How to Budget for a House That You’ll Rent Out

by Justin Weinger on September 2, 2015

Investing in a home that you can rent out, whether it’s a single-family or a multi-family property, is a great way to make some extra money each month. You can use this to pay off the mortgage on your primary residence or to pay off other bills that you incur, so an investment property is a great way to give yourself an added level of assurance that you’ll always have the money you need to take care of your family.

But how can you budget for a house that you’re planning on renting out? Continue reading for a few tips.

Things to Consider Before Shopping

Before you even begin searching for your investment property, consider the following:

  • How much are you willing to pay, based upon how much you can actually afford?
  • What type of rental property are you in search of?
  • Do you have any particular neighborhoods or cities in mind?
  • What’s the average rental rate for properties in the area(s) that you’re interested in investing in? In other words, how much can you expect to make?
  • What’s the return that you’re anticipating from your investment?

Set Up Financing Options

A common mistake that many homebuyers make is that they start looking for properties before they’ve actually arranged their financing options. This can lead to issues in the long run when you realize, for example, that you can’t afford as much house as you originally anticipated, or when a house you want goes to another buyer who’s already been pre-approved for a loan.

So before you head out and shop for an investment property, speak with a bank or lender like Crawford Park Financial to find out how much they’re willing to give you. Setting up your financing options ahead of time will make you a more prepared buyer, and you’ll be a step ahead of other buyers.

Start Saving and Set Up Your Budget

Once you answer the above questions, you should have a clearer idea of just how much house you can afford, and you should also have a better idea of how much you can generate in income from the rent that you’ll charge.

When you have your budget in place, you can begin saving on a consistent basis, even if it’s just a small amount of money that you put aside from each of your paychecks. This will help you put together a down payment for your rental property.

Consider Repair Costs

Investing in apartments isn’t always a smooth endeavor, especially when you’re dealing with properties that have been previously rented out and may be in desperate need of repair. So in addition to budgeting for the actual home price, you should also have enough money set aside to make repairs to encourage renters to settle in and pay your rental rate.

Now that you know what it takes to budget for a house that you’ll rent out, you can find the property that suits your needs and increase your monthly income easily.

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Beat the boy racers – strike with an accident claim

by Justin Weinger on July 7, 2015

Racing over B roads and C roads, you allow your foot to mash the accelerator pedal. You’re Han Solo hitting light speed; you’re Vin Diesel revving past an oncoming train; you’re definitely not just a moron in a boxy Vauxhall Nova.

Your speedometer is teetering further to the right than a Conservative party conference and you can feel it in your bones – no one’s going to stop this feeling.

That is, until someone stops that feeling.

Before you know it, a Mini Cooper emerges from nowhere in your eyeline. The steering wheel suddenly feels out of your control as you swerve off-road and plummet into the depths of a mud-laden ditch.

Although your neck feels cricked and you’re a little shaken up, you’re safe – you’ve fared better than most.

According to government statistics, there were 194,477 road accidents of all severities in 2014. Of that figure, almost 2,000 were fatal.

The claim game

Yet some sputtering petrolheads will simply shrug their shoulders at those figures, seeing them as a necessary part of the thrill.

For those without respect for the road, wider punishments have to be in place – you’ve got to hit those speedsters in their wallet.

Car accident claims are the great equalizer when it comes to justice, helping victims receive the closure they need.

But how do you start a claim if you’ve suffered a collision?

Know the process inside-out

For a start, just pick up the phone. From there you’ll be put in touch with an experienced solicitor who’ll ask you to detail your accident.

It can be a painful process, laying out the after effects of a nasty bump. But when your representation has all the facts, they can decide if your case can hold its own against the courts.

If your case is accepted, it’s time to don your Sherlock hat and gather evidence.

CCTV and speed camera footage, witness testimonies, doctor and police reports and MOT checks – anything could prove to be the linchpin to your argument when it’s presented to the courts.

Once you’ve helped your representation with evidence, you’ll largely be left in the backseat while solicitors duke it out in increasingly complex ways.

By this point you should have complete trust in your solicitor – otherwise your case runs the risk of collapse.

This trust will be put to the test in the courtroom. But amidst the examinations and cross-examinations, there’s a high chance of victory.

So if you’ve suffered at the hands of a boy racer, you know who to call – it could bring you closure and a heftier bank balance.

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The Top 10 Best Ways to Pay Off Debt – Part 3

by Justin Weinger on June 27, 2015

Hello and welcome back for Part 3 of our 3 Part blog series on the Top 10 Best Ways to pay off your debt. We’ve already given you 6 excellent ways to do it and, in today’s final blog, we have 4 more, so let’s get started. Enjoy.

  1. Use the threat of bankruptcy to renegotiate terms with your creditors.

While this might sound a bit unethical or even sleazy, the fact is that if you’re deep in debt and have nowhere to go except bankruptcy, letting your creditors know this might be the impetus they need to work with you. The first thing you need to do is let them know about your situation and tell them that, unless they’re able to renegotiate their terms with you, bankruptcy will be your only choice. Once they know this you can ask for a new and, hopefully, lower repayment schedule, or a lower interest rate.

What you want to do is let them know that, unless they help you, they won’t be getting anything. In most situations you’ll find that creditors will do everything they can to protect themselves from getting nothing. Most will be more than willing to negotiate if they’re fearful that they won’t get any money and, frankly, you really don’t have anything to lose from asking.

  1. Borrow money from your 401(k) to pay down your debt.

Most 401(k) savings plans offered by employers allow you to borrow as much as 50% of the face value of the account, or $50,000, whichever is the smaller number. Since interest rates are usually one or two points above prime, they are instantly cheaper than the interests on almost all credit cards. This makes using money from your 401(k) to pay down your debt an excellent option. Interestingly enough, the interest that you pay is not only lower but you pay it to yourself, not the lender, which is extra gravy for the goose.

  1. File for bankruptcy.

This is really your last resort but, if there’s simply no way to pay down your debt using the other eight ways that we talked about in these 3 blogs, you might not have any other choice.

Be aware that declaring bankruptcy comes with a number of substantial disadvantages, including the fact that your credit report will keep your bankruptcy on file for at least 10 years. This will make it extremely hard for you to get credit during that time. Also, most people don’t realize that it actually costs money to file for bankruptcy and, if you’re flat broke, you might not actually be able to.

Bankruptcy laws have gotten much tougher in the last few years also and, while you might be able to file, you might not be able to get 100% relief from all of your debts. For example, child support, alimony, student loans, legal judgments against petitioner and taxes aren’t discharged when you file for bankruptcy.

  1. Don’t go into debt to begin with.

While many of you might be saying “well duh”, the simple fact is that if you don’t go into debt you won’t ever have to get out of debt. That might be easier said than done but the fact is that nobody’s holding a gun to your head and telling you that you have to max out your credit cards, purchase the most expensive automobile on the lot or spend every last dime that you learn.

If you’ve learned anything from our 3 Part blog series, hopefully it’s that paying down debt isn’t easy. If you want to make your life much easier, do your very best to not go into debt to begin with.

We hope you’ve enjoyed this 3 Part Blog series and that it’s opened your eyes to the options that you have. If you have questions or comments, drop us an email or leave a comment and we’ll get back to you ASAP with answers and information.

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The Top 10 Best Ways to Pay Off Debt – Part 2

by Justin Weinger on June 20, 2015

Hello and welcome back for Part 2 of our 3 Part blog series on the Top 10 Best Ways to pay off debt. In Part 1 we gave you 2 excellent ways to pay down your debt, including something called “snowballing”.  If you’re set to learn a few more excellent debt payment methods, let’s get started. Enjoy.

  1. Ask family or friends to lend you money.

This isn’t exactly a method that your financial advisor will give you (although some will) but asking a family member or friend to loan you money to pay down your debt is still a viable option. In most cases you’ll get an excellent interest rate (or maybe none at all) and a little bit of extra leeway in terms of time to pay them back. It would probably be an excellent idea to have a written agreement and a clearly established repayment schedule in order to make sure that you don’t end up with a ruined relationship and resentment. Other than that, if your rich Uncle Bob has the money, why not ask?

  1. Use your life insurance and borrow against it.

If you have life insurance with a cash value, you can borrow against that policy at rates that are typically far below those of commercial rates. You can also take a bit more time repaying the loan, but do repay it as fast as possible because, if you pass away before it’s been repaid, the outstanding balance that’s left on it will be deducted from the face value paid to the beneficiary, as well as interest. That might end up being a real burden on your loved ones, so do your best to pay it back as fast as you can.

  1. Take out a home equity loan.

Home equity loans have been used for years to help people pay for all sorts of things and paying off debt is one of them. If you’ve owned your home long enough that it’s accumulated equity, getting a home equity loan, or HEL, line of credit is an excellent idea. The reasons are two; using the loan to pay down your debt allows you to trade and 18% loan for a 6 or 7% loan and, if you fully itemize all deductions on your income tax returns, a home interest loan is usually deductible.

One problem that you definitely must avoid (and many don’t) is paying off your debts with a home equity loan and then starting to use the credit cards that you paid off, putting yourself into debt once again. The problem now however is that you not only have credit card debt you also have home equity loan debt. The point is, pay off your home equity loan before you start using those credit cards again.

  1. Use the cash in your savings account to pay down your debt.

Many people look at this option as unreasonable, but using cash from your savings (and other investments) to pay down debt actually makes sense. Think about it this way; unless your savings account and other investments are paying 18% (before federal and state taxes) the debt that you pay down using that money would actually be the same as getting an 18% return with very little risk. In fact, as the interest rate on your debt gets higher, paying it off with your savings becomes much more attractive.

That’s it for Part 2 of our 3 Part blog series on the Top 10 Ways to pay off your debt. We hope that some of the advice and ideas that you’ve heard have been helpful. If you have any questions you can drop us an email or leave a comment and will get back to you right away with information and answers. Of course be sure to come back for our final part, Part 3, soon.

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