Hot Rental Markets the Big Investors Missed

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By Christine DiGangi

For real estate investors looking for new, profitable markets, Texas offers some untapped opportunities. So does Florida. RealtyTrac and RentRage identified the 25 hidden-gem, single-family rental markets across the country, and they’re all in 15 states no farther west than Texas.

The companies analyzed national housing data of three-bedroom single-family homes to produce the list, which is limited to counties with populations of 100,000 or more. They compared properties by gross rental yield (gross annual rental income divided by property purchase price or market value) and the properties’ expected return on investment. Within the top 25, investor purchases made up 5% or less of residential sales May through July, and unemployment rates were at or below 7.5%. The national unemployment rate is 7.3%.

Rental property can be a great investment, but it can also be a costly one, so finding a market to maximize profit can be crucial to success. This is especially true for individuals or smaller institutional investors, who may be dealing with inventories dominated by big buyers, according to Daren Blomquist, vice president at RealtyTrac.

“With this analysis we’ve identified the top overlooked markets where single family rentals still make good financial sense but where there is little to no competition from the big players,” Blomquist said in a news release about the report.

States with counties on the list include Texas, Oklahoma, New York, Tennessee, Florida, Louisiana, Pennsylvania, Ohio, Missouri, Kansas, Michigan, Maryland, Connecticut, Virginia, Wisconsin and Alabama. Texas and Florida each had three counties on the list, while New York, Pennsylvania, Ohio, Missouri and Alabama each had two.

On the opposite end of the spectrum, Georgia counties dominate the most investor-saturated markets, as determined by a report analyzing the same data.

We’ve listed the top 10 rental markets out of the 25 identified in the report, including the metropolitan statistical areas within the ranked counties. [AOL Real Estate has added homes listed for sale in those markets in the $100,000 to $200,000 range.]

HIDDEN GEM RENTAL MARKETS:

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Home Mortgages: Housing-Boom Loans That Are Still Out There

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You don’t hear much about certain types of mortgages these days. Option ARMs, interest-only, stated income, no-money down, teaser rates — many of the most popular types of mortgages from the days of the housing bubble have virtually disappeared. But are they really extinct? Or have they simply gone into hibernation, waiting to emerge again when the economic climate is once again favorable for them?

While some of these truly seem to be gone for good, others have simply retreated to a specific niche in the market. And still others are beginning to re-emerge after a period of dormancy. Here’s a look at some of the better known “extinct” mortgages, along with what mortgage professionals have to say about their current status.

1. Stated Income: Stated income mortgages, or “liar loans” as they were known during the housing bubble, were widely blamed for enabling many borrowers to get into mortgages they couldn’t afford. They’re called stated income because no proof of the borrower’s income is required — the borrower can simply state an income figure and the lender will accept it.

These days, you can’t get a mainstream mortgage — a conforming loan backed by Fannie Mae or Freddie Mac, or one backed by a government entity such as the Federal Housing Administration or the U.S. Department of Veterans Affairs — without documenting your income. However, specialized lenders are beginning to deal in them once again. Why? Because stated income loans have long been popular with self-employed individuals who maximize the deductions on their tax returns, or who have substantial assets but whose income varies from year to year. As a result, their tax returns may not give a full picture of their financial state.

“You may have a doctor who has $500,000 in income but only $50,000 on his return,” said Bruce Spector, a loan consultant with Summit Funding in Reno, Nev. “So that’s great at tax time, but when it comes to qualifying for a mortgage, they can’t do that.” A stated income mortgage allows such people to qualify on just their credit rating and assets, along with the appraised value of the property.

Spector said stated income loans are making a comeback because, in today’s “yield-starved environment,” where CDs and bonds are typically paying less than 1 percent interest, some investors are turning to privately funded mortgages in hopes of getting better returns on their investments. “They’re looking for returns, they’re willing to take that risk,” he said. “There’s money in that, so they’re willing to look at the non-traditional mortgages.”

He said investment firms and private investors put together pools of money that they offer to mortgage banks and brokers to make available to borrowers. It’s not a product that the larger banks typically offer these days, he said. Instead, they tend to stick to mortgages that can be guaranteed by an entity like Fannie Mae or the FHA.

2. No Money Down: It was pretty common to be able to buy a home with no down payment during the first half of the last decade. Some lenders simply didn’t require them and you could even get a no-money-down conforming mortgage backed by Fannie Mae or Freddie Mac by taking out a “piggyback” loan to cover the down payment. These days, zero-down-payment mortgages are almost impossible for most borrowers to get. However, they’re not completely gone. You can still get a no-money-down mortgage through the VA if you’re a qualifying veteran or active-duty member of the military. Also, borrowers with low-to-moderate incomes may be able to get a USDA Rural Development loan with no money down to buy a modest home in a rural area or small community.

Though zero-down-payment mortgages are still hard to come by, it’s becoming much easier to get a mortgage with a small down payment. In fact, it’s even possible now to get a conventional mortgage with only 3 percent down without going through the FHA, according to Richard Whitman, vice president of mortgage lending for Texas Trust Credit Union. That’s because mortgage insurers are becoming more comfortable with insuring those loans, he said.

“If you’ve got a good credit score with 3 percent down, the [private mortgage insurance] isn’t that bad,” Whitman said, referring to the private mortgage insurance required on conventional loans with less than 20 percent down. Whitman said you can still get a 3 percent down Fannie/Freddie-type mortgage even with a credit score in the 660-680 range these days, although the PMI will be fairly costly to someone with a score of 720 or better. But increasing the down payment to 5 percent will reduce the cost of PMI significantly, he said.

3. Interest-Only: During the housing bubble, it was possible for a borrower on a tight budget to get a mortgage where they only had to pay the interest charges and nothing toward the principle — at least temporarily. Eventually though, they had to start making principle payments or refinance into a new interest-only loan. When falling property values made it almost impossible to refinance, these people had to start paying principle – and those who couldn’t afford that lost their homes to foreclosure.

These days, virtually no lender will let you buy a buy a home with an interest-only mortgage. There is, however, one place where interest-only loans are still found — in home construction. Builders will take out a short-term interest-only loan to cover the cost of construction, which will then be converted to a fully amortizing loan when the home is completed and transferred to a new owner.

“Those have always made sense for investors who wish to keep costs low during the first part of the loan, tie up as little money as possible,” said Summit Funding’s Spector. Spector said he’s seen interest-only construction loans coming back to a certain extent, but doesn’t handle them himself. He said such loans are available only through private capital/hard money lending, similar to how stated income loans are handled these days.

4. Negative Amortization: Going even beyond interest-only mortgages were negative amortization loans. On these mortgages, it wasn’t even a requirement to keep up with the interest payments – a borrower’s monthly payment could be less than the interest charges, meaning that the mortgage balance, the amount owed on the loan, would actually increase — negative amortization. The most common of these were Option Adjustable-Rate Mortgages, sometimes referred to as “pick-a-payment.” With these, the borrower could opt for a monthly payment that was less than the underlying interest charges, digging themselves further into debt as time went on.

“The Pay Option ARM had an adjustable interest rate, so while the borrower knew that they could make a tiny payment each month, there was the possibility that their interest rate would rise and the balance on their principal would increase even faster,” said Sam DeBord, a managing broker with SeattleHome.com in Washington state.

DeBord described Option ARMs as “the ultimate boom loan” and “a terrible loan for the average homeowner,” but a potentially good one for savvy investors to use for short-term projects where they wanted to minimize their cash outlay. He said he’s only written one such loan in his entire career, for a multimillion dollar property where the owner wanted to keep his assets free during a remodel and paid it off shortly afterwards.

“If the Neg-Am had only been offered to highly-qualified borrowers, it wouldn’t have been a bad product, but it was too complicated for the average homeowner and many made bad decisions in using it,” DeBord said. After getting burned so badly on them in the downturn, it doesn’t appear that lenders will be offering these types of loans again any time soon.

5. ARMs: ARMs are a type of loan that may seem to have disappeared after being wildly popular during the housing bubble years. In reality, they’re still very much alive, though much less common than they used to be. However, some of their variations that were very common during that time – such as the Option ARM discussed above – have disappeared to the point where they are pretty much extinct.

Though many people think of ARMs as an “exotic” type of mortgage, they’re actually one of the most traditional. In fact, in many countries they’re the main type of home loan. They’re called “adjustable rate” because they start out at one interest rate for a certain period of time, say 5 to 7 years, then adjust to a new rate based on current market conditions – a rate that could be significantly higher than the original one.

Demand for ARMs has shrunk dramatically since the crash, but not necessarily because people viewed them as inherently risky. It’s because the rates on fixed-rate loans dropped so low that ARMs had trouble competing.

“The ARMs didn’t dry up because they didn’t want to do them anymore. They dried up because fixed rates dropped below 4 percent,” said Charlie Walters, a Realtor with Walters Realty Group in Tempe, Ariz. “If rates go back to 6 percent, we’ll see ARMs and we’ll see a lot of them.”

What makes ARMs attractive is that their initial rate is usually lower than on an equivalent fixed-rate mortgage, allowing borrowers to minimize their monthly payments. But in recent years, the difference has been so small, most borrowers didn’t see it as worthwhile, particularly when they could lock in a long-term rate at historic lows.

Even so, ARMs still occupy a small slice of the market because of the advantages they offer a certain type of borrower. “Over the last few years, we’re seeing a bit of the ARMs coming back, particularly 5/1 ARMs, for people who aren’t planning to stay in the home for more than a few years,” said TCU’s Whitman.

He said the loans are coming back in vogue for those borrowers because it doesn’t make sense for them to lock in a long-term loan. Instead, they can get an ARM whose initial term matches the length of time they expect to stay in the home and save a bit on interest.

6. Teaser Rates: What got people into trouble with ARMs wasn’t necessarily the fact the loans were adjustable, but some of the features that were often combined with them. One of the most common of these was the “teaser” rate, where borrowers would start out with a very low rate, but the loan would later reset to a much higher rate. Because these tended to be sold to borrowers who were poor credit risks, they easily got into financial trouble when the “teaser” rate ended and their payments increased. But the banks made enough off the loans to offset the high default rate, at least while home values were still rising.

As an example, Walters said that if fixed-rate mortgages were carrying a rate of 6 percent for borrowers with good credit, lenders might bring in subprime borrowers with a teaser rate of 3 to 6 percent, but that might reset to 9 percent in a fairly short time. Perhaps 7% would default, but the banks made enough off the other 93 percent to make it worthwhile. But that all changed once home prices began to fall and the default rate increased.

“The whole subprime market started melting down, the lenders starting losing money hand over fist, like wildfire,” Walters said. “It was like a switch flipped.” Walters said the basic rule of lending is that if the reward outweighs the risk, the borrower gets the loan. It’s still that way today, he said.

“It’s just after the housing bubble burst and the meltdown, they just know those loans don’t perform any more,” he said. “The bottom line is, those things aren’t coming back, probably never.”

7. Balloon Mortgages: Somewhat akin to ARMs are balloon loans. These are where a borrower gets a loan at a low rate for a certain number of years, often seven, with payments based on a longer amortization, say 30 years. But at the end of the seven years the entire remaining balance comes due, hence the name balloon. The idea is that borrowers would simply refinance the loan at that point. But when home values dropped, many found it impossible to refinance – and instead of simply facing a higher interest rate, they were stuck with having to pay off the entire loan.

Like ARMs, balloon mortgages tend to offer lower rates than comparable fixed-rate mortgages and for the same reason — the lender doesn’t have to worry about being saddled with a low-rate mortgage long-term if rates rise in the future. They’ve also fallen out of popularity for the same reason as ARMs — because rates on fixed-rate mortgages have been so low there’s not much advantage to them.

Balloon loans remain widely available, according to Patrick Palzkill, a real estate broker and mortgage originator with Beacon Rock Real Estate and Mortgage in Boston, Mass., but the current rate differential just doesn’t justify it. “Those are still out there, but they’re just not practical right now, he said, noting that balloon loans work best in an environment where rates are likely to decline.

“No mortgage person worth their salt thinks rates are going to go down,” Palzkill said.

Truly Extinct? As for truly extinct mortgage types, Palzkill doesn’t think there are truly that many of them. Risk is coming back into the market, he said, people want to borrow money and investors will lend it to them if they can make a profit.

“Things haven’t changed that much,” he said. Already, he said, there are tough credit hard money lenders coming back in the market who’ll offer a mortgage to someone with a 500 credit score if they’re willing to put 30% down and pay 7 percent interest with two points upfront. “There’re sharks out there who will take that,” he said.

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New Urban Centers Sub for the Suburbs in the American Dream

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The makeup of the American household is changing. The birthrate is falling, people are getting married later, baby boomers and senior citizens are aging America. Millennials don’t want the neighborhood their parents had, but they might move back in with their parents until they can afford to live in the one they want. These factors are changing where and how we want to live, and reversing the trend of half a century ago of leaving the city for the suburbs. But there’s also a third way — it splits the difference between the choice of living in a traditional suburb or the central city.

“Suburbs were built because people wanted yards and a pool for their kids,” says Leigh Gallagher, author of the recent book, The End of the Suburbs. “When that becomes a priority for a smaller percentage of the population,” then that changes our need for the suburbs, she adds.

The suburbs evoked a certain way of life — white picket fences and cul-de-sacs, soccer moms and bake sales. The ‘burbs are where the upwardly mobile lived. They fled the inner cities for a better life — to fulfill the American dream. But the price could be 30-minute, 60-minute, and in some places 90-minute commutes to work. For many, life became more about the drive and less about the family and the community.

“The suburbs were poorly designed to begin with,” Gallagher says in her book. “People live far from each other and far from their jobs.” Sure, some people still want a front yard — and backyard, and two- or three-car garage, but many others want to be able to walk to stores and walk along a Main Street. “The size of the house is not as important today,” she tells AOL Real Estate. “A walkable neighborhood is more important than a three-story foyer.”

As home prices fell after 2006, more people started moving back to the cities — closer to work. Changing family demographics aided the shift. Since 2000, building activity has decreased in the suburbs and risen in the cities. In Portland, 38 percent of building permits were in the city compared with 9 percent in the early 1990s. The Toll Brothers development company says its “suburban move-up” houses are about 50 percent of what it builds and sells, down from 70 to 80 percent a few years ago.

“The suburbs are built for life with kids,” Gallagher writes, “and we’re not having nearly as many of them.” Families with children used to make up more than half of the U.S. households, but will comprise only about a quarter in 2025, she predicts. The number of households in the ages 30 to 45 have decreased, and so have the number of households of married couples with children. Together they have decreased in number by 3.5 million, and the number of single-person households are multiplying. According to Gallagher, 61 percent of households now have just one or two people and the number of households age 55 and older grew by 9 million between 2000 and 2010.

About the same percentage of people want to live in cities as suburbs, but far more currently live in the latter, according to the Pew Research Center. “The result has been skyrocketing rent and property values in places like San Francisco, New York, and Washington, D.C., wrote the Daily Beast. Millennials may be the most city-loving generation in recent history — 77 percent want to live in an “urban core,” according to an oft-cited survey from real estate firm Robert Charles Lesser & Co. — but they’re also the generation most likely to be living in their parents’ basements.

Many of America’s 80 million millennials, those born between 1977 and 1999, still live at home — even as adults — and when they do leave, they flock to urban areas, Gallagher says. Millennials are also eco-friendly, as are a growing number of Americans. This means the idea of commuting by car in rush-hour traffic for over an hour is not how many want to spend their time or their gas money.

A National Association of Realtors study found that 62 percent of millennials said they’d rather live in a neighborhood near transportation and entertainment than in a community with large lots and no sidewalks. “We don’t hate the suburbs we just hate to be bored,” said one millennial Gallagher wrote about in her book.

Small apartments in New York City, San Francisco and Chicago, Seattle and Boston are being built to appeal to millennials who prefer urban areas but might not be able to afford much space. One researcher whom Gallagher spoke to predicts that by 2025 there will be a surplus of 40 million large-lot homes. Also by then, an estimated 72 percent of American homes will not have any children living at home, and that figure could be as high as 80 percent in the suburbs.

But as more Americans move back to the cities, prices there naturally continue to rise. One solution: Make suburbs more “urban.” “There are hundreds of communities where they are trying to urbanize. … have a walkable, pedestrian feel,” says Gallagher, who lives in Manhattan’s West Village but grew up in in a 1923 stone Colonial in the Philadelphia suburb of Media, Pa. (where her parents still live).

AOL Real Estate took a look at some of the communities Gallagher highlights in her book. These are the new urban areas. “New Urbanism” consists of walkable communities in smaller towns and even suburbs, but they are built to focus on a city center — a Main Street.

NEW URBAN CENTERS:

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What Today's Mansion-Buying Millionaires Want Most in a Home

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By Robert Frank

Wine cellars and tennis courts are becoming passe for today’s mansion buyers. What they really want are open floor plans, smart technologies and really nice pools. A survey from Coldwell Banker Previews International and the Luxury Institute asked homebuyers who make more than $250,000 a year about their priorities or amenities for their homes. To put this group in perspective, their most recent home purchase averaged $1.6 million. More than a third own at least two homes.

When asked about their preferred amenities, the number one choice was “open floor plan,” cited by 39 percent of respondents. Ranking second (32 percent) was “fully automated/wired home environment” — everything from high-speed cabling and integrated music systems to computerized lighting and home monitoring systems. By gender, wealthy men were slightly more tech-oriented than women — 35 percent versus 29 percent.

Third up was a pool (favored by 28 percent), followed by outdoor kitchen, suggesting that the life of leisure is moving outdoors. Women favored the outdoor kitchen far more than men, who presumably are happy with just a barbecue. Having a gym was also important, along with a home theater.

Wine cellars are getting a little stale. More respondents listed them as “less important” than listed them as a priority. Also ranking low was a guesthouse, safe room, separate catering kitchen and a tennis court.

The amenity with the lowest priority was staff quarters. That suggests either that today’s wealthy don’t need so much help-or they’re telling the help to find their own quarters.

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Reverse Mortgage Program Needs a Bailout, FHA Chief Says

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By Andrew Miga

WASHINGTON — A federal housing agency says it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors. At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses.

Carol Galante is Federal Housing Administration Commissioner. Galante wrote Congress Friday that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not required. The agency insures mortgages for millions of homeowners. It’s struggling with $5 billion in losses on its reverse mortgage program.

The FHA suffered big losses when many borrowers 62 or older took large payments up front and later ran into financial problems, often due to falling home values during the financial crisis.

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HOA Dues: 8 Steps to Cutting the Costs

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By Brendon DeSimone

Whether you just bought a condo or have owned one for years, you’ve probably accepted the monthly homeowners association dues at face value. But there are reasons why you shouldn’t. HOA dues are money out of your pocket.

They can have a huge impact on your decision to buy, or not buy, a particular home. For example, you might have fallen in love with a condo in a big complex but decided you just can’t afford the HOA dues. Also, high HOA dues can be a deterrent to future buyers, too, when you go to sell later.

An HOA is made up of residents of the condo building or complex — volunteers who are busy with their jobs and families just like everyone else. It could be that no one on the HOA board has time to look for ways to reduce the monthly HOA dues. But like any budget, there could be lots of ways to reduce expenses. Here’s how you can have a positive impact on your HOA dues:

1. Ask to see the HOA budget. As a condo owner, you have the right to review the HOA budget. Get a copy and check it over thoroughly. If you have questions, ask the HOA president or a board member.

2. Join the HOA board. If you’re on the board, you’ll have more opportunity and more clout to dig into the HOA’s finances — such as its contracts with the property management company, landscapers and so on.

3. Review the HOA’s contracts. An HOA often has agreements with a variety of vendors: the property management company, a landscaping/grounds maintenance company, and so on. In some cases, those agreements or contracts may have been negotiated years ago and might be renegotiated today in more favorable terms for the HOA.

For example, the recent buyer of a condo in an Atlanta complex felt like the HOA dues were too high. So he asked to join the board, and the members were happy to have him. He then performed an audit and discovered money was being wasted in several areas, such as on landscaping/gardening.

The HOA’s agreement with its gardener had been negotiated five years earlier. The gardener, by default, raised his fees every year. The Atlanta condo buyer, with the HOA’s approval, sought bids from a variety of other gardening companies and succeeded in finding a reputable gardener at a lower monthly cost.

4. Reduce landscaping costs. If finding another landscaping or gardening company isn’t an option, maybe the HOA can reduce the frequency of these services, without jeopardizing aesthetics. It’s worth asking.

5. Determine if the HOA is paying too much in property management fees. In large condo developments, the property management company would likely be the one to lead the charge to reduce expenses. But they’re unlikely to advocate lowering their own fees. So you’ll need to work with your HOA directly in exploring ways to reduce the property management company’s fees.

6. Look at insurance premiums. Insurance is often a big HOA expense. Get quotes for insurance premiums and be prepared to renegotiate with your current carrier once your policy comes up for renewal.

7. Defer non-essential maintenance or other projects. Aside from HOA dues, condo owners are often hit with assessments to cover things such as roof repairs and hallway painting. Talk to the HOA board about deferring any non-essential HOA projects for a year or two.

8. Reduce reserves, if possible. Every HOA has reserve funds to cover unexpected expenses. Over time, those reserves, if not tapped, build up. Find out how much the HOA has in reserves. If it’s a healthy amount and no major improvement or repair projects are in the works, ask the HOA board to consider temporarily reducing the amount it puts into reserves every month.

Easier said than done?

Most HOAs will welcome your participation. But your belt-tightening suggestions may require a formal vote from HOA board members or the entire association before they’re enacted. At any rate, understand that changes to the budget may not happen overnight. Finding the fat, renegotiating fees, and asking for additional bids can be extremely time consuming.

Still, it’s worth a try. Talk to your HOA president, treasurer or other board member. Tell them your goal is to simply explore possible ways to lower the association’s cost for everyone’s benefit. A little bit of legwork may save you — and your neighbors — some money every month.

More from Zillow:
3 Ways to Avoid an HOA Horror Story
Demystifying HOA Dues and Special Assessments
3 Ways an HOA Can Screw Up the Sale of a Condo

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

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Renters Guide to Creating a Budget

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By Niccole Schreck

Creating your first budget can be daunting, but it’s extremely important when you’re moving out on your own for the first time. If you bite off more than you can chew, you may not have enough money to buy yourself something to chew on. Here are step-by-step instructions to help you create your first budget:

1. Determine your net income. The first step is figuring out your net income, which is not the same as your salary. Your gross income is what you earn; your net income is what you end up with after taxes, health insurance, Social Security, 401(k) deductions and anything else that comes out of your check. This is the amount of money you’ll have to work with when you’re budgeting.

2. Make a list of monthly payments and expenses. Now the real work starts. Make a list of all of the fixed payments you absolutely have to make each month, including gas, electricity, renters insurance, loans, credit cards, car payments and car insurance. These costs are less flexible than others, so you’ll want to form your budget around them.

Next, write down all of your anticipated expenses. These include basics that you spend money on each month such as cable, Internet, food, household items, pet supplies, gym membership, prescriptions, clothing, hobbies and activities. This is where your online bank account can be an excellent resource. Scroll through your spending over the past few months to ensure you have all of your bases covered with a comprehensive spending list. When you’re figuring out a budget, it’s important to be honest and realistic. Otherwise, your budget loses its purpose. Sure, you keep telling yourself not to spend $100 every month on your wardrobe, but if that’s what you’re spending, it needs to be in your budget.

3. Establish your rent budget. After you’ve budgeted for fixed costs and the basics, it’s time to determine what you can afford for rent. A general rule experts recommend is to spend no more than one-third of your net income on rent per year. However, like every general rule, there are many exceptions. If you don’t think you can afford to spend a third of your net income on rent, don’t do it. Figuring out after the fact that you can’t afford your monthly rent is going to cause a lot of stress for you, your roommates and your landlord. When it comes to making monetary promises, it’s always better to be safe than sorry.

4. Save for emergencies and retirement. It sounds like a pain, but it’s important to put a portion of every paycheck into your savings account-preferably 10 percent of your net income. Even if things are tight and you can only put a small amount away each month, it’s worth it. You will thank yourself in the future when your car breaks down, you need a root canal or you get laid off. Plus, retirement may seem far off now, but your 20s are the perfect time to begin saving because you will accumulate interest over your lifetime.

5. Make tweaks and stick to it. This is the most important step in the budgeting process: You must stick to it! Budgeting isn’t a one-time thing; it’s a life-long process. Review your budget regularly to make sure you’re staying on track and make any necessary tweaks.

Congrats: You are now ready to tackle world on a budget. If you want to move beyond the pen and paper approach, there are lots of websites that can help figure out a budget and track your spending habits.

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Bringing Up the Rear

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Once Tom’s crew rebuilt the foundation, they were able to build over the office. The goal was to build out a master suite; a walk-in closet and bathroom will go into the new space.

They started by reinforcing the existing walls and removing the old roof. Then they installed some wooden I-joists.

The walls went up pretty quickly after that, and then of course they added the new roof. On the first floor they added a bunch of new energy efficient windows that will give the kitchen some much-needed light, and help us keep track of the kids when they’re playing in the back yard.

The new structure looks like this:

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Sources of New Home Sales Financing

While the sources of finance for new home sales have changed noticeably since the start of the Great Recession, cash sales remain more common for existing homes compared to new construction. According to data from the Census Bureau’s Quarterly Sales by Price and Financing, the onset of the housing crisis in 2007 led to a […] Continue Reading →

Four Ways to Know You're on a Home Improvement Show

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In most ways we were a pretty typical family. We had our routine: got up in the morning, got the kids to school, went to work, ate dinner, repeat. Normal stuff.

Then our home was selected as a project for This Old House. And just like that – poof – the routine was gone.

As a service for you, reader, I’ve put together this list. If you notice the following things happening to you, you too may be on a home improvement show.

#1: There are cameras everywhere

One day I came home from work and found this in my living room:

I knew going into this there were going to be webcams, but I had no idea each one was going to be 6 feet tall, make noise and scare the heck out of me every time I walked into the room. Not shown are the ones in the front and back yards, or the one parked outside our bathroom.

#2: Very intense people are telling you what to do. And you do it.

The first filming day was an eye opener. I’ll start by saying the crew is incredibly nice and professional. The folks behind the camera have the same level of expertise in their fields as Tom, Roger, Kevin and Norm.

But once it comes time to shoot an episode, they are all business. Here’s what it looks like when Tom Draught, the director, tells you what to do during a shot.


See the intensity in his eyes? Clearly this is not a man to ignore.

#3: Funny things are happening all around you.

Here’s a picure of TOH series producer Deb Hood showing Tom Silva how to use Twitter. Yes, pigs are now flying. You can follow him here.

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#4: You see this thing parked in front of your house

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I’m sure we’ll get back to our routine once the project is over. But for now we’re enjoying the ride!

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