Rent Or Buy Real Estate?

Recently….well over the last year anyway, I have had friends ask me for advice on whether now is a good time to rent or buy real estate. As most of my friends, colleagues, and locals know, I consider myself a real estate geek and have learned enough hard lessons, however had many great experiences professionally and personally to last a lifetime…and I am only 30 years old but this is an age to where we can take those lessons and build on our future, using real estate as a catapult to financial freedom one day….Discontinue reading if you think real estate is a “get rich quick” scheme. I thought it was when I was younger. Believe me, it’s not.

I can write a novel on the difference between renting and buying real estate but I will try to make this short yet helpful. All things equal, owning a house far exceeds the benefit of renting a home. The obvious factors are that by owning, you can build equity and write-off your interest payments on your mortgage. This doesn’t mean that everyone in America should be a homeowner. Real estate is local. For instance, property values are still declining in California. In Florida, prices are starting to level off. In New Jersey I can point out 30 different markets where the market conditions are different. If you live in Montclair, the market is different in Clifton, less than 2 miles away.

If real estate values are deteriorating in your neighborhood of choice and your interest rate is not favorable, it could be a good reason to stick with renting for now. Deals don’t go away overnight.

If you have cash saved, some tenants prefer renting so that they can play the stock market which historically return 8-10% per year with a good broker. Real estate values typically follow the rate of inflation over the long term. That being said, home ownership has the best tax incentive. Married couples can earn up to $500,000 in gains on their homes TAX FREE, where singles can earn up to $250,000 in gains TAX FREE. If you played the stock market, those gains would be hit by nearly 50% by Uncle Sam.

First and foremost, you need to find a neighborhood that you absolutely love. If you have kids, it is important to look in their best interest FIRST before yours. Second, look at property values. If prices are declining and homes are sitting on the market for over 180 days, it may be better off to hold off and rent, analyze for the next year, and buy something possibly in foreclosure when you are ready. How do you find out about Days On Market (DOM)? Call a local agent and ask for homes for sale in your preferred neighborhood. DOM is normally listed.

If you do buy, it is best to put down 20%. Avoiding Private Mortgage Insurance is huge today. PMI companies are going broke or already did, and the ones left standing are charging an arm and 2 legs for coverage. Not to mention your closing costs are about 3% higher. Although an FHA loan sounds great with 97% Loan To Value loans, it is quite expensive when you roll things out. Be sure that you understand the pros and cons of FHA versus Conventional financing. I will offer friendly advice to those who ask.

Some pros and cons about renting and buying…Well if you rent, you have the flexibility to move. Leases run month to month, 6 months, and 1 year. Home ownership limits you to the market whether it is a buyer or sellers market. The resale of your home is based off of competitive sales and overall demand, not a lease. Renting allows you to blame everything on the landlord. If you don’t like dealing with broken water heaters, leaky roof, and running toilets, then maybe you are a lifelong renter. OWNING a home allows you a huge tax advantage, potential tax-free capital gains, and emotional satisfaction. With that however, comes property taxes and upkeep.

If you purchase or contract a home by the end of 2009, you are eligible for the $8,000 tax credit from the IRS and can spread this out over 2 years, something Congress passed to stimulate home ownership. All things aside, this is truly a very good time to start shopping for a home. Historically low prices, low interest rates, and real estate provides an amazing tax shelter. Read my article about the tax credit HERE

So a couple paragraphs to conclude, real estate is a very tough and mean industry. If you are not careful, it will eat you up 10 times over. Most people get only one chance and you are done for a long time. Most decisions in life are based off emotion, and in real estate, if you let emotion control your decisions, you are in for a potentially catastrophic ride. Most importantly, let a professional help you with a plan. You can either agree or disagree with their input. But a guy like me can share a wealth of information for those who don’t even know what a home inspection is. Don’t try to tackle buying a home by yourself.

On a side note, most of you that know me know that I have more stories about real estate and business that will even draw a surprised look from Ben Stein. I have learned from the best in the industry though and at 30, I feel I have a great amount of experience in real estate acquisition, construction, and finance. I have shared my stories with investment groups across the country and now speak at forums about risk mitigation. One thing that is so important to understand and I’ll say it again, is that real estate is the biggest catapult to financial wealth, freedom, and stability. Most of our parents made a lot of our upbringing possible by home ownership and equity.

If you are not ready now, don’t panic or feel that you are missing the boat. The nice thing about real estate is that it is tangible. It will always be there no matter what, different than stocks. Think things through, talk to people, and make a smart decision. Once you make a smart decision, your emotions will take over.

Aside from my beautiful family, real estate is the most important thing in my life. I strive to make more good decisions than bad, and if you understand the way I just said that, the industry will force you to make both types of decisions. The key is to not jump the gun. Understand EVERYTHING. Then…one day…everyone will have an opportunity to lead a more secure life no matter whether it is just buying 1 house or 20 houses.

Top Home Based Businesses Can Lead to a Profitable Future

Top home based businesses can help a person kiss the 9-to-5 commuter gridlock routine goodbye, and say hello to a better return on investment. More time with family, lower stress, better overall health and a better quality of life. Top businesses provide training, ongoing support, and multiple streams of income. Many have over-hyped claims of earning potential.For the more industrious, working for yourself can take two primary roads. You can work to assist with someone else’s requirements as an independent contractor or consultant. Another road is to launch your own small business. While the employment market is not as flooded with opportunities, home based businesses are flourishing. The avenues to find these opportunities have expanded along with the home based workforce. Top home based businesses are in direct competition and as successful as the more traditional businesses. It’s common knowledge that both “eBay” and Microsoft started out at home. Since the internet boom, dot.com and web brethren have seeded businesses that blossomed into business giants.Types of home based businesses that are performed for a third party have benefits and disadvantages. Just as an employee would compete for a traditional job, working from home for others involves winning the job. This entails market research for job opportunities, applying, winning and successfully performing. Applying for contracting jobs includes proposing at the right mix of labour types, responsibilities, costs and time line.Performing the role as a consultant or contractor has benefits and drawbacks. Contractors are often responsible for deducting and paying IRS taxes due. Contractors and consultants are typically responsible for tasks and deductions normally handled by a Human Resource department. Health care and life insurance are critical benefits that garner much interest from the independent workforce. For independent workers, self employment organizations, such as the National Association for the Self Employed, can assist with payroll, business, legal, marketing, and accounting requirements.YourNetBiz – provides products, training and support and only sold through sponsors who partner with you in the business to help you succeed. It allows greater potential for success if you choose the right mentor or sponsor.Industry market research data can be instrumental in establishing which industries are stable, declining or growing. Occupational research provides critical rate and salary data, identifies standard training, education, and staff composition. Data can be incorporated into competitive proposal strategies to become a contractor, consultant or to win business, contracts or grants for your own company.Not surprisingly, top home based businesses include administrative support. Independent work portals typically have virtual assistant, administrative, typing, transcription, reception, data entry, and similar employment assignments. Each of the following sites offer administrative employment and employees:Guru.com, freelancer.com, ifreelance.com, odesk.comFor the artistically inclined, deviantart.com, etsy.com and eBay offer marketplaces to sell and buy products. Crafts such as clothing for people and pets, candles, bath and body products are bought and sold from home. These products are among the best home based businesses. Specialty or gourmet edibles like cake, candies, and cookies are a self renewing customer need. Specialty coffees, teas or drinks are sold online from homes around the world.Technical work such as programmers, coders, developers and support positions such as web content developers and designers, are among top home based businesses. Practically any employment website has countless technical opportunities. A web master can be self created. Much like an artist, technical workers can create a portfolio of work to demonstrate knowledge, skill, and abilities to develop a small business, or provide contract services. Anyone who is technically inclined can rack up credentials and certifications as quickly as they’d like to progress into earning a living.The contracting arena is a wide net. It casts out primary and secondary players like those who need a product or service, and those who can provide it. In between are other entrepreneurs. Proposal or grant writers, for example, are another cottage business. Much like an artist and a technical person, to step into this world, you can take an alternate route by demonstrating via portfolio what you can do. To get an edge on competition though, a business should strive to win at least one grant, contract or award for their portfolio, and grow it from there. The internet has enabled many businesses to conduct business via phone, fax, internet, and online meetings. Proposal manager or proposal coordinator staff are responsible for shepherding grants or proposals through the system. Any of these positions can be done from a home base.Despite challenging economic times, the good news is that the best home based businesses are everywhere, where the heart is, and most importantly, at home.

Thoughts on a Home Based Business

The Internet has fundamentally changed the collective psyche of modern man like few other agreeable phenomenons in history. Bill Gates has gone on before about “business at the speed of thought”, and for once I agree. We just can’t get things done fast enough because we can’t do them quite as fast as we think! It’s pretty unnatural, but that is not the point of this article.With the internet and the realisation of the virtual office space, home based business has become a reality. It’s my idea of how to begin working smart and it’s always amazing to see just how many people are still working dumb, in my opinion anyway. Surely if there was the possibility of creating a balance between being in the office and working at home, why do so many people who work behind a desk and computer screen still endure the daily traffic nightmare to do just that? I guess that’s the answer – their jobs are so bureaucratized that not sitting behind a desk all day is not classified as work!The opposite holds true for a home based business. Risks and rewards are off the scale in comparison to the corporate office environ. The opportunities available to an individual who has a good business idea and an internet connection are truly amazing.Start-up costs in comparison to a brick and mortar operation are almost nonexistent and support resources online can be abundant to the point of being confusing. What I think is so interesting about being online is the ability to almost literally extend your mind to the rest of the world. It’s leveraging at its best and it’s available to serve you if you really want it. Quite frankly I don’t think there are any more excuses about not being able to do what you really want to. It’s actually right there and it’s your choice to use. At least that is how I have found it.On a more practical note, with your own home based business there is no storefront or office to rent, fewer or no additional phone lines to pay for, little or no additional utility expense, little or no additional furniture to buy. If you have a burning desire to be a successful business entrepreneur one day, then starting a Home Based Business is the best way to get your feet wet and display the inherent skills you possess. A home based business has been the starting point for many a successful businessman.Starting a home-based business (HBB) can be rewarding experience for many but it does have its share of frustrations and disappointments. With advantages like flexible work hours, satisfaction of being your own boss, no commuting, tax benefits, it also has disadvantages like increased risk, loneliness, and added responsibilities. Once you’ve decided to take the plunge and start your home-based business, it will need an identity of its own. Creating an identity for your home business is not particularly difficult, but it pays to go about it in an orderly fashion so you won’t have to go back and re-do a lot of the steps you’ve already taken.So, if you have a strong desire to make something happen and you feel you know where you want to go, then there is nothing really stopping you other than the starting hurdle and maybe your own self doubts. What is really great about an online business is that you can start off part-time and gradually learn and develop with minimal risk. Probably one of the most important things to have starts with “P” and it’s not price or purchase. It’s persistence!