1,096,833,. It is situated at the confluence of the Bow River and the Elbow River and approximately 50 miles east of the front range of the Canadian Rockies.

The economy of Calgary includes activity in the energy, financial services, film and television, transportation and logistics, technology, manufacturing, aerospace, health and wellness, retail, tourism sectors, and real estate. Calgary is home to the second-most corporate head offices in Canada.

Calgary is booming as is Calgary real estate. The metropolitan area has experienced a record-setting increase in net migration of more than 76,000 people between July 2011 and July 2013. The area is on track for a net gain of 40,000 in 2014. The Calgary Sun notes, “The people moving here, and the companies hiring them, need to have housing they can afford or the people will stop coming here and companies with available jobs will move to where housing is more affordable. Unfortunately, Calgary’s growth strategy does not promote housing affordability.”

If you are considering a move to Calgary, hire a professional among the many Calgary real estate agents to help with your search for housing.  Consider The Cliff Stevenson Group. Cliff Stevenson has recently built a new website that offers tons of information, including real estate search tools, buying and selling support, a blog with helpful real estate opinions and information, and market statistics.

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