renting

How a Sale and Lease-Back Can Help a Homeowner Avoid Foreclosure

Toni Husbands — Mon, 29 Oct 2018 08:00:12 +0000

George Arnold bought his Chicago bungalow in 2009. This fixer-upper needed a lot of TLC, but was in a good neighborhood. He'd found a diamond in the rough. Arnold set to work bringing the home back to life through a series of major renovation projects. Soon after, his mother's health took a turn for the worse.

"I kept my mother out of the nursing home for two years before she passed away," he recalls. His devotion to his mother is admirable — but it caused him to fall behind on bills.

To avoid losing the home and all the money he'd invested, Arnold agreed to sell his home to an investor. He'll rent it from that investor for two years with the option to purchase the home again at a fair market price.

Losing your home to a foreclosure or tax sale is not the only option for struggling homeowners. A short sale lease-back allows a homeowner to sell their home and lease it back from the new buyer, forming a landlord-tenant relationship that lasts for the term of the lease.

There are several ways to get a short sale lease-back on your home. We'll discuss three below.

Investor short sale lease-back

Struggling homeowners might be able to save their homes by selling the home to an investor before the foreclosure. Investors looking for rental property profit from the steady income and potential discounted purchase price. The short sale will have to be approved through your lending institution. Once approved, the homeowner can avoid a credit-crushing foreclosure, rebuild their credit in the ensuing years, and stay in the home.

At some point in the future, the previous homeowner and investor can negotiate a fair sale price. This allows the homeowner to recover their property and the investor profits on the sale.

Lender short sale lease-back

Homeowners can also check on lease-backs available with their mortgage lenders. Some lenders or mortgage holders will accept a lease-back arrangement in lieu of foreclosure by handing over your deed. In this situation as well, a suitable purchase arrangement can be worked out in the future once the homeowner has been able to recover financially and can qualify for a loan on the original home.

Nonprofit short sale lease-back

Homeowners can also turn to nonprofits that are approved by the Department of Housing and Urban Development. These HUD-approved nonprofits have been given the green light to conduct lease-back transactions after a 2011 change in the Making Home Affordable program.

Homeowners may be required to attend financial management training as a requirement for participating in a short sale lease-back program through HUD-approved nonprofit organizations.

Sellers beware

Homeowners facing foreclosure can be particularly susceptible to mortgage rescue scams or people who will take undue advantage of a homeowner's distress. Sellers attempting to avoid foreclosure must be diligent to ensure they are dealing with reputable people or businesses.

Do your research

Check with your state attorney's office, the Better Business Bureau, or the local Chamber of Commerce to find information about anyone before conducting the transaction. As with predatory lending, unscrupulous investment companies are quick to prey on people in a desperate, high-emotion situation where they fear losing their home. A quick Google search may return reviews about the company on various message boards that you can use to help make a decision. Try to locate individuals who've had a personal dealing with the investors to ascertain whether the company is reputable or not. (See also: How to Protect Yourself From Predatory Lending)

Seek legal counsel

Shawn Kunkler, Realtor with Paragon Real Estate Group and author of the Insider's Guide to Home Buying, San Francisco Edition, advises homeowners to work with a real estate attorney to set up a proper lease-back agreement. "This is not difficult to include, but does need to follow the correct protocol," he says. Each state may have specific requirements that need to be followed. It's best to work with a real estate attorney who has experience with short sale lease-back transactions. Contact the Bar Association for your state for referrals.

Keep your word

Homeowners fall behind for many reasons. If you're able to avoid a foreclosure with a short sale lease-back agreement, resolve to keep this new agreement. Make that a priority. Kunkler notes that if an agreement is going to fail, it's most often because the leasing party fails to honor the agreement.

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This article is from Toni Husbands of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Repairs That Aren't Your Landlord's Responsibility

Mikey Rox — Fri, 22 Jun 2018 09:00:22 +0000

One of the benefits of being a renter as opposed to being a homeowner is that the landlord is responsible for many costly home-improvement projects, like replacing a leaky roof or updating dying appliances. But not all domestic damage is his or her responsibility. What exactly are you on the hook for? Find out which home repairs are not your landlord's problem — and start saving up for them now.

1. Replacing light bulbs, batteries, and HVAC filters

The landlord can't control how much you run the lights, so replacing bulbs when they burn out is your responsibility. The same may be true for replacing batteries where necessary, including those in smoke and CO2 detectors, which should be outlined in your lease so that there's no confusion about who's supposed to keep up with home safety. Many leases will also require tenants to replace air filters in HVAC systems on a regular basis (ideally every three months, but landlords often supply the filters).

2. Unclogging backed-up drains that you caused

Here's what I've learned from personal experience: Don't put eggshells or potato skins in the garbage disposal if you don't know how to unclog the sink. Otherwise, it'll cost you a visit from the plumber, because this is definitely not your landlord's problem. Same goes for the toilet — you do the crime, you do the time. Unclog it yourself or call someone ASAP before the problem turns into more damage from overflowing water and other "stuff."

Practice other considerate grooming habits, too — like cleaning your hair out of drains to keep pipes in working order. If your landlord has to come over to do this for you, he or she has every right to tack an extra fee onto your rent that month.

3. Certain pest infestations

Assuming that you're moving into a rental unit that doesn't have any existing vermin problems (you should verify this independently before signing a lease; don't just take the landlord's word for it), you may be responsible for any rodent or bug infestations that occur after you move in. Be sure to check the terms of your lease as well as any state-specific laws regarding pests such as bedbugs.

Certain living habits, like leaving old food out or failing to regularly take out the trash, can attract ants, cockroaches, or even rats. If your landlord finds you responsible for the infestation, you will likely have to pay up to get rid of the problem.

Other bug or rodent infestations can happen naturally. Termites, for example, can infest any building regardless of your living habits. In this case, it's on the landlord to get an exterminator. (See also: 6 Cheap Ways to Get Rid of Household Pests)

4. Lawn care and snow shoveling at single-family homes

Unless your landlord has agreed to handle the mowing and snow shoveling in the single-family home you're renting, you'll need to get out there yourself. While you can let the lawn go for a little while, you're legally required to have your sidewalk shoveled within a few hours after a snowstorm ceases. Fail to do it and you could face fines from the city, which also will be your responsibility. If you live in a multiunit dwelling, however, the landlord generally takes on this responsibility him or herself or hires someone to do it.

5. Damage to property due to your negligence

Being a decent human being means taking responsibility for damage caused by your own negligence — accidental or not — and that of your family, friends, kids, and other guests you invite into the home. Your landlord is not responsible for anyone's carelessness; you can't punch holes in the walls during an argument and expect them to fix it. And please, don't lie to get out of whatever it is you or they did to damage the property. Be an adult, pay for the repairs, and move on (ideally with people who don't destroy things).

6. Carpet cleaning and repainting

One of the biggest costs to landlords is replacing carpet ruined over time by tenants. I've seen some of this damage myself, and I'm frankly baffled by how disrespectful some people are and the lengths they'll go to try to skirt the cost of cleaning or replacing the carpet.

Repainting the walls their original color (if you've painted them) is also your responsibility. This should absolutely be a clause in your lease, but you should always contact your landlord before making any paint decisions. (See also: 7 Smart Ways to Get Your Apartment Deposit Back)

7. Pet damage

I once had a tenant who was not authorized to bring an animal into my shore rental, but did so anyway. When I questioned her about it, she denied it. I explained to her the strong smell of feline urine upstairs, at which point she revised her story to having a dog in the house briefly. I wasn't born yesterday, lady. The dog bit was a lie, too — but it didn't matter what kind of pet was in my house. It was unauthorized, and I passed the cleaning bill right along to her.

8. Misuse of appliances that cause them to malfunction

You break it, you buy it — that's the rule with appliances in your rental that you've damaged. Whether you've caused a dryer fire from neglecting to clean out the lint trap, burned out motors from working appliances too hard, or caused the dishwasher to overflow because you thought laundry detergent would work in lieu of dishwashing liquid (shout-out to my ex-husband), it's all your responsibility. If any appliance just stops working, however, it's probably on your landlord — so give 'em a call.

9. Holes in the wall from frames and shelving that you hung

Before you can get your security deposit back, your landlord will want to make sure a few tasks are completed, including patching up holes you've put in the wall from frames, shelves, and other damage you may have caused to the drywall and paint from adhesives. Skip out on it and you can kiss your money goodbye.

10. Anything else outlined in the lease

Read your lease closely before signing. Most issues of landlord/tenant responsibility are outlined in the document. Keep it on hand to go over again if issues arise so you can quickly determine whether or not the burden and financial responsibility falls on you. Once your signature is on the lease, you're legally bound to it. If you feel like something outlined should be the landlord's responsibility, discuss it beforehand to revise if necessary. After that there's no wiggle room — it's either your problem, or not.

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

How to Respond to House-Shaming

Tim Lemke — Fri, 25 May 2018 09:00:16 +0000

You've heard it at the dinner table when visiting Mom and Dad. You've heard it from your cousin Phil. You've heard it from friends out at Happy Hour. "Why are you renting a home when you should be buying? Don't you know you're just throwing your money away?"

There's a lot of pressure to buy a home instead of paying rent. And, yes, there are some very valid financial arguments for homeownership. But buying a home isn't the best choice for everyone, and there are many reasons why it may not make sense for you. Unfortunately, shaming people into feeling bad about renting has become a real thing.

How can you respond to these people? Here are some retorts for those house-shamers in your life. (See also: 5 Money Moves to Make Even If You Don't Plan to Buy a House)

1. Renting is cheaper

This is not always the case, but is often true, especially when you factor in things like property taxes, association fees, and maintenance. NerdWallet last year reported that the median monthly cost of homeownership was 54 percent higher than renting nationwide — and higher than 90 percent in some states.

Many families choose to stretch their budgets when they buy a home, and that's not always the wisest choice. If you are able to live within your means while renting, but aren't sure if you could make ends meet if you bought a home, don't feel pressured into buying.

2. There are multiple ways to build net worth

Owning a home can be a great way to build your overall net worth, but it's not a requirement. As long as you are saving more than you are spending, you're increasing your net worth. And you can give that a boost through a variety of other means, including investing in stocks, bonds, or collecting rare baseball cards. You have the right to choose your own methods for building your net worth. There is no magic formula. (See also: 10 Ways to Increase Your Net Worth)

3. A mortgage is still debt

Unless you are swimming in cash, you're likely going to have to borrow money to purchase a home. In fact, most homeowners are dealing with mortgage loans of tens or even hundreds of thousands of dollars that will take decades to pay off.

Taking on a mortgage loan is nothing to take lightly, especially if you already have debt from student loans, credit cards, or automobiles. You have a right to decide what debt load you are comfortable with. Some people choose to live 100 percent debt-free, and that's perfectly fine. You should resist any pressure to go beyond the debt load you're comfortable with.

4. You need to get your financial house in order first

It doesn't make sense to try and buy a house if your financial situation is a mess. Perhaps you have a low credit score or big loans to pay off. Maybe you've been dealing with inconsistent income due to a job loss or struggles with your business. Or maybe you are just learning to get your own personal spending under control in order to save money.

If your finances aren't in good shape, it may be hard to buy a home in the first place and any home you do buy may just place additional stress on your money situation. If you feel the need to respond to a would-be house shamer, a simple reply of, "We need to get our financial act together first" is a reasonable response.

5. You simply may not want a house

The bottom line is that you may not want to own a home in the same way you have no interest in owning a dog, a fur coat, or a herd of alpacas. People can make all kinds of financial arguments in favor of homeownership, but they are meaningless if you don't actually want a house. A house comes with work and responsibilities that you may not have interest in. You may not be drawn to the idea of settling into a single place. Homeownership just may not be your thing, and that's fine! If you don't want a house, don't buy one. (See also: 4 Worst Reasons to Buy a House)

6. You have other priorities

You may one day like to own a house, but choose to use your time, energy, and money on other pursuits at this point in time. Perhaps you'd like to finish graduate school or pay off student loans first. Maybe you want to focus on building your business or your career. Perhaps you want to focus on your health after recovering from a long illness. Maybe you'd like to spend a few years with your new spouse before taking on the responsibilities of homeownership. There are a million things you can do to better your life at any given time, and buying a home is just one option.

7. It takes time to save for a down payment

One of the easiest ways to get into financial trouble is to purchase a home with little or no down payment. The less money you put down, the more money you have to borrow, and the larger your monthly mortgage payments will be. Putting less than 20 percent down on a home might mean you'll be required to buy private mortgage insurance, and that adds cost to your loan. The sensible way to buy a home is to save as much as you can and put down a healthy down payment, thus keeping your monthly payments low and putting you on the fastest path to building equity and wealth. (See also: 4 Easy Ways to Start Saving for a Down Payment on a Home)

8. You're not settled on where you want to live

It takes time to get a strong sense of whether you want to settle down in a specific community. Maybe you aren't quite settled in your career. Maybe you or your spouse are in the military and know you may have to relocate within a year or two. If you buy a home and decide to move within a few years, you could be faced with the pressure and work of selling the home. If you have not had time to build equity in the home, you may not make much profit on the sale and may even lose money. This also comes down to comfort level. If you simply don't feel right buying a home in a community you don't plan to settle into, renting is perfectly fine.

9. It's nobody's business

Look, you're going to get all kinds of advice on how to best manage your money. A lot of that advice is great. Some of it is not. But ultimately, the decisions you make with your money are yours and yours alone. The choices you make with your money should be based on your own personal situation and values. The next time someone questions why you haven't purchased a home, it may simply be best to say, "None of your business."

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This article is from Tim Lemke of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

10 Red Flags to Look Out for When Renting Your First Apartment

Paul Michael — Fri, 25 May 2018 08:30:31 +0000

Are you ready to fly the nest? If it's time to find a new apartment, there are some things to look out for before signing a rental agreement. If you don't know what to be wary of, your first place could put you in financial jeopardy and even physical danger. These are the biggest red flags. (See also: 10 Questions to Ask Before Signing a Lease)

1. A limited selection of photos

If the ad for the apartment features just one or two photographs of the place, don't even bother making a call to see it. Landlords know that great photos help sell a place. It's the first thing any potential renter will look at, and they will scour them before looking at features and price. If there are just a couple of photos, perhaps blurry or only showing one room or the outside of the building, the landlord is hiding something. Either the unit is in awful condition, it's small and dark, or it's got other issues that he or she would rather not talk to you about until you get there; and that's when the hard sell begins. Don't see any place that doesn't show you all the interiors and exteriors in advance.

2. Bars on the windows

You may think it's good to have an extra layer of security, but let's be honest; bars mean trouble. Clearly the apartment is in an area rife with crime, and if the landlord has taken to adding bars to the windows, it's bad. The only reason bars are up is because it's a last resort to prevent break-ins, vandalism, and other crimes. If you see bars, don't even enter the building.

3. The rent is too good to be true

Landlords are in the business of making money. Whether it's just one person renting out one property, or a whole agency renting out hundreds of homes, the end goal is profit. So if you come across an apartment that is priced way under the going rate for that area, be afraid. Be very afraid. It could be a bait and switch, which is illegal — when you call, suddenly that apartment at that low price is no longer available, but there's a similar one that's way more expensive. Or, there's one that's the same price but has fewer rooms and is in an awful neighborhood.

Another reason could be that there is a major problem with the rental unit. For example, it's directly above a loud bar or restaurant, or it's near a high-traffic area that ensures you'll never get any sleep. The price may also be compensating for unusually high utility bills, pest infestation, or significant problems with the structure. The chances are, a super-low price is simply a worm on a hook, and you're the fish being reeled in. Don't bite.

4. Emails coming from different people

When you reply to an ad for an apartment listing, it's fairly common to get a few different reply addresses at first. One could be an auto-responder saying someone will be in touch, or it could come from a third party domain like Craigslist. However, if the email addresses keep changing, and the name of the person you're dealing with is also going through an identity crisis, you have a potential scammer on your hands. Take a look at the domain names, see if the person has a presence on LinkedIn, or if there is a legitimate website linked to that landlord or agent. If they're a ghost, you should steer clear of this property. And if the emails are filled with typos and other errors, that can also be a bad sign. (See also: 6 Ways to Apartment Hunt on Craigslist Without Getting Scammed)

5. The landlord or agent isn't available

If you're having trouble getting in touch with the landlord now, at a time when he or she should be extremely keen to talk to you, imagine how tough it will be when you're a tenant. At this stage in the process, you represent money. They want the apartment rented out, and to be making a profit ASAP. If your emails go unanswered for days, your calls go to voicemail, and you are having to play detective to get any kind of answers, this is not the place for you. It could be a scammer, it could be disorganization, or it could be laziness and apathy. None of these are qualities you want in someone who you'll be relying upon for repairs to the apartment and other issues.

6. Too many things are in need of repair

If you're walking around and everything looks good, but the door on the microwave is dinged up or loose, it's probably just an oversight or something the landlord intends to fix before you move in. Any good landlord will bring it up and assure you the repair will be made. If not, ask for it to be taken care of before signing the lease. However, if you see signs of neglect, and many items that look broken or in a state of disrepair, move on. If the landlord is showing you this, imagine what he or she is hiding from you? It also doesn't bode well for any repairs you may need once you're a tenant. (See also: 13 Things You Must Inspect Before Signing a Rental Agreement)

7. Some doors remain closed on the viewings

Yikes. If there are doors that are locked and the landlord won't show you that area, you have every right to be very suspicious. You're about to live here, and deserve to see every room. That means the closets, the attic or basement, the garage or storage unit, and even the crawl space if you desire. Some landlords will say that some rooms are off limits because they use it for storing maintenance supplies and other personal items. That needs to be considered in the lease, and should be accounted for in the price of the rent. But any landlord serious about his or her business will rent their own separate storage unit.

8. There are funky odors or stains

There's no excuse for this. An apartment should be made "view ready" by the landlord, and if it's not looking or smelling good, you're going to have issues. The biggest concerns are mold and mildew. If you're smelling that damp, musty odor it means the apartment could have some major issues with mold. This can cause structural damage and health issues. You should not be smelling any kind of cigarette smoke unless the listing says "smoking OK," which is rare these days. And look for stains on the walls or ceiling. If you see a fresh coat of paint on one small section of the apartment, ask about it. They may be trying to hide a problem.

9. The tour is rushed and given at an odd time

If you have a landlord or real estate agent rushing you through the tour, or only letting you see the apartment at certain times of the day, you are being deceived about something. Maybe the neighborhood is noisy and dangerous after dark. It could become an all-night party zone. Or, you could get stuck next to horrendous traffic and transportation noises during rush hour. And if you're close to an airport, make sure the apartment is insulated from that noise or you'll regret moving in for the entire term of the lease.

10. You're asked to sign an incomplete agreement

Don't just walk away, sprint! A lease is a contract between you and the landlord, and your signature means you agree to whatever is on it. If the landlord or agent says certain items will be filled in later, you cannot trust what's coming. Maybe they tell you you're getting a discounted rate, but then change their mind. They may say they'll take care of all the utilities, but afterward change that. They may even add in that the security deposit is nonrefundable. When you sign a lease, everything should be completed, and there should be two identical copies — one for you and one for the landlord, each signed and dated by both parties. And if they say you'll miss out if you don't sign right now, it's a pressure tactic that can only lead to trouble. (See also: 10 Questions Landlords Can't Ask)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

5 Money Moves to Make Even If You Don't Plan to Buy a House

Dan Rafter — Thu, 03 May 2018 08:30:11 +0000

You know that owning a home and making a mortgage payment each month is a big financial commitment. You know, too, that having a solid credit score is a must if you want to be approved for that mortgage loan.

But what if you never plan on owning a home? What if you plan on renting forever? You don't need to worry about maintaining strong credit and building a high credit score, right? Wrong. Even if you never plan on making the jump from renting to owning, there are still several money moves you need to make to ensure a happy financial future.

1. Pay your bills on time each month

Paying a credit card bill 30 days or more past due will send your credit score tumbling by 100 points or more. You might not think that matters if you never plan on taking out a mortgage and buying a home. But it does.

Other lenders rely on your credit score to determine how likely it is that you'll make your monthly payments. They also use that score to determine how high of an interest rate to charge you if they do approve you for a loan.

This means that lenders will look at your credit score when you apply for a loan to buy a car. They'll look at it if you need to take out a personal loan. And when you're applying for credit cards, you'll need strong credit to qualify for cards with the best rewards programs and interest rates. (See also: Pay These 6 Bills First When Money Is Tight)

2. Keep your credit card debt low

Consumers applying for mortgages know that having too much credit card debt can hurt their application. But even if you're not planning to own a home, it makes good financial sense not to carry a balance on your cards each month.

Credit card debt comes with high interest rates. If you don't pay off your balance at the end of each billing period, credit card debt can grow quickly. If you're not careful, those minimum monthly payments can become a huge financial burden.

High amounts of credit card debt can also lower your credit score. Only charge what you can afford to pay off in full when your credit card bill comes due. And if you do have outstanding credit card debt, use whatever extra money you have each month to pay it down. (See also: The Fastest Method to Eliminate Credit Card Debt)

3. Show landlords how financially responsible you are

You might think it doesn't matter that you missed two auto loan payments or that you skipped over a medical bill that's now in collections. But even if you don't need to prove to mortgage lenders that you're a good financial risk, you will need to prove it to apartment landlords. You have to live somewhere, right?

When you apply for an apartment, the odds are high that your landlord will run a credit check to determine if you're likely to pay your rent on time each month. You'll have to consent to have such a check performed. If you refuse, don't bet on getting that apartment.

The credit check will show negative financial moves such as late payments on recurring loans and credit cards, accounts that are in collections, car repossessions, and recent bankruptcies. It will also show how much you owe on your credit cards and other loans. You'll need to pay your bills on time, keep debts out of collections, and keep your debt levels low if you expect to qualify for the better apartments in your city. (See also: 10 Questions Landlords Can't Ask)

4. Build an emergency fund

Homeowners know how important an emergency fund is. They draw on these funds to cover such unexpected emergencies as a burst water heater, dying furnace, or leaky roof. By having money saved in such a fund, they can cover these home repairs without resorting to putting the costs on their credit cards.

But you should build your own emergency fund even if you never plan on owning. Even without a home, you will face big and unexpected bills. What if your car's transmission goes out? What if you lose your job? If you don't have an emergency fund of cash savings, how will you pay for these charges without running up credit card debt?

Experts recommend saving six to 12 months' worth of daily living expenses in an emergency fund. That might sound intimidating, but if you take it slowly by depositing whatever you can — even if it's only $100 a month — you can gradually build up a significant emergency fund. (See also: 5-Minute Finance: Start an Emergency Fund)

5. Save for retirement

Retirement is closer than you think. You need to steadily save for the days when you'll no longer be working. This is especially important if you never plan to own a home. Homeowners often receive a nice chunk of cash when they sell their homes and downsize to a smaller residence. If you plan on renting forever, you won't have that opportunity.

Instead, you need to start saving for retirement as soon as you begin working. If your company offers a 401(k) plan, sign up. Explore other retirement options such as IRAs, too. (See also: 5 Retirement Accounts You Don't Need a Ton of Money to Open)

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Ways to Find Income While Waiting for Full Retirement Age

Emily Guy Birken — Thu, 26 Apr 2018 08:30:16 +0000

Every single retirement expert seems to agree on one thing: You should wait until at least your full retirement age (FRA) before taking your Social Security retirement benefits. The reason for this consensus is the fact that taking retirement benefits before reaching that all-important FRA will result in permanently reduced benefits — which could be a serious problem as you get older.

But what do you do if you can't afford to wait until your FRA? Those same retirement experts may wag their fingers at you for taking early benefits, but are they offering solutions for how to bridge the financial gap until you have reached your FRA?

Thankfully, there are legitimate ways to bring in income while waiting to reach your full retirement age — and none of them require you to pull a Walter White. Here are four options for bringing in money while waiting for that magical moment known as FRA.

Tap your equity with a reverse mortgage

With a reverse mortgage, any homeowner over the age of 62 who owns their home free and clear (or has significant equity in the home) may access the equity in their home, either in a lump sum or in monthly installments, while still living on the property.

If all you know about reverse mortgages comes from the attractive seniors on daytime commercials, you might assume that this is a great option with no downsides. However, reverse mortgages do come at a cost, and it's important for homeowners to understand what they are agreeing to before they sign on the dotted line.

To start, reverse mortgages, just like their traditional counterparts, come with closing costs. In particular, you can expect to pay an origination fee of approximately 2 percent of the home's value, an upfront mortgage insurance premium, and traditional closing costs. In addition, during the life of the loan, you can expect to pay an annual mortgage insurance premium and a monthly servicing charge.

You should also remember that your reverse mortgage loan can come due for any of the following reasons:

If you sell the house.
If you pass away.
If you can no longer consider the home a primary residence. In particular, if you have to spend more than 12 months in a nursing home, your house will no longer be considered your primary residence.
If you don't pay your property taxes, don't have adequate homeowners' insurance, or if you don't maintain your home properly.

Reverse mortgages can be a good option for seniors who need to bridge the gap until reaching full retirement age, but they are certainly not a cure-all solution. If there's any possibility that you can't keep up with maintenance (including paying your taxes and insurance bill), that you might need some sort of long-term, off-site care, or that your kids are counting on inheriting the house from you when you pass away, this is not a good option for you. (See also: 5 Downsides of a Reverse Mortgage)

Rent out your property

You probably don't have a spare house available, but that doesn't mean you can't make some money by renting out your space or even the things you own. To start, if you live in an area that draws tourists, renting out a spare room (or even the entire house) on Airbnb can be an excellent way to bring in extra cash. If you rent out your entire home, you could house or pet sit while your guests are in your home — and potentially make money on both ends. (See also: 5 Easy Ways to Make Good Money From Airbnb)

Of course, not all rentals are about a place to hang your hat. Don't use your car every day? Rent it out with a service like Getaround or Turo. Have a two-car garage and only one vehicle? Rent out that extra parking space with a service like Parking Panda or Spot. Have power tools or sporting equipment gathering dust? Rent it all out with a service like Loanables or RentNotBuy.

Embrace the side hustle

No one wants to hear that they have to work longer in retirement, but side jobs ain't what they used to be. These days, you can find any number of rewarding gigs that can help make ends meet — and fit in with the lifestyle you want in retirement.

For instance, finding a way to make money off a hobby you're already doing can be a good way to bring in extra income without feeling like you're still stuck in the daily grind. Avid gardeners could become garden consultants for neighbors with black thumbs. Animal lovers could offer daily dog-walking services. Crafters could make their wares for sale, or offer classes on how to create their beautiful designs.

If you're not interested in monetizing a hobby, think about what sorts of things people turn to you for. If you have an impeccable eye for fashion, offer to help people look their best. If you know how to get the best deal on a used car, create a consulting service for buying cars. The sky is the limit in terms of creating a side hustle that will fit with your preferences, abilities, and schedule. (See also: 9 Easy Ways Retirees Can Earn Extra Income)

Sell your stuff

If you have the time to post your items on Craigslist or eBay, this can be a great way to both downsize your stuff to a more manageable (and retirement-ready) amount while making some money at the same time. As a bonus, a lot of the stuff that was new when you were in college is considered vintage these days — which means you might get some good money for the stuff you'd otherwise just give away. (See also: 5 Things You Can Resell on eBay That Make the Most Money)

Making it until FRA

Though it can seem like the wait to reach full retirement age is interminable when you could use the Social Security retirement benefits each month, you will be glad you waited. Finding a way to bring in other income while you wait for your FRA may not be the retirement you dreamed of, but you'll feel good that you ensured higher monthly benefits for life.

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This article is from Emily Guy Birken of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

9 Creative Ways to Boost Your Retirement Savings

Kat Tretina — Wed, 25 Apr 2018 08:00:09 +0000

Everyone knows how important it is to save for retirement. However, actually setting aside money for your future can be challenging. When you're short on cash and have other demands on your budget, there might be little to nothing left to put toward your nest egg. How are you supposed to save for your future when you're completely strapped in the present?

If you don't make enough money right now to set aside, there are still ways to grow your retirement savings. You just have to think outside the box.

1. Use your tax refund

Many people daydream about how they want to spend their tax refund, which is often the biggest windfall they'll see all year. In fact, last year the average tax refund was $2,763, according to the IRS.

If you're getting a tax refund this year, put it to work. Rather than spending your refund on electronics or a vacation, consider depositing that money straight into your retirement fund. With the power of compound interest, that refund could grow by the thousands by the time you retire.

2. Deposit your credit card rewards

If you have a credit card that offers cash back, that cash can be a regular source of extra money for your retirement fund. If you already use your credit card for routine purchases like utilities, gas, and groceries, this is easy money. Just make sure you are paying off your credit card balance in full every month.

3. Use cash back apps

If you don't have a cash back credit card, you can still earn money for doing the shopping you were going to do anyway. Apps like Ibotta or SavingStar let you earn cash back on grocery purchases, while sites like eBates offer a percentage back on many online purchases. You'll earn a percentage of your purchase as cash, and a check will be mailed to you — which you can toss straight into your retirement account. It's a low-effort way to earn extra money going about your normal routine. (See also: 7 Apps That Actually Pay You to Shop)

4. Launch a side hustle

If you have some extra time, you can earn money in the evenings or on weekends by launching a side hustle for fast cash. From walking dogs to making deliveries, there are hundreds of side gigs you can do in just a few hours a week. That extra income can go a long way to funding your retirement.

5. Sell your clutter

Take a look around at all of the electronics, textbooks, toys, and more that you never use. You may have as much as a few thousand dollars' worth of items collecting dust in your home. That clutter can be eliminated while netting you some money for your retirement. Sell items on sites like eBay, LetGo, and Bookscouter to get cash for your stuff. (See also: 5 Things in Your Garage That Have Serious Re-Sale Value)

6. Rent out extra space

If you have an extra bedroom, you can rent it out on sites like Airbnb or VRBO. Depending on your location and the size of your space, you could charge hundreds per night. However, you don't even need an extra room to make money. You can rent out a spare closet or storage space in the garage on Spacer, or rent out your parking spot on SpotHero. (See also: 5 Easy Ways to Make Good Money From Airbnb)

7. Sell photos online

If you like photography, you can earn passive income to put toward your retirement savings by selling your photos. You can try your hand at selling stock photography on sites like iStock or Shutterstock, or you could sell your artwork in an online portfolio or on arts and craft sites like Etsy. You could also try selling smartphone photos on Foap, which is an app that connects brands with photographers looking to sell their images. (See also: Earn Extra Income With Your Smartphone Camera)

8. Let strangers drive your car

If you don't drive your car every day, your vehicle can become a lucrative source of income. You can rent it out to tourists or business travelers on Turo and set your own daily rate. According to the company, you can make nearly $5,800 a year if your car's market value is $20,000 and you rent it out for 12 days per month. That alone could get you to the contribution limit on an IRA.

9. Trade in clothes for cash

If you have clothes, handbags, or shoes that you don't wear anymore, stop letting them take up precious closet space. You can sell those items on sites like Poshmark, Tradesy, and even in-person at consignment stores like Plato's Closet or Clothes Mentor. A single bag of clothes could net you enough to send a couple hundred dollars toward your retirement account.

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5 Surprises When Downsizing to a Condo

Dan Rafter — Mon, 09 Apr 2018 08:30:13 +0000

Yard work fills you with dread. The thought of shoveling your way through another winter is already causing your back to ache. And ever since your children moved on to college, half the rooms in your home sit unused.

You're ready to downsize from a single-family home to a condo. It's a move that makes sense: You don't need the space of a house, you're ready for a smaller monthly mortgage payment, and you're eager to chuck the chores and maintenance that come with a larger home.

But before you make the move into a condo, know that condo living does come with surprises. And many of them aren't pleasant. They don't have to scare you away, but you do need to be prepared for them.

Here are a few surprises that might await you when you become a condo owner.

1. Special assessments

When you become a condo owner, you'll have to pay either a condo fee or a homeowners' association fee to live in the building. That monthly fee goes toward the maintenance of the building's common areas and to pay for services such as landscaping and snow removal.

But what if your condo's roof needs to be replaced or the entire building needs tuckpointing? To pay for a large expense, your condo's board of directors might have to levy a special assessment; an extra monthly fee that unit owners pay until the building has raised enough money to pay for a large-scale project.

If your board decides your building needs a new garage, you might be paying an extra $200, $300, or more a month for as long as it takes to help pay for the construction. This extra money, if you're not prepared for it, could burst your household budget. (See also: What You Need to Know About HOAs)

2. You may end up on the board of directors

If you move into a large condo complex, you probably won't have to serve on the building's board of directors if you don't want to. But if you move into a smaller condo building with few residents, you may find yourself needing to take a turn serving as the board's director, treasurer, or secretary. An association can't function properly without a board, and if other residents are unwilling or unable to serve, ultimately, someone has to do it.

Serving on the board doesn't have to take up a lot of your time. But you will have to make decisions regarding the upkeep of your building. You might have to vote for an unpopular special assessment, or spearhead the ordering of new guard rails, hallway carpeting, or other items. If you have no desire to make any of these decisions, you should move into a larger condo building with more residents and more active boards of directors.

3. It may not be ideal for a pet

Some condo buildings don't allow pets, or only allow pets of a certain size. If your condo does allow dogs, and you happen to have one, you might find taking care of Fido requires a bit more work.

First, there are the stairs. If you live on the second floor or higher, you'll have to drag your pooch down the stairs — or into an elevator — every time your dog needs a bathroom break. Depending on the age of your dog, and yourself, this can quickly turn into a hassle.

Then there are the other dogs in your building. You might be unfortunate enough to live directly underneath the dog that barks all day long while its owners are at work. Or maybe you constantly bump into a dog that doesn't get along with your own. Those regular run-ins could be stressful.

Before moving into a condo, be aware that having a dog won't be quite as simple as having one in a single-family home.

4. The grocery haul

Bringing groceries into a single-family home is easy: You park in your garage or the driveway, and lug them in. Bringing large bags of groceries into a condo can be more work. It's no fun to lug them up three flights of stairs to get to your unit. Even if your building has an elevator, you'll still have to make multiple trips to bring in all your bags.

If you buy heavier items such as soda, beer, and water, that trip back and forth from your car to your condo can develop into a real pain. It's why so many condo owners take several smaller trips to the grocery store instead of one large one. Be careful here, though: Running to the grocery store every two or three days is an easy way to blow your monthly spending budget.

5. Plumbing problems can be a pain

Scheduling a visit from a plumber? Does that plumber need to shut off your water for an hour or more to repair a leaky bathtub faucet? This can be tricky if you live in a condo building with a shared plumbing system.

When you shut off the water in your unit, you might also be shutting down the water in your neighbors' units. Because of this, you'll have to schedule plumbing repairs with the building's board of directors. This could take a few days or a few weeks depending on your association and how many other units will be affected. You might not be able to schedule your plumbing repairs on the exact day of your choice.

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How to Negotiate Your Rent

Kat Tretina — Wed, 04 Apr 2018 08:00:07 +0000

When I moved from Pennsylvania to Florida, my husband and I looked everywhere for an affordable apartment. We finally found the perfect place that was within budget, and for that first year, it was wonderful.

Then we got our renewal notice and found out our rent would go up by over $250. That would have broken our budget. I thought about moving, but the high cost of relocating scared me away. Instead, I decided to negotiate with my landlord. It worked; we agreed on a $100 increase instead of $250. By just taking 10 minutes to discuss our lease, I saved us $1,800 over the course of the year.

When you're renewing, you have certain benefits over prospective tenants. Negotiating rent might sound impossible, but it can be done.

Look at comps

Research comparable rental units in the area that offer similar features and perks of your current apartment. This way, you'll get an idea of what the fair market value is where you live. You might find that your rent is the same, or even much higher, than it would be with a newer unit. That finding can give you significant bargaining power. (See also: 10 Best Tools for Finding an Apartment on the Cheap)

Review your rental track record

You might think your landlord would be unwilling to negotiate, but you'd be surprised. Good tenants are hard to find, and keeping a reliable tenant is much better than having an empty unit sit on the market. If you've been a good tenant — always paying rent on time and never causing trouble for the property manager — you will have more negotiating power.

See how many units are available

If you live in an apartment complex or if your landlord has several rental properties, see how many units are currently available. If your landlord has several openings, they're more likely to do what they can to get you to stay. Otherwise, they risk letting another unit sit unused, which means losing even more money.

Talk to your landlord

Once you've done your research, talk to your landlord. You can talk in person, but if you'd prefer, you can also send an email (that's what I did!). Below is a template you can use:

"Dear [landlord],

I received the lease renewal for my unit, and I'm concerned about the price increase.

The new rate would cost me an extra [$X] per year. I looked at other rentals in the area, and several complexes offer more features and larger units at [$X] price, which is much cheaper than the increased rate for my unit.

I believe I've been a good tenant; I've never missed a payment, and there's never been a single noise complaint or any other problem. If there's any way we could make it work, I'd like to stay here, but the price increase is more than I can reasonably afford.

Could you compromise on the rate? I could afford [$X]; that's the top of my budget, but it would be worth it to stay in my home."

Whether you rent a home from a private individual or lease an apartment from a big company, you can negotiate your rent. By doing your research, you may be able to get a lower rate.

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This article is from Kat Tretina of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

12 Easy Ways to Win Over Your Neighbors

Mikey Rox — Mon, 02 Apr 2018 08:30:15 +0000

Relationships with our neighbors aren't what they used to be. Growing up, everybody knew each other. Nowadays, we barely acknowledge the people who live next door to us, let alone folks up the block. I try to engage with my neighbors, perhaps to their chagrin, because I enjoy meeting new people — especially ones I'm going to see on a regular basis. If you like to be neighborly, too, put yourself out there, say hi, because until they move or you do, you're stuck with them. So you might as well be friendly, right?

1. Introduce yourself

When you move into a new neighborhood, knock on your neighbor's door to introduce yourself. Taking a minute or two to let your neighbors know who you are and where you're from gives them a good impression of you from the moment you arrive. Conversely, if you've been in your home for a while and you notice new neighbors moving in, feel free to pop by and introduce yourself — and maybe bring a sweet treat with you.

2. Be helpful

My neighbors and I help each other out in little ways, like dropping off incorrectly delivered mail, clearing paths on the sidewalk in front of each others' homes when the snow arrives, and taking trash cans to the curb and back. We remove random litter that may be in our yards, and we accept packages that require signatures when one of us isn't home. These small gestures have a significant impact on our relationship with one another while also building trust and appreciation.

If you haven't yet established these same helpful routines, it's never too late to start.

3. Invite them over for dinner

If you feel comfortable enough inviting new neighbors over for dinner or maybe just wine and conversation, go for it. If you're too shy for the one-on-one approach, wait until you're hosting a larger gathering of friends and neighbors, like a backyard BBQ, to include them. There's no wrong way to let your neighbors know they're welcome at your home, so pursue whatever avenue makes you most comfortable. (See also: Throw an Awesome Potluck Dinner With These 6 Easy Tricks)

4. Keep your trash contained

Don't let your trash pile up to the point that it stinks while drawing vermin. Handle your garbage on a regular basis by putting it out every pickup cycle. If you have lidded cans, you can maybe skip a cycle in the cooler months, but trash should be dealt with efficiently during warmer months. Nobody wants the smell of hot trash wafting through their open windows while they're trying to relax and enjoy the breeze.

5. Park with consideration

If you and your neighbors share street parking, be courteous enough to leave the spot in front of their home open for them, even when you have company. Ask your guests to park somewhere else that doesn't inconvenience your neighbors. Also, leave minimal space between vehicles to maximize the total space provided for parking. There's nothing more annoying than coming home at night and seeing three cars haphazardly parked when there should be enough space for four cars. You won't win me over with that.

6. Take care of your property

Keep your yard tidy, your landscape trimmed, and the exterior of your home clean and presentable. Nobody wants to look at your junk lying out where everybody can see it, and letting your property fall into disrepair also could affect your property's value and that of your neighbors. You can bet they won't take too kindly to that when general upkeep requires only occasional attention. If you lack storage space, invest in a shed.

7. Offer to help when needed

If you know your neighbors are going out of town, offer to keep an eye on their home and collect their mail if they're going away for more than a week. If they have a dog and you're inclined to watch it while they're away, offer that as well. This, in particular, might be the start of a mutually beneficial trade-off where you can rely on each other to help with each other's pets if you also have one. Potentially a major money-saving opportunity considering how much it costs to board animals these days.

It also won't hurt to do a general check-in from time to time.

"You don't have to go over for coffee on a daily basis, but checking in with them on a periodical basis will go a long way toward having a good relationship," says Justin Lavelle, chief communications officer at online background check platform BeenVerified.com. "It can be as simple as having a conversation over the fence. If you are in communication, they might be more likely to share if they are dealing with health, family, or other issues, giving you the opportunity to offer help if needed."

8. Don't be too loud

If you're enjoying your outdoor space with your friends and family, keep the noise at a reasonable level and take the party inside after 10 p.m. Nobody should be shouting and your music shouldn't be blasting, either. They might have to work early in the morning, or have a baby who needs to sleep. (See also: 10 Ways You're Being a Terrible Neighbor)

9. Inform them of upcoming construction projects

If you're about to start a construction project that will affect your neighbors — like debris out in the open, parking spaces being occupied, or early morning equipment noise — give them as much notice as possible. It's the right thing to do. You may not be able to avoid annoying them altogether, but they'll understand a lot more if you made an effort to communicate what's going to happen and the potential repercussions of the project.

10. Make nice regarding your short-term rentals

If you engage in short-term rentals via Airbnb or a similar service, it's extremely wise to have your neighbors on your side. Let them know what you're doing, ease their mind by telling them how involved you will be throughout the entire process, and ask them to call you if there are any problems, so you can deal with them promptly in order to keep the peace. Your guests are your responsibility, and if you're doing your job correctly, your neighbors won't even know they're there. (See also: 13 Things I Learned From Renting Out My Home on Airbnb)

11. Mind your pets

Don't leave your yappy dog outside unattended, especially in the morning or late at night. And don't let your cat roam the neighborhood so it can relieve itself all over your neighbor's garden. Clean up after them, and do what you can to make sure they're trained, friendly, and not a danger to other animals or kids. Your pets are your pets, and they shouldn't affect your neighbors whatsoever.

12. Notice your neighbors' home improvements

If your neighbors have recently put in time and money to improve their home, notice it. Tell them how great it looks. They'd like to know that their hard work has paid off and that the neighborhood appreciates it. You don't have to make a special stop to do it; just mention it in passing. You'll stand out favorably from the other neighbors who are too self-involved to care. (See also: 25 Reasons Why It's Good to Know Your Neighbors)

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This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

7 Worst Reasons NOT to Buy a House

Kentin Waits — Wed, 28 Feb 2018 10:00:06 +0000

For most of us, our home is the biggest ticket item we'll ever buy. The amount of time, labor, and money this single transaction represents demands a clear head and clear motivations. Since we already know there are a lot of terrible reasons to buy a house, let's take a look at things from the other side. Here are the worst reasons not to buy a house.

1. The market may go bust

After the Great Recession of 2008, everyone's worried about buying at the top of a bubble. But if you dream of owning a home, you've amassed a healthy down payment, can easily afford the mortgage payment and property taxes, and plan to stay in your new home for a while, stop obsessing about what the market may or may not do. Get on with the business of living in a new home.

2. You don't like the cosmetics

The triple threat of bad landscaping, garish paint, and shag carpet has made many a real estate agent go prematurely gray. But cosmetics are just that — cosmetic. They can often quite inexpensively be changed. Instead of writing off a house because it's got a case of the uglies, channel your creativity. Make small modifications as your time and budget allow. (See also: Don't Let These 6 Home Décor Flaws Ruin Your House Hunt)

3. Your furniture won't fit

I admit it; I used to watch lot of house hunting shows on cable TV. And the one conclusion I drew from this voyeuristic exercise? Too many homebuyers are terrified that the things they already own simply won't fit, no matter how generous the proportions of the rooms.

I'm not sure it makes sense to reject a home — or homeownership in general — simply because you've amassed a collection of barge-like beds, sofas, and dining room tables. Here's a good rule of thumb: Don't let things that depreciate in value dictate your purchase of something that appreciates in value.

4. You're afraid it will be a bad investment

First and foremost, houses are meant to be lived in (and hey, we all gotta live somewhere). Those who approach homeownership purely as an investment often fail to realize one important fact: Houses are often a worse investment than letting your money grow in the stock market. (See also: Stop Thinking of Your House as an Investment)

If you want to own your home rather than rent, buy a home. Live in it. Sell or rent it when you're ready to move on. You may come out ahead financially, or you may not. But in the meantime, you'll have lived in the home you wanted and that has value in and of itself.

5. Renters are happier than owners

Renters may be more carefree than homeowners, but that doesn't always translate into happiness. Renting puts you at the mercy of shifting economies, forces you to deal with a rotating parade of new neighbors (with whom you may share a wall or two), and provides little opportunity to customize or improve your space. Depending on your priorities, renting may be more of a drag than a delight.

6. You're scared of commitment

So, you say you're scared of commitment. Who isn't? But by avoiding homeownership, you're actually committing to something — spending more money on rent, not building equity, sacrificing a certain level of privacy, and potentially retiring with less security. There's proactive commitment and passive commitment. Which do you prefer?

7. You're worried about hidden issues

Remediating hidden issues can be expensive, but don't let unfounded fears get the best of you. Few homes are able to keep their secrets completely. Do your homework and don't skimp on the home inspection. Hire an experienced and certified professional, attend the inspection in person, and read the final report carefully. If a home has fatal flaws, move on. (See also: Thinking of Skipping the Home Inspection? Here's What It Will Cost You)

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What Happens to Your Apartment When Your Landlord Gets the Boot

Kat Tretina — Mon, 26 Feb 2018 09:30:06 +0000

Finding the perfect rental for you and your family is hard enough. After searching through hundreds of listings, touring apartments, and finally moving in, the last thing you want to worry about is any hiccups with the property. Instead, you want to focus on turning your new rental into a home.

Unfortunately, most tenants don't know if their landlord is keeping up with the building's mortgage payments until it's too late. Instead, you might only find out once the property has entered into foreclosure. When that happens, it typically means your lease is no longer valid.

Before you start panicking, it's important to know that tenants have rights, even in the case of a foreclosure. Here's what you should do if you find out your landlord's property has entered into foreclosure.

1. Understand tenant protections

Most states have their own tenant protection laws in place. For example, in Florida, you can remain in your rented home while it goes through the foreclosure process, which can last several months. When the proceedings end, you will likely have to find another place to live. If the foreclosed home is sold, the new purchaser may offer you the following options:

Enter into a new rental agreement. If the new owner intends to use the home as an investment property, they may offer to allow you to stay if you sign a new lease with them.
Move out in 30 to 90 days. The new owner might not want to deal with tenants. If that's the case, they must provide you with a written notice asking you to leave by a certain date. Depending on where you live, that notice period can range from 30 to 90 days.

The U.S. Department of Housing and Urban Development has a searchable database of tenant rights in each state in each state. You can use that database to find specific information about tenant protections in your area.

2. Document all correspondence

If your landlord sends you any notices or offers, such as offering you cash to move out early to speed up the foreclosure process, document the time, date, and key points of every conversation. When possible, have all conversations and negotiations via email so there's a written record.

3. Consider legal options

When you enter into a lease, your landlord is expected to adhere to those terms. If the landlord is delinquent on their payments and defaults on their mortgage, they violate those terms. You might be able to take your landlord to small claims court to recoup losses, including:

Moving expenses.
Time off from work to handle moving.
Apartment application fees.
Security deposits.

Keep in mind that if your landlord has defaulted on their mortgage, they may not be flush with cash. However, if the court rules in your favor, you could have years to collect those damages. It's a good idea to consult with a lawyer about your options and how to pursue any suit against your landlord.

3. Keep paying your rent on time

A common misconception is that you don't have to pay your rent while the home enters into foreclosure. Some people stop making payments completely or try to make them directly to the landlord's mortgage company. Doing so can hurt you. Your landlord is still entitled to rent payments while you continue to live in the home. If you fall behind on your payments, you can still be evicted from the home and your credit report could be damaged by late payments.

4. Start searching for a new home

Some states give you 30 to 90 days to stay in the home, even after a foreclosure sale has occurred. However, once you find out that the building has entered into foreclosure, it's a good idea to start looking for a new place to live right away. In certain high-demand areas, it can take weeks — sometimes even months — to find a new home, so the earlier you start, the better.

5. Follow eviction instructions

The new building owner will send you a notification with a set date you must leave the home by, along with detailed instructions. Almost always, you will be expected to leave the home in clean, well-maintained condition. You may be subject to penalties if you leave signs of visible damage. Make sure you follow those instructions carefully to avoid any surprise charges or problems.

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8 Things You Should Never Hide From Your Landlord

Paul Michael — Thu, 15 Feb 2018 09:00:08 +0000

So, you're renting a place to live. And that means you have a landlord. Whoever is responsible for the house or apartment will be holding you to a set of standards. You'll have signed a contract. Whether you're renting the place alone, with friends, or even strangers, you better be upfront about the following, or you could find yourself out on the street.

1. Your pets

When you look for a new place to rent, you'll see that almost all of them have a pet policy. It will either be no pets allowed, pets OK with a deposit, or a stipulation on which kind of pets you can have (maybe dogs aren't allowed, but cats are).

If you have a pet and are planning to rent a place, you must disclose it to the landlord. It's tempting to think, "Whiskers is so old and small, no one will care," but that's not the point.

The policy is there for a reason. The landlord may not want the additional cleanup involved in getting a house or apartment ready for the next tenant. Some pets can cause damage far more expensive to repair than the security deposit will cover. Whatever the reason, they set the rules, and you must agree to abide by them.

If you are found with a pet, even if it's a pet you bought after you signed the lease, the landlord is well within his or her rights to ask you to get rid of it. They could also evict you for breaching the contract. It's not worth it. Find a place that's pet-friendly, or see if you can give your pet to a caring friend. (See also: 7 Smart Ways to Get Your Apartment Deposit Back)

2. Any new roommates

Many of us have shared a home or apartment with roommates so we can afford the rent. It happens a lot with college students, or when you're living in places like Manhattan or Beverly Hills. If three of you decide to rent a four-bedroom place, and all sign the contract, no problem. But if you decide to move another friend in after the fact, that's trouble.

Whether you're taking money from that person to help with the rent, or just letting them stay for free, you are breaking the rules of the lease. Think of it from the landlord's point of view. He or she vetted you, and anyone else who put their name on the contract. If you bring someone else in, they get by that process unchecked. They're an unknown, and landlords really don't like unknowns; especially if it's their own home they're renting out.

Not only that, but it's possible the apartment or home is only fit for habitation by a maximum number of individuals. Add more, and you could be putting people in harm's way. Whatever the case, you're once again risking the chance of being kicked out on the street.

3. DIY or home improvements you have made

It may be home sweet home, but it isn't yours. You're just "borrowing" it for a set amount of time. The house, and any contents that came with it in the lease, are not yours. Therefore, you don't have the right to start messing around with them.

You may think you're doing the landlord a favor; perhaps you want to rip out the carpet and install a wooden floor, or scrape off the older wallpaper and add something fresh and vibrant. Well, that may not be something the landlord wants.

Now, by all means, ask the landlord if you can do these improvements, and get it in writing if he or she agrees. Chances are, if you're planning to make upgrades that make the place more attractive, you'll get the go-ahead. But never assume, and never keep any work you've done a secret. On the day you move out, you could find your security deposit is not returned because you didn't leave the home in the same state you found it. (See also: 14 Simple Ways to Make an Apartment a Home)

4. Problems with utilities

Utilities may be included with the rent, or they may all be your responsibility, but either way, you should tell the landlord as soon as you notice any problems. Water leaks can start out as minor repairs, but left unchecked, they can lead to thousands of dollars in damages. They can also affect other tenants, and it will all be on the landlord's shoulders.

Electric problems are just as bad. If something is shorting out, it could lead to a fire, and that could be disastrous.

Even if it doesn't seem like anything — maybe just a slight drop in water pressure, a sketchy light switch, or an unexplained increase in the utility bill — talk to your landlord immediately. In this case, a stitch in time really does apply. Oh, and if the landlord has evidence that you concealed the problems, you could be liable for the full cost of the repairs.

5. Broken or malfunctioning appliances

Just like the utilities issue, broken appliances and other fixtures should also be reported to the landlord as soon as you notice them. Again, if the malfunction is caught early, it could mean a simple fix instead of a major repair — or worse, having to replace the entire unit.

Broken or malfunctioning appliances can also cause damage to the apartment. For example, a washing machine that's leaking water into the wooden floors can create issues that may not be caught until months later, and by then, it's a big problem. A stove that leaks gas is obviously a serious health hazard and should be turned off and reported. A furnace that is setting off your carbon monoxide alarm is incredibly dangerous, and makes the home uninhabitable.

If that does happen, call the landlord immediately and get out of the home. Or at the very least, open all the windows if you cannot leave, and stay close to the fresh air. The landlord will be responsible for getting the furnace fixed, or more likely, replaced.

6. You're running a home-based business

Most of the time, the landlord isn't really going to care if it's a small business that doesn't impact the regulations of the area. For example, if you're making extra money selling knitted goods on Etsy, tutoring students, or writing web code on a laptop in your bedroom, it's probably not going to be a big deal. However, other kinds of business can cause problems for the landlord.

If you decide to turn your apartment into a massage therapy facility, or start fixing cars in the attached garage, you could be violating zoning restrictions. And if it is noisy, smelly, and a nuisance to neighbors, you're just asking to be evicted. Check with the landlord before you sign the lease; there will usually be a section in there talking about home-based businesses.

7. You can't find your key

Hey, it happens. Maybe it fell off the key ring, or you misplaced it and have no idea where it is. Even if you have a spare, you need to tell the landlord as soon as you notice your key has gone missing.

Although it's unlikely that it will be used to gain access to the property, you cannot say for sure that it didn't end up in the wrong hands. For your own peace of mind, you should tell the landlord what has happened, as any kind of security risk poses a problem.

If the landlord decides that the locks need to be changed, you will almost certainly be responsible for the costs incurred. You may also have no choice about which firm replaces the locks. If you're handy you could offer to do it yourself and save some money, but it's doubtful you'll be allowed to do that.

8. You're subletting the property

It's very tempting to sublet your apartment or home if you know you're going to be gone for a significant amount of time. Some people also sublet when they know a big event is coming to town, and services like Airbnb make it very easy to do that and make a significant profit for a few days. All of this is a big no-no if you haven't checked with the landlord first.

Some states and municipalities have specific laws regarding subletting. Your lease may explicitly prevent you from subletting. Even if the landlord agrees, he or she may want to have a say in who you choose to sublet the property to, and may insist on a background check that you must pay for.

And remember, if you do sublet and the subtenant doesn't pay you, it's your responsibility to pay the rent. So choose carefully, or you could end up in a world of financial pain. (See also: The Easy Way to Sublet Your Apartment)

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This article is from Paul Michael of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

4 Worst Reasons to Buy a House

Dan Rafter — Wed, 31 Jan 2018 09:30:09 +0000

Each month you send a rent check to your landlord. Meanwhile, every homeowner you know insists that you're wasting that money. They say that you should buy a home and that owning is a smarter financial move.

But are they right? Not necessarily.

There are good reasons to buy a home: You get a place to call your own and raise your family. You get more space. You'll gain more — but not complete — control over your monthly housing payments.

This doesn't mean, though, that owning is always the better financial choice. In fact, there are many myths about homeownership that could persuade you to buy for the wrong reasons. Here are four of them.

1. Owning a home is a great investment

It might seem that purchasing a home, holding onto it for years, and then selling it for a profit is a great reason to buy. But the truth is, homes aren't good investments for most owners.

Robert Shiller, a Yale economist, has long studied the housing industry, and ranks as a true expert when it comes to real estate and economics. Speaking to The Motley Fool in 2014, Shiller unveiled the numbers proving that housing historically has not been a good investment.

Shiller found that from 1890 through 2012, home prices when adjusted for inflation did not grow one cent. Homeowners would have made significantly more money by investing in the stock market during this same time. Shiller reported that the value of the S&P 500 increased more than 2,000 times from 1890 through 2012. Shiller also found that from 1890 through 1980, the real value of home prices actually fell by about 10 percent.

Don't buy a home thinking that it's a smart financial investment. It's not. A home is a place to raise your family and retreat to at the end of a long day. It's not supposed to be a moneymaker. (See also: Stop Thinking of Your House as an Investment)

2. You're tired of throwing away your money on rent

Advocates of homeownership often tell you that you're throwing away your money every time you pay a rent check. What they don't say is that this doesn't change much after you buy a house — at least not initially.

Most of us take out a mortgage loan to finance the purchase of a house. The bank behind your mortgage will technically own most of your house after you close on it. And in the earlier years of owning a home, the vast majority of the money you send toward the bank goes toward paying off interest. Only a small amount of each monthly payment goes toward paying down the principal of your balance.

So, you're still throwing your money at someone with nothing concrete to show for it. You're just throwing it at your bank instead of your landlord. And if you don't hold onto your house long enough — say, more than seven years — you'll have paid far more in interest than in reducing your principal balance by the time you sell. (See also: Why I Choose to Rent Instead of Buy)

3. You can build equity

Earning equity is one of the most popular reasons for people to buy a home. Say you owe $150,000 on your mortgage and your home is worth $220,000. You now have $70,000 worth of equity. You can borrow against that in the form of a home-equity loan or home equity line of credit to pay for everything from a child's college education, to major home improvements, to reducing credit card debt. (See also: 4 Smartest Ways to Use a Home Equity Loan)

You earn equity in two ways: First, every time you make a payment, you are reducing your mortgage amount. Second, if your home increases in value, your equity will grow automatically.

The problem is that home values can fall, and building equity when that happens is a true challenge. Say after three years of owning your home, you've reduced your mortgage amount to $200,000. If home values have fallen since you purchased your residence and your home is now worth just $190,000, you don't have any equity. Instead, you are underwater — meaning that you owe more on your mortgage than what your home is worth. (See also: 6 Times It's Actually OK to Be Underwater on Your Home)

You can't control whether the value of your home falls or rises. Millions of homeowners discovered this in 2007 and 2008, when home values across the country plummeted. Many of the owners who bought in 2005 and 2006 still owe more on their mortgages than what their homes are worth. Building equity isn't a guarantee.

4. Owning a house comes with big rewards at tax time

Advocates of buying a home point to the deductions that owners can take come tax time: Owners can deduct the interest they pay on their mortgages, as well as their property taxes.

But these deductions are becoming less valuable to some people. First, the new tax reform law says that owners will only be able to deduct the interest on their mortgage loans up to $750,000, rather than the $1 million that it was previously. Federal tax reform will also limit the amount that taxpayers can deduct in state and local property and income taxes on their federal returns to a maximum of $10,000.

The biggest change, though, might be the new standard deduction. Taxpayers filing their federal returns can either itemize their deductions or take the standard deduction. Tax reform will boost the standard deduction from $6,350 to $12,000 for individuals. It will increase the standard deduction for couples filing jointly from $12,700 to $24,000.

There is no financial reason for taxpayers to itemize their deductions if they aren't greater than the standard deduction. As the standard deduction increases, a greater number of taxpayers will take it instead of itemizing. This means we'll see fewer homeowners taking advantage of the property tax and mortgage interest deductions.

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This article is from Dan Rafter of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread:

17 Ways Your House Can Earn a Paycheck

Carrie Kirby — Fri, 08 Dec 2017 09:00:07 +0000

As interest rates creep up, the days of wringing cheap cash from your home in the form of refinances and home equity loans are waning. But have you ever thought of making money using your house without tapping the equity?

Some concepts, such as taking in roommates, have probably been with us for as long as we have lived indoors. But the rise of peer-to-peer commerce and smartphone apps have opened up new opportunities for homeowners or even renters to put their homes to work.

Here are a few jobs your house could get.

1. Billboard

If you're in a suburban homeowners association, forget it. But if you have a property on a well-trafficked street or in view of the freeway, consider selling advertising space on your fence, walls, or even in the yard. You might need to consult local laws to make sure you don't find yourself in violation of the planning department on this one — which is probably why you tend to see this on highways in rural areas more than in urban or suburban neighborhoods.

2. Filming location

You might not have what it takes to get a close-up on the silver screen, but maybe your home does. The going pay rate for television, film, and even commercial sets is your mortgage payment amount per day. Sign up on LocationsHub ($5 a month) or Set Scouter (free, but they take a cut of the rental fee) so producers can find you. And don't think you need a mansion to qualify; productions need ordinary homes, too. (See also: How to Turn Your Home Into a Moneymaking Star)

3. Extra storage

You've seen facilities that rent out industrial-looking storage sheds where you can keep your offseason clothes, Christmas trees, and that chair that never found a spot in your new apartment but you love too much to sell. But did you know that you can rent out a closet in your own place for this kind of use?

No matter where you live, you can list your extra space for free on sites like Craigslist, including not just closets, but also garage space, sheds, and even backyard or driveway space. If the storage space has a private entrance, you can provide the renter with their own key; if it's in your living space, you can set access hours and have the renter call you to get let in.

This type of service is so in-demand in space-sensitive locations like the San Francisco Bay Area, that there is an entire Parking/Storage category on Craigslist.

4. CSA drop-off point

My front porch is the pickup point for neighbors who subscribe to a community supported agriculture farm share program. I don't get paid cash for the space, but I get a healthy discount on my box — and if more people start picking up here, I could get my box for free.

5. Yard sale spot

I never would have dreamed that anyone would pay for a yard in which to host a yard sale, but then I learned about 127 Yard Sale, an annual 600-mile-long yard sale, for which home and business owners do in fact rent out property along the sale route to vendors. This made me realize that you could also capitalize on other special events this way. Do crowds pass by your yard on the way to the Fourth of July fireworks or the weekly farmers market? You may be able to rent your yard for a sale operator or to a refreshments vendor. (See also: How to Turn Your Backyard Into a Moneymaker)

6. Co-working space

It never made sense to me that some home-based workers pay to rent out cubicles when most homes sit empty and silent during the workday. As a work-from-home mom, I've often wanted to get out of my noisy house to work, but I didn't want to travel to an urban area and pay top dollar for a co-working space with a fancy coffee bar. If there were a service near me where I could book space at someone else's empty house, I might have considered it.

Here in the U.S., it seems that so far, startups trying to connect itinerant workers with empty homes have gone bust. Not to worry, you can always list your extra work-from-home space on Craigslist.

7. Child care location

You can of course open a home-based child care facility, but what if you're not interested in a career in child care? I found out that you can squeeze a little benefit out of your home by offering to host a nanny share for multiple families. Some share arrangements will allow the hosting family to contribute less to the nanny's salary. In my case, I received a different, but equally valuable benefit: Because both toddlers in the share took long afternoon naps, the nanny included several hours of housecleaning service in her workday, at no extra charge to me.

Another way I have seen homeowners successfully use their homes for child care, outside the traditional home day care center idea, is by hosting after-school or summer programs. This is a home business that requires your labor in addition to your space, but you can host a summer camp at home based on arts or any other interest you have. Check into local licensing laws and insurance requirements before you get started.

8. Cold storage

There is a market of people who want to buy meat in bulk, but don't have the cold storage space at home. So it's plausible that you could rent out freezer space to folks who want to store a lot of food but don't have their own deep freeze.

9. Foreign exchange student housing

The U.S. State Department doesn't pay exchange student host families, although you can take a $50 per month tax deduction while you're hosting one. However, there are lots of private programs out there that bring foreign students to the U.S. and pay host families for their room and board. You can sign up with 4stay or The American Homestay Network to rent a room to students and interns.

Another way to go about this is to contact a local university. Some of them keep a list of available rooms, or they allow people to post on a bulletin board to advertise their space for international students or visiting professors.

10. Lodging for nurses or other medical professionals

Some travel nurses move from city to city taking on new assignments arranged by agencies. These agencies may provide housing, so one way to become a host for a travel nurse would be to get in touch with one of these agencies. You can connect with these nurses through the The Gypsy Nurse's Travel Nurse Housing Group, or list your room on Furnished Finder, a housing site just for traveling professionals.

11. Get a roommate

If you have a second home or travel for long stretches, getting a roommate can be preferable to renting out your entire home, because it allows you to maintain access during the times when you are in town. Social media is a good way to find trustworthy roommates, since ideally they'll be recommended by someone you know. There are also websites and apps dedicated to helping people find renters. (See also: The 11 Best Websites for Renting Your Extra Space)

12. Parking

I live on an island, and the ferry terminal parking lot always fills up before the last ferry of the morning leaves. Some folks who live nearby are capitalizing on that by renting out their empty driveways to ferry riders. You can list a parking spot in any of 15 U.S. cities on SpotHero, either on a regular basis or for special events. I've also seen signs offering parking rental posted on lampposts in cities, and seen college kids simply holding up cardboard with the price scrawled on it to rent out their front yards on college game days.

13. Vacation rental

The vacation home rental industry has exploded in recent years thanks to Airbnb, and now anyone who lives in a popular destination can turn a spare bedroom into a consistent source of cash. If you have dismissed becoming an Airbnb host because you don't have an empty bedroom, give it another look.

Not everyone realizes that you can list your whole home on Airbnb while you're on vacation; I have done this several times with good results, and have even had guests who were happy to care for my cats in exchange for a discount. (See also: 13 Things I Learned From Renting Out My Home on Airbnb)

You might also be overlooking spaces in your home that are "Airbnbable," especially if you live in a high-demand area. I have stayed in lovely RVs parked in people's yards. I've seen a breakfast nook rented as a bedroom in Monterey, and a living room sofa listed for $15 a night in Columbus, Ohio. Some people also rent out camping space in their yard; if you do this, think through where your guests will use the bathroom. And if you don't love Airbnb, there are a few competitors, like VRBO or HomeAway, that could help you rent out your space as well.

14. Event space

Even my nonexpansive home has garnered requests for use for a workshop through Airbnb (I turned them down because I don't have one large room where people could gather comfortably). If your home is more of a showcase than mine, you could register it with a company such as Peerspace, which lists spaces for all kinds of events.

One advantage to listing with a company that specializes in events, rather than Airbnb, is that they tend to offer insurance coverage appropriate for events, and have safeguards in place to make sure your property isn't destroyed.

15. Home swap

This isn't necessarily a way to generate cash from your home, but it is a way to get more value from it. Sign up for HomeExchange or another home swap site, and you can get a free place to stay while you're traveling in exchange for hosting travelers at your own place. Recently, HomeExchange debuted a points program that makes it easier to arrange non-simultaneous exchanges, which is great for folks who might want to rent out their home but don't want to deal with rent, which you may have to report on your taxes.

In the past year, my family has enjoyed free stays in Santa Cruz, California; Lake Tahoe, Nevada; and Ashland, Oregon, thanks to home swapping; we're currently working on an exchange for France this summer. We enjoy that we are welcoming members of a more limited community into our home, as opposed to renting on Airbnb, and that when we swap with other cat owners, they are usually more than happy to care for our cats. (See also: Home Exchanges: Free Accommodations With Perks)

16. Package locker

Since ordering online has become the de facto way for many people to shop, secure package delivery has become a problem. Even in my safe community, neighbors are constantly complaining of packages from UPS or FedEx disappearing from their porches.

Providing a package locker is partly a work-from-home job, and partly getting paid for your space: eNeighbor pays you $3.50 for every package you receive. The work part is that you have to be home from 9 a.m. to 7 p.m. to sign for packages, then hand them out to their recipients when they come pick them up. The space part, of course, is that your living room or other space becomes a little mailroom for these boxes.

17. Rehearsal space

You could rent out your garage, basement, or other large space to up-and-coming musicians who need a place to jam. Keep in mind, however, that nearby neighbors might take issue with this plan, so be mindful of local noise ordinances.

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This article is from Carrie Kirby of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: