What is a Brownstone? Pros and Cons of Brownstone Apartments

A brownstone may look like other townhouses, but it’s got some unique qualities.

If you’ve ever pictured yourself living in cities like Chicago, Boston or New York City, you may have envisioned the iconic image of buildings and brownstone apartments lining the streets. Many large, East coast cities are known for the iconic brownstone facades that give the neighborhood a 19th-century nostalgic look and feel.

If you’re considering renting a brownstone, it’s important to know about the rich history of these types of buildings in addition to the pros and cons that come with brownstone homes. We’ll walk you through everything you need to know about renting an infamous brownstone.

What is a brownstone apartment?

A brownstone is a row house made specifically from brown sandstone. The brownstone facade is key — it’s the defining feature that sets brownstones apart from other types of single-family homes. Other defining features of brownstone apartments include:

  • A stone stoop leading to the entryway
  • Ornate details carved or etched into the brownstone face
  • Many buildings in a row with no space in between
  • Three to four floors per building

Brownstone itself is soft sandstone that has a natural brown color, hence the name “brownstone.” The stone is easy to mold, cut and shape so you’ll often see ornate carvings on the face of brownstone homes, another feature that sets them apart.

Originally, the brownstone material was inexpensive and less desirable compared to other building materials like brick, marble or granite. Until the 19th century, buildings made of brownstone were cheaper because the brown color was unappealing. However, that changed during the Romantic era when the natural look became popular. Nowadays, brownstones are some of the most expensive apartments on the market.

Brick townhouses

Brick townhouses

What is the difference between a townhouse and a brownstone?

Brownstones and townhouses are similar in the sense that they’re both buildings with multiple floors, units and apartments for rent. They’re both attached to another building. For example, you’ll have your own unit or floor to live on but you’ll share a wall with your neighbors in these kinds of houses.

You can construct a townhouse out of any building material, but many are brick. However, a true brownstone uses brown sandstone building material, otherwise, it’s a regular townhouse. The facades of brownstones are the specific feature that separates them from other types of apartments.

Because many brownstone apartments are older, they may not have modern amenities like brand new buildings. The construction of many brownstones occurred in the early 19th century and living in these may require some maintenance to keep them up-to-date. Keep this in mind when you’re considering renting townhouses versus brownstones.

Things to know about New York City brownstones

While brownstones are in different cities, they’re especially prevalent in New York City. If you’ve seen any movie or TV show set in New York, you’ve likely seen the iconic brownstone homes in beautiful neighborhoods. True brownstones are in a few key neighborhoods of New York City — Park Slope, Upper West Side, Carroll Gardens, Fort Greene and Brooklyn Heights — to name a few. You can walk up and down the street and see brownstone apartments in these areas of the city.

These houses with their steep stone stoops and ornate brownstone facade give the building charm. They’re often located in desirable neighborhoods, too. Because there’s only a set number of genuine brownstones in New York City, there’s often more demand than supply, so the prices are steep.

NYC Brownstone apartments

NYC Brownstone apartments

Pros of brownstone apartment living

As with anything, there are pros and cons to living in brownstones. Here are some of the pros and cons associated with a brownstone apartment.

Spacious living area

While some single-family homes in a big city are small, brownstones are typically larger. Traditional brownstones will have a parlor floor, which is the second floor from the ground floor. The parlor floor is where you’ll have your dining room and living room. The units usually have three to four bedrooms, but can also have as many as nine bedrooms in each brownstone.

Ornate décor

City brownstones are beautiful buildings. As we’ve mentioned, the appeal of a brownstone is typically the history, the idyllic community and the picturesque neighborhood. The construction of brownstones is ornate and the apartment is usually located on a tree-lined street. When you live in a row house, you’ll enjoy the beauty of the decorative brownstone.

Spacious outdoor area

Some people living in brownstone homes enjoy a nice outdoor space as part of their apartment. You’ll get more room and outdoor seating areas in a brownstone compared to other types of apartments. You can walk up from the ground level and enjoy the front stoop or enjoy private outdoor space in the form of a patio or garden area.

Great location

Most brownstones are in nice neighborhoods with tight-knit communities. Because the units are so close to each other, you’ll be close to the other people living in the same brownstone house. People like the brownstone community as most people end up staying in the brownstone for a long time. The units are often close to different restaurants, so you’ll enjoy the amenities of city life when living in a brownstone, too.

brownstone apartments

brownstone apartments

Cons of brownstone apartment living

For every good thing about brownstones, there are some negatives, too.

Expensive rent

Because brownstones are so desirable nowadays, you’ll pay high prices to live in one of them. In New York, brownstones can sell for up to $10 million. If you’re considering a brownstone, make sure the price is in your budget. If not, you can have a similar experience living in a townhouse without a notable facade.

Older buildings

The historic nature of brownstones makes them appealing but it also means the building is older compared to others. You’ll likely have more maintenance and upkeep in brownstones and may lack traditional amenities and features like air conditioning. Also, the steep stoop and staircases are sometimes problematic as they aren’t as accessible as other spaces.

Close to neighbors

If you’re looking for a place to live with lots of room to roam and privacy, a brownstone isn’t the right option as you’re incredibly close to the people next door. Because these buildings are in a row, you’re literally wall-to-wall with other people. Some love this closeness, while others want more privacy.

Finding a brownstone apartment for you

The intricate design and carvings of brownstone apartments are idyllic. You can’t deny that they look beautiful and conjure images of old-school living in cities like New York. Brownstones have a story and you’ll enjoy the natural look of these buildings. Before renting one, make sure that it’s within your budget as they’re pricy apartments.

Source: rent.com

5 Chinese Stocks Still Worth a ‘Ni Hao’

Chinese stocks, especially in technology and tech-esque industries, have been under unprecedented pressure over the past year thanks to intense regulatory crackdowns, as well as increasing COVID cases leading to strict lockdowns.

The result has been precipitous downturns for Chinese technology stocks such as Alibaba (BABA), Baidu (BIDU) and JD.com (JD), which are off 61%, 38% and 31%, respectively, over the past year.

And yet …

If you’re a nimble investor and looking for stocks to buy, these and other Chinese stocks might be worth a look, given their high marks from Wall Street’s analyst community. A combination of dirt-cheap valuations and recovering business prospects has many pros looking at China as a source of bounce-back potential, even if only for short bursts at a time.

For instance, China’s Vice-Premier Liu He recently pledged support for his country’s technology sector, but Trivium China tech analyst Linghao Bao tells CNBC that this likely signals a temporary reprieve, not a sea change in China’s stance toward technology. “This is a really not a U-turn on the tech crackdown; the long-term outlook hasn’t changed yet,” he says. “Because Beijing has already come to the conclusion that it is a bad idea to let big tech companies to run wild because it creates unfair market competition … wealth will be concentrated at the top and it will start to influence politics.”

Even then, Chinese stocks still face myriad other issues. “While an easing regulatory and policy environment offers Chinese tech stocks a reprieve, significant hurdles will limit their potential further upside,” says BCA Research. “Domestic consumption remains weak, the housing market is sluggish, the online retail sector is saturated and Chinese stocks continue to face the risk of being delisted from foreign exchanges.”

A long way of saying: Chinese stocks look like a high-risk (but possibly high-reward) bet in the short term. But if you want to take a swing, you can improve your chances by listening to what the pros have to say. We’ve used the TipRanks database to look for Chinese shares with tech- and tech-esque businesses that have earned Moderate Buy or Strong Buy ratings.

Here, then, are five Chinese stocks that might be worth a closer look.

Data is as of May 25. Stocks are listed in reverse order of the amount of upside potential implied by TipRanks-surveyed analysts’ consensus price targets.

1 of 5

Tencent Holdings

Tencent buildingTencent building
  • Market value: $409.2 billion
  • TipRanks consensus price target: $44.00 (3% upside potential)*
  • TipRanks consensus rating: Moderate Buy

Tencent Holdings (TCEHY, $42.57) is a Chinese internet conglomerate founded in 1998. The company’s businesses span communication and social services including Weixin and QQ, targeted advertising, cloud fintech and business services.

Like many Chinese communication stocks, Tencent stumbled during the first quarter of 2022. Revenues were flat year-over-year, at $21.3 billion, while adjusted net profits declined 23% to $4.1 billion – its steepest such drop since it went public in 2004. The company’s mobile pay offerings were hit hard by COVID-related lockdowns.

Tencent CEO Ma Huateng, while admitting to a tough first quarter, said the company “implemented cost control initiatives and rationalised certain non-core businesses, which would enable us to achieve a more optimised cost structure going forward.” Huateng added that Tencent “continued investing in strategic growth areas including enterprise software, Video Accounts and international games.”

The company is likely to have a tough 2022, says JPMorgan analyst Alex Yao, though with potential upside. Yao expects that while rising COVID cases in China could have an adverse impact on Tencent’s business segments (including non-gaming, cloud and fintech business), he anticipates the company’s online gaming business to be resilient as Tencent has “several new games in 2Q22 pipeline.”

What’s more, the analyst is optimistic that the resumption of gaming license approvals in China could be “incrementally positive to Tencent’s ads recovery in 2H22.”

TCEHY shares have roughly halved in value from their 52-week highs in June 2021, but Yao believes they’re likely to recover. The analyst believes Tencent can sustain its growth over the long term as it focuses on three strategic areas: international gaming, long-form video and software-as-a-service (SaaS). Indeed, Yao double-upgraded several Chinese stocks in May, including Tencent, to Overweight (Buy) from Underweight (Sell).

The analyst community as a whole is quite bullish on the company’s stock. Using ratings of its Hong Kong-listed stock, Tencent earns 36 Strong Buys and nine Buys, versus four Holds, two Sells and no Strong Sells, according to S&P Global Market Intelligence.

The Tencent American depositary receipts (ADRs) – TCEHY shares, which U.S. investors have access to – have just two analysts covering it, with one Buy and one Hold. But that low amount of traffic is typical of international companies whose primary listings are outside of the U.S.; based on Hong Kong shares’ ratings, Wall Street is quite high on this Chinese communications giant. Hear what else the pros have to say about TCEHY on TipRanks.

* Similarly, while TCEHY shares have just 3% indicated upside based on the tiny number of analysts covering it, they have 18% indicated upside based on analysts covering the higher-volume Hong Kong shares.

2 of 5

Bilibili

stuffed Bilibili animestuffed Bilibili anime
  • Market value: $8.3 billion
  • TipRanks consensus price target: $38.29 (99% upside potential)
  • TipRanks consensus rating: Moderate Buy

Bilibili (BILI, $19.27) was initially launched as a website in 2009 in China and, according to the company, has “evolved from a content community inspired by anime, comics and games (ACG) into a full-spectrum video community covering a wide array of interests” including games, lifestyle, entertainment and anime.

And like other Chinese stocks, Bilibili also has evolved from a higher-priced stock into a much lower-pried stock, with shares off nearly 60% year-to-date and more than 80% over the past 12 months.

The company’s woes might not be over yet, either.

“We expect delays/cancellations of ad budgets after mid/late March, when major cities including Shanghai started strict COVID-19 mobility restrictions that depressed consumer sentiment and disrupted e-commerce logistics,” a UBS analyst team (Buy) said in early May. “According to [management], Bilibili’s major e-commerce warehouse in Kunshan, a city near Shanghai, has been locked down, and a significant number of orders cannot be fulfilled.”

JPMorgan’s Yao, who upgraded the stock to Neutral from Underweight to May, says e-commerce and advertising revenues could slow during the first half of 2022 “due to logistic difficulties and weaker advertiser demand.” However, COVID-related lockdowns could benefit BILI thanks to “higher stay-at-home entertainment demand.”

Also likely to dampen BILI’s first-half results was the aforementioned Chinese gaming regulation, which was meant to limit time spent on gaming by children 18 and younger. Yao expects this will result in a fall in time spent by users on Bilibili’s platform and a drop in value added services revenues.

Wall Street analysts are cautiously optimistic, with a consensus Moderate Buy rating among eight pros who have sounded off over the past three months – five call BILI a Hold, three say it’s a Buy. However, there’s nothing cautious about their consensus price target of $38.29, which implies a near doubler over the next 12 months. See the full rundown of analyst ratings for BILI on TipRanks.

3 of 5

Trip.com

Woman working at Trip.com headquartersWoman working at Trip.com headquarters
  • Market value: $12.6 billion
  • TipRanks consensus price target: $28.50 (46% upside potential)
  • TipRanks consensus rating: Strong Buy

Trip.com Group (TCOM, $19.57) is a global travel platform whose portfolio of brands includes Ctrip, Qunar, Skyscanner and its namesake Trip.com.

Many travel-related companies have been hammered by the COVID-19 pandemic, and Trip.com is no different – off 40% from the February market peak, though its troubles hardly came in a straight line. TCOM shares recovered all of their COVID losses before the end of 2020 and surged into early 2021 before dropping like a rock. The stock has lost more than 55% of its value since its March 2021 peak.

There are some silver linings. For one, short-haul travel has proven extremely popular in China. Trip.com said on its Q4 2021 earnings call in March that “strong performance for short-haul travel extended into the early Chinese New Year holiday, with local hotel reservations increasing by more than 20% year-over-year.”

TCOM has also improved its content strategy to drive up its content conversion rate, which doubled in the month of February this year as compared to the same period last year.

Deutsche Bank analyst Leo Chiang, who rates TCOM at Buy, notes the company’s “improved operational efficiency” and believes the firm is “well positioned to benefit from the industry’s recovery and even gain market share.” He adds that Trip.com’s international brands, Skyscanner and Trip.com, will gain traction and benefit from a global travel recovery.

Chiang did lower his revenue forecasts for fiscal 2022 and 2023 (by 17% and 6%, respectively) to reflect the threat of the Omicron COVID variant in China, and he lowered his price target to $31 per share, from $34 previously. But he remains bullish on the stock, and his new 12-month target still implies almost 60% upside.

Chiang is in good company. TCOM is a Strong Buy-rated Chinese stock featured here, thanks to nine Buys and just two Holds among analysts who have released notes on the stock over the past three months. Check out other analysts’ price targets and analysis for TCOM at TipRanks.

4 of 5

New Oriental Education & Technology Group

A sign posted in Chinese characters outside of New Oriental Education & Technology Group headquartersA sign posted in Chinese characters outside of New Oriental Education & Technology Group headquarters
  • Market value: $1.9 billion
  • TipRanks consensus price target: $16.07 (47% upside potential)
  • TipRanks consensus rating: Moderate Buy

Edtech companies such as New Oriental Education & Technology Group (EDU, $10.94) in China have been a beleaguered lot after the Chinese government started cracking down on these companies in 2021. Specifically, China’s state council barred for-profit firms from tutoring children in any subjects that are part of the core curriculum, and it also forbade foreign investment in for-profit educators.

The crackdown expanded this year, when, according to Bloomberg, Chinese regulators banned high school online tutoring classes over a school break in February and said edtech companies would have to “wait for clearance before resuming such courses.”

New Oriental Education was forced to lay off 60,000 people in 2021, profits plunged and shares have lost more than 90% of its value since May of last year, making EDU one of the worst Chinese stocks over the past 12 months.

So … why take a chance on it?

Beijing’s rules are clearly still having a colossal impact on EDU. In its fiscal Q3 2022, reported in April, revenues were off 48.4% to $614.1 million. However there were a couple green shoots. New Oriental’s overseas test prep and overseas study consulting business revenue was up 15% year-over-year, and domestic test prep targeting adults and university students shot 59% higher.

“Simultaneously, we are actively exploring various new business opportunities, including non-academic tutoring, intelligent learning system and devices, study tour and research camp, educational materials and digitalized smart study solutions, as well as exam preparation courses designed for students with junior college diplomas to obtain bachelor’s degrees,” says Michael Yu, New Oriental’s executive chairman.

JPMorgan analyst DS Kim upgraded the stock to Neutral from Underweight, saying “We still struggle to find ways to trade this name on fundamentals, as it’s nearly impossible for anyone to project the scale and profitability of its ‘post-AST (after-school tutoring)’ businesses. Having said that, the stock is really cheap – more than cheap, actually – as it’s trading at a negative enterprise value (i.e., current net cash position well above its market cap).”

The Street is cautiously optimistic here, with two Buys and two Holds among analysts that have sounded off over the past three months. But it’s safe to say EDU would be the riskiest Chinese stock on this list, given the regulatory hurdles it faces. TipRanks offers up a full analyst rundown of EDU shares here.

5 of 5

Pinduoduo

person shopping for groceries on Pinduoduo appperson shopping for groceries on Pinduoduo app
  • Market value: $48.4 billion
  • TipRanks consensus price target: $63.00 (64% upside potential)
  • TipRanks consensus rating: Moderate Buy

Pinduoduo (PDD, $38.31) is a niche mobile-only online marketplace that “connects agricultural producers with consumers across China.”

Like the rest of the Chinese stocks listed here, PDD shares have been clobbered of late. The stock has shed 70% of its value over the past year, with 34% of those losses coming in 2022.

But Pinduoduo is coming off a particularly promising first-quarter earnings report. Q1 revenues were up 7.3% year-over-year to $3.8 billion, while net income swung to a $410.1 million profit from a net loss of $434.4 million in 2021. Both metrics easily outdid analyst estimates. Also encouraging was a 4% rise in average monthly active users.

Prior to the earnings report, a team of UBS analysts upgraded the stock to Buy from Neutral.

“We upgrade PDD as we believe the company has proven its business model is sustainable, and it can stay profitable despite a slowing macro and intense competition,” UBS says. “We see balanced top- and bottom-line growth going forward, driven by [average revenue per unit] and operating leverage” amid a strategic shift from sales and marketing to research and development, respectively.

The team says this is similar to inflection points for JD.com (JD) and Meituan in 2019, “when those platforms improved margins while delivering respectable growth.”

JPMorgan analyst Andre Chang double-upgraded the stock to Overweight from Underweight in May, and also juiced his 12-month price target to $55 per share (44% implied upside) from $27.

“As the stock trades more on market expectations of future revenue, we believe key to stock performance in 2022 is its revenue growth rate relative to market expectations, particularly online marketing revenue growth,” Chang says. “Despite the COVID impact in the near term, we forecast PDD’s online marketing revenue growth rate to sustain at teens throughout 2022 and recover to mid to high teens in [the second half of 2022].”

Seven of 11 analysts surveyed by TipRanks categorize PDD stock as a Buy. Hear what else the pros have to say about PDD on TipRanks.

Source: kiplinger.com

What Does Income-Restricted Housing Mean?

Each state works with the federal government to provide affordable housing to renters with limited incomes.

There are nearly 1 million income-restricted apartments and rental homes in the United States. That translates into the federal government spending more than $51 billion annually to assist low-income Americans to have a roof over their head.

Different types of income-based apartments comprise the affordable rental housing landscape. Some are government-owned apartments. And private landlords who underwent an extensive screening process to gain acceptance into the subsidized housing hold others.

What is income-restricted housing?

Income-restricted housing is also known as affordable housing or public housing. The U.S. government established income-restricted apartments as The Great Depression of the 1930s destroyed the worldwide economy. Industrial output plummeted, unemployment soared and families became destitute.

Affordable housing became scarce as the economy worsened. The federal response initially began as the Public Housing Administration. In 1965, the U.S. Department of Housing and Urban Development (HUD) came about from five existing agencies.

Congress in session

Congress in session

Congress takes action on income-restricted apartments

With economic devastation plaguing Americans following The Great Depression, Congress passed the Affordable Housing Act in 1937. That statute implemented several measures to help develop new and rental housing across the country.  It did so while also subsidizing the rental costs of income-restricted tenants. That program allows private property owners, in addition to government-owned apartments, to offer subsidized housing for low-income families.

Around the same time, Section 8 housing started under the Section 8 Housing Act of 1937.

What is Section 8 housing?

Section 8 is the informal name of the Federal Housing Choice Vouchers Program. The federal government continues to oversee this housing voucher offer.

Participants in the program find their own housing and pay rent with a ‘housing choice voucher.’

How do you apply for Section 8 benefits?

Applying for the Federal Housing Choice Voucher Program is simple. The first step is to contact your local Public Housing Agency (PHA). They will help determine your eligibility. After that, you must complete an application seeking information about total household income, family size, assets and debts, for starters. A criminal background check is also required of applicants.

Keep in mind that in some areas, the waiting list to receive Section 8 benefits, including subsidized housing, is extremely long. For this reason, it’s best to start the process sooner rather than later.

Section 8 housing

Section 8 housing

What makes you eligible for Section 8 assistance?

You might be wondering if you’re eligible for Section 8. While the PHA will be able to tell you for sure, there are a couple of factors that play into eligibility for Section 8 that you can consider ahead of time. You must:

  • Be at least 18 years of age
  • Be a U.S. citizen or eligible noncitizen
  • Make no more than 80 percent of your area’s median income
  • Must have not been evicted in the past 3 years for drug-related criminal activity

Not all rentals can become Section 8 housing

Not all property owners want to make their rentals available to Section 8 tenants. However, some states or municipalities have guidelines requiring property owners to accept tenants with government housing vouchers. But that’s not the standard nationwide.

Property owners who wish to have their apartment complexes considered for Section 8 housing should consult the Section 8 Program guide.

Types of public housing

While their names are similar, there are two distinctly different flavors of affordable housing in the U.S. One commonality between them is they both involve government-subsidized living.

Income-restricted housing

In income-restricted housing, rent prices are set on the median income for the local area. The government then caps rental fees at a certain percentage of that figure. That price fluctuates based on state law and the apartment’s size.

Income-based housing

Meanwhile, rent prices for income-based apartments are based on the tenant’s adjusted gross income. That comes with rent capped at 30 percent of that figure. Unlike income-restricted housing, the rental price of income-based apartments has no connection to the area’s average income levels.

States play a key role in affordable housing

Even though HUD oversees affordable housing at the federal level, the state level sets the barometer for median income levels.

That’s because average income levels vary wildly from state to state, and even from county to county. It would be incredibly unfair if average monthly rent prices were just as high in poorer states or counties as they are in wealthier areas.

HUD calculates the median income levels for each metropolitan area within the United States on an annual basis. Once they get that figure, HUD details the maximum income a person may earn to qualify for government subsidies.

Section 8 high-rise

Section 8 high-rise

What are income-based housing limits?

HUD rates a renter’s income eligibility for government subsidies by basing it on area median income (AMI). The thresholds used by HUD to determine housing voucher eligibility are:

  • 30% AMI: Considered extremely low income and are given priority for housing vouchers
  • 50% AMI: Considered very low income and are eligible for housing vouchers
  • 80% AMI: Considered low income and are often on waiting lists for housing vouchers

In general, the lower a tenant’s income, meaning the lower their AMI, the higher priority their application for subsidized housing is given.

Role of the local public housing authority

HUD implements its subsidized housing program on the state level through a local public housing authority (PHA).

There are PHA offices in many cities across the United States. To find the one that serves your area, check the Official Housing Authority.

The PHA is an extremely important player in the low-income housing landscape because it administers both the state and federal guidelines to receive government subsidies.

Determining eligibility for public housing

The local housing authority determines a tenant’s eligibility for income-based programs.

Considerations include:

  • Annual gross income
  • Whether an applicant qualifies as elderly, disabled or a low-income family
  • U.S. citizen or eligible immigration status

Since income limits vary from jurisdiction to jurisdiction, and sometimes, even city-to-city, be sure to check HUD’s correct income graph for the county, size of family and AMI of the applicant.

How to apply for income-restricted apartments

In order to apply for an income-restricted apartment, low-income renters should contact their local PHA. One way to find them is to check the HUD Field Office website.

The application process is slow and tedious, so don’t expect anything to happen quickly. In addition to the usual governmental bureaucracy, the demand for income-restricted apartments has increased markedly, making competition fierce and wait times far longer.

Applying for affordable housing isn’t an easy task. There’s also huge unmet demand for affordable units than there is the supply of subsidized housing. Many applicants spend years on the waiting list before receiving government assistance, which patience is imperative.

Eligibility requirements

Required information for income-restricted subsidized public housing includes:

  • Names of all persons who would be living in the unit, including their gender, date of birth and relationship to the family’s head of household
  • The applicant’s current address and telephone number
  • The family’s specific circumstances, such as whether the applicant is a veteran or currently living in sub-standard housing qualify the applicant for special eligibility consideration
  • The members of the household are all U.S. citizens or eligible immigrants
  • An estimate of your family’s anticipated maximum income for the next 12 months and the sources of that income
  • Names and addresses of employers, banks or any other information the HA requests to verify your qualifications for subsidized housing
  • Eviction for criminal activity: The members of the household can’t have an eviction from public housing or Section 8 for drug-related criminal activity in the three years prior

Filling out an application

Filling out an application

Providing documentation

The applicant must provide all the information requested in the application in order to qualify for an income-restricted apartment. In addition to the documentation you provide, the PHA may also contact your employer or other people they believe can verify or dispute your claims as to why you qualify for government housing.

Next steps

If the low-income applicant meets the eligibility requirements to receive government subsidies, their next step is to submit a written application for a housing order.

Assuming all the information submitted in the application checks out, the tenant must then partake in an in-person interview with a Housing Authority representative.

Wait times vary

Wait times for that in-person meeting vary state to state and even from one jurisdiction to another. The waiting list also prioritizes applicants with greater need. So, it’s advisable to contact the PHA to determine where you are on the waiting list. You can do so by calling the HA or checking online to see if they provide that information.

Along the way, be certain to maintain all your application materials organized and handy. You never know when you might hear from your PHA.

Written notice

A public assistance applicant will receive a written notice to verify if they received acceptance or were denied government housing assistance. Once an applicant qualifies, their name goes on a waiting list for housing.

There are rare circumstances when a PHA can help an applicant immediately. But normally, they get on the waitlist if they’re eligible for government assistance.

Home sweet home

The more specific housing needs a low-income family has for their apartment, the longer it will likely take for such a place to become available. Unfortunately, the public housing system in the United States is overwhelmed by the sheer number of applicants and the lack of sufficient housing units to provide them to all those in need.

Therefore, the best a person can do is apply, sit and wait.

Source: rent.com

A Complete Renter’s Guide To Understanding Your Apartment Lease Agreement

Here’s an overview of the types of lease agreements and important terms to understand before signing on the dotted line.

Renting your first place with a roommate or paying rent on your own for the first time means you need to submit a rental application to rent a residential property. Once a landlord accepts your rental application, you’ll review and sign an apartment lease agreement.

Understanding the terms of a rental lease agreement is important for both the landlord and tenant. Legally binding contracts are not something a property owner or property management company takes lightly.

It’s important for both the tenant and property manager to understand what’s included in an apartment lease agreement before it’s signed.

The lease agreement also protects both parties since the terms can’t change once it gets signed. The landlord can’t change the monthly rent amount or add a pet fee if the lease doesn’t include a pet policy.

What is a rental lease agreement?

A lease agreement is a legally binding contract between the landlord and tenant for a particular piece of real estate. It outlines the rules agreed upon by both the landlord and the tenant in clear lease terms. The lease agreement includes important details, including the type of real estate, monthly rent amount and the lease term.

A security deposit is part of lease agreements, even in a month-to-month lease agreement. Sometimes, house rules include a pet policy not allowing pets or no smoking allowed in the unit or on the real estate property. These house rules should be in the lease agreement so there are no misunderstandings.

Verbal agreements are difficult to enforce. Anything discussed should be in the final rental or lease agreement. A verbal agreement is useless if one of the parties forgets what they said or flat out denies it.

If a landlord doesn’t offer aan apartment lease agreement, a tenant could ask for one.

Read your rental lease agreement and know what it means.

Read your rental lease agreement and know what it means.

Types of leases in a rental agreement

There are many lease agreements available when someone rents a property.

Most fixed-term lease agreements include a lease period of 12 months. A month-to-month rental lease agreement is not uncommon. Each rental lease agreement includes how much rent the tenant pays each month and when the monthly rent amount is due. It also notes the security deposit amount, whether there’s a pet deposit and the lease end date.

It also includes other details, such as who is responsible for utilities, property maintenance, property repairs and whether parking is available as part of the real estate to those who pay rent or if it’s included in the monthly rent.

Legal terms, monthly rent details and other things in an apartment lease agreement

A lease agreement is a legally binding contract. Take the time to read it so you know what you’re renting, what you can do on the property and what you can’t.

While many are standard agreements, each rental agreement should outline, for example, how much advance notice you need to provide should the lease end date need to change or what the pet policy is for the rental properties.

Governing law refers to the state laws that govern the lease. In most cities, standard residential leases are governed by and construed in accordance with state laws.

It’s important to review the rental lease agreement closely as it outlines what is considered normal wear and tear.

For example, if a tenant decides to paint the whole apartment or remove blinds and put in curtains and there’s no written consent as part of the lease terms, the security deposit may not be returned if the rental property manager needs to pay to have the unit repainted or add blinds.

What each section means in a sample lease

Lease agreements are pretty standard but it’s good to note what each should include. Here are what each section means in a sample lease.

Property details

The rental lease agreement should include basic facts about the rental property. Each agreement includes the address, landlord or property manager’s name and contact information. It notes when the lease begins and ends, the monthly rent amount and what the monthly rent includes, such as appliances and parking.

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Payments, deposits, lease termination, late fees

In addition to how much rent is expected every month, the lease agreement should make it clear when each month’s rent is due by and what, if any, late fees can be expected if you pay rent late. If you have a roommate, what might happen should one of you need to end the lease early?

Does the lease agreement note you’ll need to provide the first month’s rent and last month’s rent and a security deposit?

If a security deposit is due upon the signing of the lease, how is it handled upon lease termination? What’s considered normal wear and tear and what will be covered by a security deposit?

How much advance notice does a tenant need to give a landlord of their intent not to renew a lease once the lease expires or once the landlord lets the tenant know the monthly rent amount will increase? It should note the monthly rental rate does not increase during the fixed period of the lease.

Resigning or breaking your lease

Life happens, a new job opportunity in another city presents itself or something happens in which you need to break your lease. There are things your landlord will appreciate as part of a good landlord-tenant relationship.

It’s a good idea to review the details of the agreement, including what kind of advance notice you must give. There could be many reasons why you may have to break your lease. It’s important to know what’s at stake if you have to break a lease. You could lose your security deposit and your last month’s rent. You could also be responsible for finding someone to sublet your apartment or need to pay each month’s rent until your lease ends.

Include everything in writing to save time and money

Renting a new apartment can be a fun experience. Knowing the terms of your new home by reviewing the lease agreement can save both time and headaches in the short and long term. Having this legally binding agreement can help avoid misunderstandings, too.

Source: rent.com

Who Is Warren Buffet and Why Is He Such a Famous Stock Investor?

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Additional Resources

Chances are you’ve heard of Warren Buffett whether you’re an investor or not. The billionaire is one of the richest people on Earth and has been outspoken throughout his career in the stock market.

Buffett is the picture of what people can accomplish when they start investing early and pay close attention to the fundamental analyses of the companies they back. 

But Warren Buffett isn’t your run-of-the-mill Vanderbilt cookie-cutter billionaire. This investing wunderkind-turned-business magnate may be one of the most intriguing examples of the American Dream in recent history.


Who Is Warren Buffett?

Warren Edward Buffett was born in Omaha, Nebraska, on Aug. 30, 1930, to Leila and Howard Buffett. His father was a businessman, investor, and politician. 


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Events in his childhood in Nebraska played a major role in his success today. 

As a young child, Buffett showed an interest in making money. To do so, he sold soft drinks door to door and ran a paper route. 

Buffett made his first stock purchase at just 11 years old when he bought six shares of Cities Services for $38 per share. He gave his sister three shares and retained the other three for himself, but the move wasn’t the biggest of successes. 

Shortly after buying the shares, Cities Services shares fell to around $27 before bouncing back to $40, where the Buffett siblings sold their positions. Soon after the sale, Cities Services shares climbed to $200, teaching the “Oracle of Omaha” a lesson on patience. 

At 17 years old, Buffett invested $25 in a pinball machine — a machine he believed would grow to become a gaming empire. He walked into a barbershop with a business proposition for the barber, Frank Erico. If the barber let Buffett install a pinball machine, the two would split the profits. 

The next day, the machine was installed, and the two collected $4. By the end of the first week, they had enough money to invest in another pinball machine. 

Buffett graduated from Woodrow Wilson High School in 1947 and went on to study at the Wharton School of the University of Pennsylvania. He later transferred to the University of Nebraska. When seeking a dedicated business school education, he was famously rejected from Harvard Business School. Nonetheless, Buffett touts his rejection from the school as one of the best things that’s ever happened to him. 

The Harvard rejection opened the door to Columbia Business School, a division of Columbia University. He studied under Benjamin Graham, also known as the Father of Value Investing. The lessons from his mentor would shape his style of investing and give him everything he needed to generate his future success. In 1951, Buffett graduated and went on to build his career as an investor. 


Warren Buffett’s Investment Career

Buffett’s love for investing started when he purchased his first stock at 11 years old and was nurtured by his mentor Benjamin Graham. His investment career was marked by several milestones since those events, each building on the other to make Buffett the massive success he is today. 

Buffett-Falk & Co. 

After graduating from Columbia, Buffett attempted to work for his mentor, Graham, but was denied a position. In fact, Graham said Buffett should pursue a career outside Wall Street, an idea that Howard Buffett agreed with. 

But Warren Buffett moved back to Omaha to pursue his Wall Street career, ignoring warnings from his father and mentor. 

Now back in Omaha, Buffett worked for his father’s investment firm, Buffett-Falk & Co, despite his father not being a big fan of the idea. 

Buffett’s Move to New York

Buffett decided to move to New York to dive deeper into the market after working at his father’s firm for about five years. Buffett would build on the lessons he learned from Graham and his father early in his career as he worked on Wall Street. 

Buffett Goes Back Home

In 1956, Buffett decided to move back home to Omaha, and when he did, he purchased a house and launched Buffett Associates, Ltd. He became a millionaire while operating his investment firm before he met yet another important figure. 

Buffett Meets Charlie Munger

When Warren Buffett was 30 years old, the young millionaire met Charlie Munger, yet another important figure in his life. The two hit it off, forming a partnership that would last to this day. The two focused their investment efforts on Buffett’s investment philosophy of looking at value investing as something more than tapping into potential profits from dying companies. 

Berkshire Hathaway Acquisition

In 1965, Buffett and Munger decided to purchase Berkshire Hathaway, which was a struggling company at the time. The two worked to bring the company back to life, and today, it’s one of the largest investment holding companies in the world. 

The investment firm now owns massive brands like Geico, Dairy Queen, Fruit of the Loom, and Duracell. The company also invests in a long list of massive companies, such as Apple, Pilot Flying J, and Coca-Cola. 

Interestingly enough, Berkshire Hathaway has never paid a dividend and doesn’t plan to. In fact, the company is famous for its unwillingness to pay dividends. Buffett explains this strategy by outlining the fact that the firm has better things to do with its money, specifically growing it through acquisitions and investments. 


Warren Buffett’s Investment Strategy

Buffett’s investment philosophy is centered around intrinsic value. His goal as a value investor is to invest in companies that are undervalued when compared to their competition while producing strong earnings, offering compelling valuation metrics, and having a clear path toward growth in the future. 

Outside his role as a value investor, Buffett is also an activist investor. 

As an activist investor, Buffett and his firm, Berkshire Hathaway, purchase large percentages of struggling companies. The goal is to buy enough shares to force meaningful changes in operations and often management. 

Once he and his firm acquire their positions, they propose things the companies can do to improve value for shareholders. If the companies refuse, Buffett and his team often force votes as a result of their large stake in the companies, giving investors the opportunity to help push for meaningful improvements. 


Warren Buffett FAQs

Warren Buffett isn’t the average investor, businessman, or even husband. He’s a one-of-a-kind person that commands the attention of the room. These are the answers to some commonly searched or asked questions about the popular investor.

What Is Warren Buffett’s Net Worth?

Warren Buffett’s net worth is $127.3 billion as of April 2022, making him the sixth richest person in the world. His wealth accounts for enough money to buy nearly 34,000 homes or 2.7 million cars or send 3.6 million high school grads on a fully paid ride through college to earn a bachelor’s degree at average prices across the United States. 

Why Is Warren Buffett Called the “Oracle of Omaha”?

Buffett is often referred to as the Oracle of Omaha because the investing community tends to follow his moves closely, as believers would follow the word of an oracle. Of course, the Omaha part of the nickname comes from the fact that the billionaire was born in Omaha, Nebraska. 

Does Warren Buffett Own Berkshire Hathaway?

Berkshire Hathaway is a publicly-traded company trading under the ticker BRK. As a publicly-traded company, there are thousands of owners because anyone who owns a share of the company’s stock owns a piece of the company. 

However, Warren Buffett has retained 30.71% control of Berkshire Hathaway as the company’s largest shareholder. 

Who Is Warren Buffett Married To?

Warren Buffett was in an open marriage with Susan Thompson from April 19, 1952, until the day she died in 2004. Buffett later married Astrid Menks, his current wife, a woman his late wife introduced him to. 

As was the case with Susan Thompson, Buffett maintains an open marriage with Menks. 

Does Warren Buffett Have Children?

Yes. Warren Buffett has two sons and a daughter: Howard, Peter, and Susie Buffett. Like their father and mother, his children also have a passion for charity. Unlike many children of wealth, they do not live luxurious lifestyles.

Who Was Warren Buffett’s Mentor?

Benjamin Graham, also known as the Father of Value Investing, was Warren Buffett’s mentor as he learned the art of value investing. Graham earned his pseudonym because he introduced the idea of fundamental stock analysis to the world. 

His theory that you can determine whether a stock is likely to rise or fall by studying valuation metrics is the foundation of the value investing strategy countless investors use today. 

Is Warren Buffett Really Giving Away 99% of His Wealth?

Yes, Warren Buffett has pledged to give away 99% of his riches. So far, he’s donated about $41 billion, with most of the money going to the Bill & Melinda Gates Foundation and the foundations developed by Buffett’s three children.

In August of 2010, Warren Buffett and Bill Gates introduced The Giving Pledge to the world. The two urge the world’s wealthiest individuals to give at least 50% of their net worth to charity. 

To date, 231 of the world’s richest people across 28 countries have taken the pledge and agreed to donate at least 50% of their net worth. 


Final Word

As one of the richest investors to ever walk down Wall Street, it’s no surprise so many people want to learn how to invest like Warren Buffett. Looking back at his career, there are a few steps to doing so. First, start early. Next, focus on value. Finally, pay close attention to fundamentals when making your investments.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

Source: moneycrashers.com

How to Refinance a Car Loan – 6 Easy Steps for Better Auto Payments

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Sometimes, you need to buy a car, even if your credit isn’t in a good place. If that happened to you, you might be stuck with a high-interest-rate car loan. 

While the auto loan you drove away with isn’t the best, you have some options. Any change in your financial situation for the better means you can qualify for a better loan, allowing you to refinance to get more favorable loan terms.

If you want lower monthly payments and a lower interest rate, refinancing your current auto loan is the way to go. 

How to Refinance a Car Loan

Refinancing your current loan can reduce your monthly payment, lower your interest rate, or shorten the loan term for a faster payoff. If you play your cards right, you’ll save money in the long run and reach your other personal finance goals sooner. 


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But before you call a lender, follow these steps to ensure you get the best deal possible.

1. Determine Whether Refinancing Makes Sense for You

Refinancing isn’t right for everyone. The process takes time and can cost money, so you want to ensure you’ll benefit financially before you jump in. 

Ask yourself a few questions before you decide to go forward. 

  • What Interest Rates Are Available? Interest rates were at historic lows for a while but are starting to climb again. Before you start the refinancing process, confirm the available rates are actually lower than what you’re currently paying.
  • Does Your Current Loan Have a Prepayment Penalty? Some car loans have a prepayment penalty, meaning you have to pay a fee to pay off your loan before the end of the term. Depending on the size of the penalty, it can make it more expensive to refinance.
  • How Much Is Your Car Worth? The value of some vehicles drops quickly once you bring them home. If your car is older or doesn’t have a great reputation, it might not have a high enough value to justify refinancing your loan and a lender might not let you take out a new one.
  • How Long Do You Have Left on Your Original Loan? If you just got a loan and have a few years left to pay off it, refinancing it may be the right move. But if you’re almost finished paying off the loan, it might not make sense to get another one.
  • Do You Have Upcoming Large Purchases? You might want to hold off on refinancing if you have other big-time purchases coming up. For example, if you want to get a mortgage on a new home within the next few months, refinancing your car loan might be a roadblock to getting the best terms on a home loan.
  • How Much Does Refinancing Cost? In addition to the interest you pay, car loans typically have loan origination fees, a type of processing fee. Depending on the size of the fee, refinancing might cost you more money than it saves you.

2. Check Your Credit

You might not have had the best credit when you got your loan, but if you’ve been making on-time payments for a year or so, you’re likely in better shape now than you originally were.

The only way to know for sure is to check your credit score. Luckily, that’s pretty easy to do now. You can visit AnnualCreditReport.com, provide your information, and access your reports from the three credit bureaus for free.

Generally, you can only access your report for free once per year. But the bureaus loosened up their rules during the COVID-19 pandemic and now let people take a peek at their reports weekly for free, though that’s unlikely to last.

Your credit card, credit union, or bank might also give you free access to your credit report and credit score. Often, free credit monitoring is available through a financial institution’s mobile app or website. 

If you don’t like what you see on your credit report, you have options. First, reach out to the credit reporting agency if you notice any mistakes on the report. Mistakes can include:

  • Closed accounts being reported as open accounts.
  • A misspelling of your name.
  • Accounts belonging to someone else, usually a person with a similar name.
  • Multiple listings of the same debt.

If you’re not happy with your credit report because of your own actions, such as late payments or missed payments, you can take steps to improve your credit. But raising your credit score can take time.

Anything over 780 will get you the best rates, while a score between 661 and 780 will get you a decent rate. If your score is under 660, you can still get a car loan, but the interest rate will be high.

If you’re happy with your credit score and the results of your credit check, you can proceed with the next steps. 

3. Gather the Relevant Documents

You need to give the lender several documents when applying for a car loan. To make the loan application process go as smoothly as possible, get your paperwork in order before contacting any lenders. You need to have:

  • Personal Details. The lender will most likely need your Social Security number, driver’s license, current address, and details about other loans or financial obligations you have.
  • Vehicle Identification Number (VIN). Your car’s VIN is like its fingerprint. It’s a 17-character code that identifies your specific vehicle. It’s usually on the driver’s side where the dashboard meets the windshield. It’s on a metal plate and should be visible from the outside. Along with the VIN, it helps to have other details about your car, like the number of miles on it and its model year.
  • Proof of Insurance. You most likely need to have auto insurance just to own a vehicle legally. Your lender needs to see proof of coverage.
  • Proof of Income. Gather proof of your income, such as your pay stubs, W-2s, or income tax returns. Your income influences whether you can get approved for a refinance and the rate you get.
  • Details About Your Current Loan. When you refinance, you pay off the existing loan with the new loan. The lender needs to see the details of your current loan, such as the lender name and amount. 

4. Get Prequalified

It pays to shop around when refinancing your car loan. Prequalification gives you a good idea of the interest rate, loan term, and amount you can borrow. 

Getting prequalified isn’t the same as submitting a loan application. The lender just looks at your current loan, your credit, and the type of car. Using that information, they can give you a rough estimate of the type of loan you can get. 

Prequalification is a soft credit inquiry, so it won’t cause your score to drop. It’s also not a guarantee of anything. You might prequalify for a certain rate, but once the lender does a hard credit check and looks more closely at your financial documents, you might end up with a different loan offer.

Still, find out if you can get prequalification from several lenders before moving forward. 

If you can’t get a lender to prequalify you, now isn’t the time to refinance. It could be due to your credit, which you can fix, or the age or value of your car, which you can’t.

5. Compare Offers

Ideally, several lenders will prequalify you. The more prequalification offers you have, the better you can compare car loans. The loan term, interest rate, and monthly payment affect how expensive the new car loan will be.

  • Loan Term. The loan term is how long you have to pay off the balance. A longer term usually means a lower monthly payment, but you’ll pay more interest over time. You can choose the loan term, usually in 12-month increments, usually up to 84 months (seven years).
  • Interest Rate. Ideally, when you refinance your car loan, you get a lower interest rate than you currently have. The rate available to you can vary from lender to lender.
  • Monthly Payment. The monthly payment is how much you have to pay every month, including principal and interest. A rock-bottom monthly payment looks appealing but often means the loan term is longer and you pay more in the long run. A higher monthly payment gets your loan paid off sooner but might strain your budget.
  • Fees. Your new auto loan might have several fees, such as a lender fee, origination fee, and title fee. Compare the costs of each fee and weigh the fees’ costs against the cost of interest. For example, a loan with higher upfront fees might have a significantly lower interest rate, so you still save money in the long run.

When you’re reviewing your offers, the big question to ask yourself is whether you want lower payments at a higher cost over time so it fits into your monthly budget or bigger payments at a lower cost so you can pay your debt off sooner (and cheaper).

6. Submit Your Application

Once you’ve picked a lender to work with, the rest is pretty easy. Fill out the application and provide any documentation or details the lender requests. 

As you go through the refinancing process, keep making payments on your current car loan. You’re still responsible for the payments until the new lender approves your application and pays off the current debt.

If all goes well, you’ll get approval from your lender. You can then read and sign the contract for the new loan. When reviewing the contract, be clear on when your first payment is due and when the refinancing company will pay off the current debt. If you have a payment coming due before the refinancing is complete, pay it to avoid a late payment showing up on your credit.


Final Word

If your current car loan has a high interest rate, high monthly payment, or just doesn’t work for you, refinancing can get you a more affordable loan or give you the financial flexibility to reach other financial goals. 

Compared to refinancing a mortgage, refinancing a car loan is pretty straightforward. You don’t have to have your car appraised or go through a complex closing process all over again. Once you’ve submitted your application, you can expect the refinancing process to be over and done in a matter of hours.

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GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.

Amy Freeman is a freelance writer living in Philadelphia, PA. Her interest in personal finance and budgeting began when she was earning an MFA in theater, living in one of the most expensive cities in the country (Brooklyn, NY) on a student’s budget. You can read more of her work on her website, Amy E. Freeman.

Source: moneycrashers.com

Does a Landlord Have to Provide Air Conditioning? Your Rights as a Renter

If you find yourself in San Antonio, TX, in August, you’ll immediately understand the definition of a ‘hot summer day.’ The average temperature in the city home to The Alamo averages a steamy 96 degrees that month. With heat like that, an air-conditioned apartment sure would feel great to come home to. But does your landlord have to provide AC to you?

Despite the summer heat, it might surprise you that Texas does not mandate landlords to provide air-conditioning in rented apartments, townhouses or homes. Instead, Texas state laws defer to rental laws in effect. That might be surprising, especially since an average of 702 heat-related deaths (with 415 directly related to heat exhaustion) occurred in the United States annually, according to the Centers for Disease Control and Prevention.

State laws and a tenant’s right to air-conditioned living

Texas is not the only state that does not require landlords to equip rented units with AC. In fact, every state follows its own set of regulations pertaining to the duties of landlords and the rights of tenants.

In fact, landlord-tenant laws differ in each of the 50 states. Beyond that, cities and other governing bodies promulgate their own statutes on the matter. That means that even if a state’s laws do not require a landlord to provide working air-conditioning in their rental units, a city or other entity may enact legislation mandating they do in that particular municipality.

One way to decipher what is legal and what is not in your state is to contact the Consumer Protection Division where the residence is. While that site does not answer questions directly, it provides links so users can connect with a governmental agency in their state for further information.

Local laws

In addition to state laws governing landlord-tenant relationships, local jurisdictions, such as cities or villages, may establish their own building codes. Those rules set standards for matters like electrical wiring, smoke alarms, plumbing and ventilation. For example, a local law governing security might require the landlord to install additional locks or other safety precautions on an entry door or windows.

Your landlord doesn't have to provide AC to you.

Read your lease carefully

Not surprisingly, AC is among the top considerations for would-be renters. There are steps a would-be tenant can take so the unit they wish to rent has working air-conditioning prior to signing on the dotted line.

One is to take a personal tour of the property in question prior to committing to the rental contract. If there are no window units or no central air, ask about it. Don’t just assume it will be there on moving day if it’s not there during your tour.

Also, while you’re touring the apartment, check the workability of the AC by turning it on. Be wary if the landlord balks at this suggestion.

It’s also imperative to read your rental agreement carefully before signing it. Is air-conditioning mentioned? Who pays for the apartment’s electricity? If it’s the tenant and the window AC unit is old, it may not run efficiently or be in good working order. Does the lease mention such scenarios and explain who’s responsible for the maintenance and repair of the AC?

And, if your air-conditioning breaks, review your lease to determine the steps you’re supposed to take. You may have to contact your landlord directly or your community’s maintenance department. There could be provisions for after-hours emergency maintenance, too.

Implied warranty of habitability

In most jurisdictions in the United States, landlords must provide two services to tenants to ensure the rented unit fulfills the implied warranty of habitability. They are:

  • The resident needs sufficient access to essential utilities, such as sewer, electricity, water and heat
  • The rented property must be free of dangerous or life-threatening conditions. These include exposed wires, rodents, insect infestations and contaminated water.

Even if a rental agreement specifically requires a landlord to make repairs on the property, an implied warranty of habitability means the unit is just that: habitable.

An important component of an implied warranty of habitability is the tenant’s duty to pay rent. That covenant makes it easier for tenants to enforce the landlord’s responsibility for the maintenance of the unit.

Another clause to look for in a rental agreement is the prohibition of retaliation by a landlord against tenants who file housing code violations. Consult state and local laws for further details about what constitutes a violation of the jurisdiction’s implied warranty of habitability, if it even has one.

Duty to repair

Generally speaking, if a rental unit has air conditioning units, the landlord must repair them. That’s true even if state laws did not require a rental to have air-conditioned, but the landlord provided it, anyway.

That being said, the landlord should include who is responsible for repairing a malfunctioning AC in a lease. For example, even if AC is in a unit, a rental agreement may state that the tenant is liable for repairs to a malfunctioning air-conditioner. It might also indicate that while the landlord is responsible to complete the repairs. The costs associated with doing so are possibly tacked on to the rent. A lease could also relieve a landlord from responsibility for any type of repair if that’s how it’s written.

Your landlord repairing the AC is not a given.

Timing of repairs

Most state and local laws require repairs happen within a reasonable period of time. Just as each state maintains its own landlord-tenant laws, each one also defines that term differently.

For example, Texas law provides specific instructions for handling repair situations for rental units.

In Ohio, landlords are required to provide air conditioning units in rentals. Tenants must provide written notice to their landlord about the situation. And, according to Ohio law, the notice must come by U.S. mail.

In the Buckeye State, a ‘reasonable time’ is no more than 30 days. However, in case of an emergency, such as a malfunctioning furnace, the time for repair goes down to five days. Moreover, a tenant must permit the landlord access to the property to make the necessary repairs. Conversely, the landlord must provide the tenant with reasonable notice when the repairs will happen, generally defined as 24 hours. Emergency situations call for more immediate action.

Keep your cool to stay cool

Although air conditioning is among the most highly coveted amenities of rental living, there’s no uniform law across the United States requiring all landlords to provide it in their rental units. That means it’s imperative to personally tour a proposed property to ensure working AC is available if you want it. It’s also wise to review the lease agreement to determine the responsible party for the costs associated with repairs.

How To Save Money on Rent: 10 Ways To Reduce Your Rent Payment

With rent climbing higher than ever, these tips can help you save money and stay within your budget.

If you’re apartment hunting right now or are on the verge of renewing your lease agreement, you’re probably noticing a trend. The rent is getting higher and higher. After a slump in rental prices caused by the pandemic, the price of rent is rebounding by hundreds, or even thousands, of dollars. Rent has already been climbing steadily over the past few decades, but this recent spike is pricing many people out of their homes or cities.

Thankfully, not all hope is lost for renters. While the high cost of rent is scary, there are ways you can reduce your monthly payments or find cheaper rates that fit your budget. Sometimes, you can negotiate with your landlord based on years of good behavior as a tenant or in exchange for services like maintenance repairs. Other times, it’s changing the location of where you live or how big your space is. Here are 10 tips for how to save money on rent.

Why is rent so expensive right now?

If it feels like rent is especially high right now and just keeps getting higher, that’s because it is. Due to a variety of factors, the cost of monthly rent has been climbing all over the U.S. But why has rent suddenly gotten so expensive?

The pandemic is partly to blame. When it began, many people moved away from big, pricy cities and metropolises seeking more room and space. With more units available and less demand, many landlords lowered their rents. But now, with people moving back to big cities, the demand is back and prices are jumping accordingly, with rents adjusting to and surpassing pre-pandemic levels.

Because of the extremely hot and competitive housing market, more people are staying renters instead of becoming homeowners. This means there are more and more people looking at and applying for a narrowing amount of rental units.

The lack of available units and rental units is another factor. There are simply not enough apartments and rental spaces available on the market to meet the large demand. Knowing that renters are desperate and have few options, a landlord can charge inflated prices.

These and other factors combine to make an expensive, difficult-to-navigate rental market. Potential renters also face challenges like real estate agents or investors with deep pockets who can pay upfront for a whole year or pay far more than the landlord is asking for the rental price.

Higher rents also mean a higher security deposit and other fees associated with renting like getting a background check on your credit report. If you don’t have enough savings, it’s hard to afford this process multiple times.

Combine all this and the high rental rates with the increasing cost of monthly expenses like utility bills and groceries, and lots of people are feeling the pinch right now. Luckily, there are steps you can take to save money and keep your rent down.

Tips for saving money on your monthly rent payments

Is your rent too darn high? Try these tips on how to save money on rent at your current or future apartment.

Move out of the big city.

Move out of the big city.

1. Move away from a city center

Sorry Petula Clark, but downtown is no longer the place to go to escape your worries and not be alone. Why? Because living downtown or near the city center is generally more expensive and you’ll likely need a roommate to afford it.

There’s more demand to live close to the heart of a city. It’s usually closer to offices and work, and it also lets you take advantage of all the perks of living in a big city. Dining, shopping and entertainment are all close by. But, you do pay a premium in rent for that access and proximity.

Even in the most expensive big cities, you can find more affordable rents in outlying neighborhoods and districts. When it comes to finding lower rental rates, choose your location wisely and live outside the city center. Yes, you’re not as close to all the city action. But you will save more money to actually enjoy those big-city attractions.

2. Find a smaller unit

Smaller apartments will have a smaller price tag. If you want to save money on rent, downsizing the size of your apartment is a great way to do so.

Larger apartments like two-bedroom apartments will always fetch higher rent. They’re bigger with more square footage, storage and other desirable amenities. So, if you’re finding yourself priced out of your two-bedroom apartment, look into smaller options like a one-bedroom apartment or a studio. With less square footage, these smaller apartments offer discounted rent.

You sometimes don’t have to look far for a more affordable new apartment, either. If you really like where you’re living but can no longer afford your current apartment, look at other units in your apartment complex. Apartment complexes will usually have numerous unit options size-wise. Yes, it does mean you’ll have a smaller room and smaller apartment overall. But it’s also a better deal.

A roommate will help you save money on rent.

A roommate will help you save money on rent.

3. Move in with a roommate

Having a roommate is one of the oldest tried and true ways to save money on rent. If your apartment or house is big enough to accommodate it, sharing the space and costs with a roommate — or several — helps a lot rent-wise. Everyone in the house splits the rent, so when it comes time for the landlord to collect rent, it will hurt your wallet a bit less.

Having roommates is also a great way to keep an apartment or house if rent has suddenly increased. If the rent has become too high but you can’t bear to part with your beloved home or moving out isn’t feasible for you, start looking for roommates. Living with a roommate, you can also split other housing costs like utility bills. It keeps costs down for everyone in the apartment or house.

Of course, this option won’t work for everyone. Some people value their personal space and alone time too much. Others don’t have big enough units to accommodate more people. But it can also be a lot of fun. You can meet new people and make new friends. Or, you can live with friends or move in with a significant other.

4. Pay more money upfront

If you have enough savings, you can offer the landlord more money upfront in exchange for reduced monthly rent. Think of it as similar to a down payment on a house. The more you pay upfront, the less you have to pay per month. For renting, it would reduce the amount you owe each month.

This is a more unconventional option, so you need to discuss it with your landlord in advance to see if it’s an option they’d consider.

A longer lease agreement will help save money on rent.

A longer lease agreement will help save money on rent.

5. Sign a two-year lease agreement

Scared of those pandemic rent price jumps that are going on? Rentals that were far cheaper in 2020 and 2021 now upping rent by hundreds or even thousands of dollars? One way to avoid those rent hikes is by signing up for an extended lease.

Instead of a standard one-year lease, sign an extended lease for two years or longer if you really like the place and want to stick around. There are numerous benefits to signing a long-term rental contract.

First, since they’ll have a new tenant locked in for several years, a landlord will sometimes reduce the monthly amount for rent. Since they know they won’t have a vacancy for a while, a price cut is sometimes acceptable.

Also, by signing a long-term lease, you can lock in the current rate for longer. After one year, even if rates are going up in other units, yours can’t change for another year. It’s good protection against a fluctuating market and high demand.

6. Search for rentals in the fall or winter

The time of year you’re looking at new rentals can also influence the price of rent because demand varies throughout the year.

Summer is usually the worst time to look for a new apartment. For one thing, the school year is over, so it’s an ideal time for families to move. People also have more time and availability on summer vacation. College students are also out for the summer and are moving cities. This time of flux for work and school means there are lots of people looking for new places to live.

Time your move and apartment search to happen during the fall and winter to find a better deal. Schools will be back in session, families are busy and there’s less hustle and bustle in the renting market. The cost of rentals may also be down due to reduced demand during this time period. Even if there’s not a big difference in cost, you can take advantage of the lack of demand to negotiate for less money.

Don

Don

7. Give back your parking space

If your unit comes with a parking space but you don’t have a car or use it, you can use it as a negotiation tactic.

Especially in the middle of a city, parking is in high demand. Landlords who can provide spaces to park cars have a definite advantage. Renters prefer to have a designated spot instead of hunting for parking on the street. It’s also safer for the car.

So, if you have a space you don’t intend to use, you can offer to give it back in exchange for reduced rent. In large apartment complexes where there aren’t enough spaces for all the tenants, your landlord might give you a discount for this convenience.

You’ll also save yourself from having to pay the additional fee that usually comes with having a parking space.

8. Look for units that aren’t updated

Newer and flashier comes at a premium.

One way a landlord can entice applicants is by updating units. Those fancy new apartments with updated appliances, granite countertops, hardwood floors and other splashy amenities will cost more because of all those upgrades. Yes, they look great. But the amount the landlord is charging is far more than the unit is actually worth.

To save money, look for units that haven’t been recently updated. This usually means they’ll have older appliances. They aren’t as attractive, and sometimes, they’re inefficient appliances because they’re not the newest models. But they’ll still get the job done. And, if they don’t work or end up breaking? That’s what landlords and maintenance are for.

Another way to save money on rent? When given the option between a furnished and an unfurnished unit, opt for the unfurnished place. They’re more affordable. Plus, it’s always more fun to bring your own furniture and make the place your own.

Fix everything yourself if you hav the skills.

Fix everything yourself if you hav the skills.

9. Offer to fix things yourself

Are you handy at fixing things? That may earn you a break on rent.

A landlord needs someone to fix things and offer maintenance services for their units. Usually, they’ll source this out. If you have verifiable experience as a handyman or can show your adeptness for fixing things, that someone could be you.

In exchange for your help around the property fixing minor issues and doing small repairs, your landlord may offer to discount your rent in exchange for these services.

10. Negotiate

Finally, one of the simplest ways to save money and pay less on your rent? Negotiate for a lower rate with your landlord.

As with any negotiation, it may not always work. Especially right now, landlords might not negotiate. But it never hurts to ask, and there are some circumstances where it can come out in your favor.

Say you’ve lived in the unit for a long time and have been a model tenant, but your lease is almost up and you’re facing an increase. Now is an ideal time to talk with your landlord. As a good tenant, you have some leverage. Explain that you want to stay but the new lease amount is too much. You can request a reduced amount based on your history as a model tenant. Your landlord may or may not go for it, but if they do, congratulations.

How much should I spend on paying rent?

The general rule of thumb is that you should only spend around 30 percent of your gross monthly income on rent. The idea behind this is that it creates a balanced budget. That goes toward your housing cost, leaving 70 percent for everything else like food, utilities, bills, savings and more.

This is a good idea in theory, but it definitely doesn’t apply to everyone and it can vary. You can always find an affordable place that’s under budget and less than 30 percent. Or, maybe you’re paying a bit more than 30 percent for rent, but you don’t have as many additional expenses.

The 30 percent is a good baseline, but it does vary. So, figure out what works best for you and your budget. You can check how much your rent is per month using our rent calculator.

Save more when the time comes to pay rent

Being able to afford rent is a serious challenge these days. These tips on how to save money on rent will pay off come the beginning of each month.

Source: rent.com

What Is the Average Annual Income in America? -Salaries in the USA

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Additional Resources

Income is a key part of a healthy financial picture. You can use your income to cover expenses, make investments, and build your net worth. 

In some cases, your income comes from active sources like a full-time job or a collection of side hustles. In other cases, you’ll have income coming from passive sources such as dividends from your investment portfolio. 

But how does your income stack up against your peers? Let’s see how income breaks down across the United States.


What Is the Average Annual Income in America?

As of 2020, the average wage was $55,628.60, according to the Social Security Administration (SSA).


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The SSA is one of the best sources for U.S. income information because it uses the average wage index to track raw wages each year. 

Raw wages are employment compensation that is subject to federal income taxes, as reported on W-2 forms. The income included on your W-2 would cover regular wages, tips, and more. 

Average Household Income in America

The average income index is used by the SSA to make adjustments on an annual basis. But the national average wage index doesn’t measure a household’s entire income throughout the year. Instead, it leaves out any income received through side hustles and investment dividends. 

Because many people don’t earn traditional W-2 wages, the median household income tracked by the U.S. Census Bureau is important to consider as well. In 2020, the median household income was $67,521, which was a decrease of 2.9% from the median household income of $69,560 in 2019. This decrease was likely due to the economic impacts of the COVID-19 pandemic. 

Meanwhile, the slight increase in wages reported by the SSA reflects a long-term trend of increasing average wages across the country. Although nominal income has increased over time, real wages take inflation into account. And with that, the gains in nominal wages are eaten away by inflation. 

Mean vs. Median Wages and Income

When looking at the numbers, it’s important to differentiate between mean and median wage and income figures. 

The mean income or wage represents what most people refer to as average income. If you take the income of all earners in the country and divide it by the number of workers, you have the average income. 

The median income or wage refers to the place in the distribution where there are an equal number of higher and lower figures on either side. To find the median income or wage, you need to line up the income of all earners from smallest to largest, then pick the value exactly in the middle. 


Average Household Income in the U.S. By Demographics

Household income in the U.S. is tracked by the U.S. Census Bureau. As mentioned above, the median household income in 2020 was $67,521.

However, median household income varies dramatically by age, race, education level, gender, and region. To gain a better understanding of the average income in America, we need to break down the data by demographic category.Luckily, the Census Bureau provides a clear breakdown in its 2020 report on Income and Poverty in the U.S.

Age

With age comes experience, but how does that impact your earning potential? 

Age of householder Median household income
15 to 24 years old $46,886
25 to 34 years old $71,566
35 to 44 years old $85,694
45 to 54 years old $90,359
55 to 64 years old $74,270
65 years and older $46,360

The median household income of $76,800 for those under age 65 contrasts sharply with a median household income of $46,360 for those older than 65. Income only rises with age until 55, after which it begins to drop quickly. 

Education Level

Education level has a big impact on the median household income. Generally, education is positively correlated with income — the farther you get in school, the higher your earning power.

Education level Median household income
No high school diploma $29,547
High school diploma, no college $47,405
Some college $64,653
Bachelor’s degree or higher $106,936

However, the type of degree you get does matter. For example, the U.S. Bureau of Labor Statistics (BLS), found that the average wage for a physician or surgeon was $208,000 per year. But those jobs require several more years of school — and more student debt, on average — than most professions. 

Race/Ethnicity

Income inequality is painfully apparent when you look at the income statistics by race and ethnicity. 

Racial Groups Median household income
White $71,231
White, non-Hispanic $74,912
Black $45,870
Asian $94,903
Hispanic, any race $55,321

It’s easy to see that income earners are impacted by their race or ethnicity. Asian Americans have a dramatically higher family income than the median household income in the U.S., while Black and Hispanic Americans of any race have lower household income than the average. 

Gender

The gender income gap is also disheartening. According to the U.S. Census Bureau, women are over-represented in lower paying jobs. Additionally, the pay gap grows as they age. In fact, the Quarterly Workforce Indicators put out by the U.S. Census Bureau indicated that women earned 30% less than their male counterparts. 

Based on data from the BLS, women earned 82 cents for every dollar earned by a man in 2020. Women who worked full-time in 2020 earned a median income of $50,982, compared to $61,417 for their male counterparts. 

Household status Median household income
Female householder, with no spouse present $49,214
Male householder, with no spouse present $67,304
Female householder, non family $35,574
Male householder, non family $47,259

Based on these numbers, it’s painfully obvious that women earn less than men. Although the gender pay gap has regularly shrunk since the passage of the Equal Pay Act of 1963, there’s still a significant difference. One reason for this is that women are over-represented in lower-paying industries. 

State/Region

The area you live in has a big impact on your earning opportunities. Luckily, Census Bureau data offers a closer look at the median household income by U.S. region. 

The Northeast covers the Eastern Seaboard states from Maine to Maryland. The South includes everything south of Delaware and west past the Mississippi River into Arkansas, Texas, and Oklahoma. The West includes the Pacific coast states inland to the Rockies. And the Midwest covers everywhere else. 

Region Median household income
Northeast $75,211
Midwest $66,968
South $61,243
West $74,951

The South has the lowest household income, just slightly behind the Midwest. With higher costs of living in many parts of the Northeast and West regions, it’s not terribly surprising that the median household income is a bit higher. 

Beyond the region you live in, whether or not you live inside of an official Metropolitan Statistical Area (MSA) matters. Typically, rural workers — people living outside MSAs defined by the U.S. Census Bureau — have lower median earnings. 

Metropolitan Statistical Area (MSA) Status Median household income
Inside MSA $70,956
Outside MSA $51,616

Bigger population centers tend to have more employment and business opportunities. But cost of living tends to be higher in cities and suburbs too.


Putting the Average American Salary in Perspective

The average American salary can be sliced and diced in so many different ways. But two of the most interesting ways to look at these numbers include the distribution of incomes in relation to the poverty line and how these numbers are changing over time. 

Income Distribution in the U.S.

The median salary of workers in America is $55,628.60. But by definition, 50% of Americans earn less than the median. Many of them earn less than the federal poverty level.

Whether or not a household is living in poverty is determined by considering the household income and the number of people living in. 

For example, a household with one individual over the age of 65 would need to earn at least $12,413 to be considered above the poverty line. But a three-person household would need to earn $20,932 to break the poverty line. According to the U.S. Census Bureau, the poverty rate was 11.4% in 2020. That figure represents 37.2 million people in poverty that year. 

In sharp contrast to the poverty line are the top 1% of earners in the country. The 1% threshold varies dramatically based on your state. According to data from the IRS and BLS analyzed by Smart Asset, American families needed to earn at least $597,815 in 2022 to be considered the top 1%. 

Average American Salary Over Time

The average American salary has grown over time. 

In 1951, the national average wage index was $2,799.16. Since that first year of data collection, the average American salary has grown to $55,628.60. 

It’s clear that wages have grown. But what about when inflation is taken into account? 

When you look at the national average wage index of 1951 in inflation-adjusted dollars, it would be $27,894.59 in 2020. Since the average household income was $55,528.60 in 2020, real wages have approximately doubled the inflation rate during that time. 


Average American Income FAQs

Still have questions about the average income in America? Here are the answers to some of the most common ones. 

What Is a Good Income in 2022?

The definition of a good income varies dramatically based on your individual situation. For example, if you live in a higher cost of living area, you’ll need to make more to live comfortably. 

In most of the country, a single person earning $67,521 or more per year should be comfortable. After all, that’s the median household income for the U.S. That equates to approximately $1,300 in weekly earnings. 

The definition of a good income changes based on your household size. If you have kids, you need to earn more to be financially comfortable. 

Additionally, where you live has an impact on your income needs. For those in a high cost of living area, a higher salary is necessary just to make ends meet. All else being equal, you can’t stretch a $67,000 salary as far in New York City or San Francisco as you can in a small rural town.

Of course, more income is always a good thing, regardless of your family size or where you live.. 

Does the Average U.S. Salary Make You Middle-Class?

According to the Pew Research Center, the middle-class is defined as those making between two-thirds to double the national median income. Since the median household income is $67,521 in 2020. The average household income of $55,628.60 would be considered middle-class. 

What Does the Top 1% Make in America?

According to 2022 data from the IRS and BLS analyzed by Smart Asset, American families need to earn at least $597,815 per year to be considered in the top 1%. But the 1% threshold varies dramatically based on your state.

For example, if you live in Mississippi, an annual income of $361,462 puts you in the top 1% of earners in the state. But you’d need to earn at least $810,256 to be in the top 1% of earners in Massachusetts. 


Final Word

Beyond keeping food on the table, higher income can help you tackle your personal finance goals. 

Although it’s tempting to compare yourself to the U.S. household income numbers, don’t take these numbers too personally. Instead, pursue an income that will allow you to live a comfortable life. It’s not necessary to be in the 1% to build a solid net worth. 

If you want to see how your net worth stacks up against the average, dive into the numbers with us. 

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I’m also including a bio here: Sarah Sharkey is a personal finance writer who enjoys helping people make better financial decisions. When not nerding out about money, Sarah enjoys traveling, hiking, and reading. You can connect with her on her blog Adventurous Adulting.

Source: moneycrashers.com

Home Birth vs. Hospital Birth Costs – Is Natural Birthing with a Midwife For You?

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Additional Resources

When preparing to have a child, it’s crucial to consider the financial aspects. It may not be as costly as financing an adoption, but pregnancy and childbirth bring a financial burden. And the total cost largely comes down to whether you choose a home birth or hospital birth. 

As soon-to-be parents, you naturally want to make the choice that gives your baby the greatest chance to survive and thrive. However, the cost of giving birth in the United States is high, and health insurance plans are complicated. 

While there are many personal and emotional reasons to choose home or hospital birth, you must also consider the financial implications.   

Home Birth vs. Hospital Birth Costs 

When deciding between giving birth at home or in a hospital, look at the cost of having a baby in either situation. Four primary factors are involved: pregnancy and prenatal care, labor and delivery, a hospital stay, and postpartum care. 


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Home Birth Cost Factors

Home birth seems like it should be less expensive than a hospital birth. But the costs can add up quickly if you go in unprepared.

Insurance Coverage for Home Births

Some states’ insurance allows coverage for home births — but not all of them. As of May 2020, only 21 states covered home birth under the Medicaid program, for example. 

As you’re preparing, a couple of things are essential: asking your insurance carrier what types of birth they cover and ensuring you choose something that fits the bill. Some insurance companies may only cover a home birth with a certified nurse-midwife attending, while others may only cover a midwife if you give birth in a birthing center. 

So it’s key to communicate clearly with your insurance provider. Find out what your out-of-pocket costs are for any deviations from their typical requirements. 

Home Birth Prenatal Options

Home birthers typically receive a similar level of prenatal care as those having a hospital birth. However, when you decide on a home birth, you might work closely with a midwife, doula, or both. Each birth assistant has different roles and responsibilities.

  • A doula is a guide who provides physical and emotional support before, during, and after childbirth. They may be doula-certified, but they are not necessarily medical professionals. 
  • A midwife is a trained professional who assists healthy individuals in childbirth and provides prenatal and postnatal care. Training varies, but certified nurse-midwives have completed a training program, making them the safest (and most expensive) option.

Doula and midwife fees vary greatly based on geographic location and services provided. It’s usually more expensive in cities and higher-cost-of-living areas. 

For example, in a large city in the Dallas-Fort Worth, Texas, metro area, you can find doula packages ranging from $1,600 to $2,500. But in a significantly smaller city like Abilene, Texas, they’re less than $1,000. But going to an even higher cost-of-living area like New York City may mean a minimum of $2,000.

Typically, the doula fee includes a specific number of prenatal visits, prenatal support and information, assistance during labor and delivery, and at least one postpartum visit. Typically not included are prenatal vitamins, any required lab work, or any type of hospital visit. 

Midwives are generally more expensive. Because of the wide variance in things like certification status, it’s hard to put a solid number on midwife costs. But expect to pay on the high end of doula costs at a minimum. But some midwives may charge $5,000 or more.

Note that the fees for doulas and midwives may not include necessary medical exams like regular OB-GYN visits and ultrasounds. And those cost just as much as they would for a hospital birth if they’re not included as part of your package (some midwives and doulas work with OB-GYNs).

You also need prenatal vitamins, which are relatively inexpensive. For example, many prenatal vitamins range from about $0.08 to $0.48 apiece at Walmart. Over nine months of pregnancy, that’s only between about $20 and $130. Fortunately, you don’t need a prescription, so there’s no added cost for a doctor’s visit.

Home Birth Labor & Delivery Costs

Fortunately, if you’re electing for a home birth, you’re skipping one of the most significant expenses associated with childbirth: the hospital stay. That’s a major benefit many expectant parents appreciate about the home-birth option. Ideally, you’d incur zero hospital costs. 

And doula and midwife packages typically include labor and delivery. 

A midwife will usually provide equipment like IVs, sterile gloves, gauze pads, a thermometer, and waterproof bed covers. You may want to ask your midwife just to be sure, though. Doulas may provide some of this equipment, but they’re not authorized to insert IVs unless they’re also medical professionals. 

You may also have to purchase special equipment if your doula or midwife doesn’t provide them. Costs vary, depending on the types of supplies you need. 

Even if your midwife or doula doesn’t provide them, simple items like waterproof mattress covers cost under $40 on Amazon. But if you need a birthing tub, you’re looking at $100 or $200 and up at a retailer like Oasis or La Bassine. You can also look into renting one, though you may not save much money if you need to keep it for several weeks.

Fortunately, midwife and doula fees include some services hospitals may ask you to pay for, such as facilitating skin-to-skin contact. Even if it doesn’t cost much, it’s annoying to pay to hold your own baby.

If your home birth expenses come down to just a few thousand dollars paid to a midwife, that may sound like a simple decision from a financial standpoint. 

But you need to consider the safety of both the mother and baby. The infant mortality rate for babies born at home is several times higher than the rate of babies born at hospitals, according to a 2010 to 2017 study featured in the American Journal of Obstetrics and Gynecology. 

And just because you plan to give birth at home doesn’t mean it will turn out that way. So plan your ideal situation and have a Plan B in case complications arise. Have enough money saved for a hospital stay for both Mom and Baby. If things go smoothly, just add it to Junior’s college fund.

Postpartum Care After a Home Birth

Most doulas and midwives include some form of postpartum support and care in their packages. Your specific agreement may vary, but it’s fairly standard to offer at least one postpartum checkup. (Babies should see a pediatrician for their post-birth care.) 

Those with postpartum depression or psychosis must seek mental health treatment from a source other than their doula or midwife unless they’re also qualified therapists. That treatment may include talk therapy, medication, or a combination of the two.

You may also wish to seek the advice of a lactation consultant. Most midwives and doulas are trained to help, but a board-certified lactation consultant may provide further assistance if you need it. A home visit can be around $200 or more per hour, depending on your location. 

Insurance may cover some of these costs, but you can also get free online assistance at La Leche League. 

The U.S. Department of Agriculture also offers WIC breastfeeding support. Online resources are freely available to anyone, though you must qualify for the Special Supplemental Nutrition Program for Women, Infants, and Children to get personalized support. Your local health department may have resources as well.


Hospital Birth Cost Factors

Hospital births are often more expensive than home births, but that may not necessarily be true. In general, insurance covers hospital births more thoroughly than home births, meaning a home birth could lead to higher out-of-pocket costs. 

But a hospital birth costs considerably more than a home birth unless your insurance covers the majority. Know what your insurance pays for and what it doesn’t. 

Hospital Birth Insurance Coverage 

Under the Affordable Care Act (ACA), pregnancy, maternity, and newborn care are essential benefits that qualified health plans must cover. That said, if you’re a dependent on a parent’s or guardian’s policy, coverage may vary, so look into that sooner than later.

Note that its status as an essential benefit doesn’t prevent insurers from charging copays, coinsurance, or deductibles, so that doesn’t necessarily mean insurance covers the full cost.

But if you’re tempted by a home birth only for the cost savings, your insurance could drop the amount for a hospital birth to a very comparable number. So check into your coverage and do the math.

Some policies cover prenatal care at a higher level than others. Additionally, high-risk pregnancies require a greater level of care and could cost more, even with insurance. But you should likely opt for a hospital birth anyway.  

Whatever type of insurance coverage you have, know how much your deductible is, the length of hospital stay covered, and what doctors and hospitals are in your network to achieve maximum coverage. 

Additionally, if you require prenatal tests your insurance doesn’t cover, be mindful that you may incur those costs and can ask your doctor how much they are. For example, not all plans cover genetic testing.

Fortunately, there’s a cap on how much you can pay out of pocket on all medical care each year. On the most affordable Bronze level ACA insurance plans, the maximum individual out-of-pocket cost in 2022 is $8,700 for in-network medical services for an individual ($17,400 for a family). The max gets lower as you buy more expensive plans.

However, your pregnancy will last around nine months, meaning you could easily straddle two plan years, making the maximum overall individual out-of-pocket potential on the lowest plan $17,400. So that’s another factor to consider.

If you don’t have health coverage through an employer or your spouse, go to Healthcare.gov to see if you qualify for a special marketplace enrollment period based on a qualifying life event, such as losing your employer-sponsored health benefits or changes of state of residence.

While pregnancy is not a qualifying life event, it may give you access to programs like Medicaid or the Children’s Health Insurance Program (commonly known as CHIP). And even if you only qualify for open enrollment toward the end of your pregnancy, it can still save you significant cash.

Hospital Birth Prenatal Care Options 

The Kaiser Family Foundation says prenatal care totals an average of about $2,000, including about 12 doctor’s visits at $100 to $200 each if you don’t have ACA-compliant health insurance.

Hospitals also often provide free childbirth and infant care classes, so take advantage of those opportunities, especially if you’re a first-time parent. 

Your obstetrician will recommend prenatal vitamins and other preventative strategies to ensure your and the baby’s health throughout the pregnancy. The vitamins cost the same as they would for a home birth at around $21 to $130 for the whole pregnancy unless your doctor prescribes something special. 

When charged separately, ultrasounds range in cost from an average of $319 in New Jersey to $2,295 in Florida, according to a 2021 survey by Hospital Pricing Specialists. The national average cash price for an ultrasound came out to $745, so research prices in your area carefully.

General office visits to your obstetrician during pregnancy run about $207 if out-of-network or uninsured and $105 if insured and in-network, according to Fair Health Consumer. 

Prenatal care packages at hospitals and birthing centers typically detail how many visits and ultrasounds they include and what types of additional care they offer, which can save you money on those costs. But if you have insurance, ensure your plan covers a package before you buy it.

Hospital Birth Labor & Delivery Costs

Despite the cost, there are advantages to a hospital birth. It allows you to have an epidural, even if you initially planned against it. Epidurals will put the cost of a vaginal birth toward the upper range of any uninsured rate estimates. 

At the hospital, you can choose a cesarean delivery if it becomes medically necessary (even a certified nurse-midwife cannot legally perform a C-section). 

And that’s important because the type of delivery you have can also influence the cost. For example, health care cost transparency advocate Fair Health Consumer states that the national average charge for a vaginal delivery is $12,290. The national average charge for a C-section is $16,907. (That’s as of 2018.)

But those are just averages. How much it truly costs varies widely based on where you live and what services you want or need. 

For example, Fair Health Consumer puts the average uninsured cost of a vaginal delivery with pre- and post-delivery care in New York City’s priciest Manhattan zip code at between $12,380 and $24,666, depending on the specific care you need. But in Boise, Idaho, it’s only $4,180 to $16,269.

Note that those numbers don’t include prenatal or newborn care, which Fair Health Consumer shows comes in at several hundred (potentially close to $1,000) dollars per day, assuming there are no complications.

The Fair Health Consumer site can give you a ballpark idea of how much you’ll pay if you search based on your specific location.

Skin-to-skin contact is another aspect of the birth experience that might incur a charge. Although it may seem silly, after a surgical birth, the mother may be unable to safely hold her baby, making it necessary to have an additional nurse on hand to assist her.

Most hospitals allow parents and babies to have skin-to-skin contact as a matter of routine, but it never hurts to ask. It’s unclear what the average cost is, but the charge that went viral was $40. 

Postpartum Care After a Hospital Birth

If you’ve chosen a hospital birth, you should have plenty of help in the realm of postpartum care. Most hospital birthing packages include at least one follow-up visit soon after the baby is born. You should take the baby to a pediatrician for their follow-ups, which is an entirely separate charge.

If you experience a high-stress birth, such as having emergency surgery, you will need greater care in the following days and weeks. It may be as simple as family members assisting you after the cesarean procedure so you don’t overexert yourself. But it could be something more costly. 

Even if the delivery went smoothly, your OB-GYN will screen you for potential post-birth issues, such as postpartum depression. Postpartum depression could lead to serious expenses. Insurance should cover much of the cost of treatment, but if you’re uninsured, the rates can rack up fast.

In most areas of the country, one session with a psychologist runs between $100 and $200. It’ll cost even more if you need to see a psychiatrist (a medical doctor who can diagnose and treat mental disorders and prescribe medication). Rates per session are similar to a psychologist’s, but an initial visit could be $300 to $500.

Postpartum care may also include physical therapy and pelvic rehabilitation to help restore pelvic floor muscles. The cost for these can vary by location, but expect to pay between $150 and $400 per 45- to 90-minute session.

Many mothers also seek lactation assistance. It can save money in the long run if your baby breastfeeds instead of needing formula, so the investment in a consultation (around $200 per hour) can be well worth it. 

But you might get plenty of lactation help through your hospital as well. Some offer one or more free sessions initially and quite reasonable follow-up visits. For example, Baptist Health of Lexington, Kentucky, offers one free lactation consultation and follow-up visits for $25. 

And you have the same free or low-cost options as you would for a home birth, including the La Leche League, WIC breastfeeding support, or your local health department. 


The Verdict: Should You Choose Home Birth or Hospital Birth?

Overall, home birth costs are typically lower than those of hospital births. But the decision-making process isn’t as simple as looking at the numbers. 

It doesn’t help when you consider that hospitals negotiate rates based on factors like a patient’s insurance, whether you pay in cash, or whether you’re out of network. It’s tough to know the “official” cost of childbirth.

But there are things you can consider to help you make the decision.

A Home Birth Makes Financial Sense If…

Finances shouldn’t be the only reason you choose a home birth. But they can play a significant role in your decision. A home birth makes financial sense if:

  • You Need to Save Money. Home births are often cheaper. But if possible, don’t allow money to be the sole deciding factor in your birth plan. You must also consider your and your baby’s health and safety and your personal preferences. 
  • You Don’t Have Any Health Risk Factors. If you don’t have underlying risk factors like obesity or diabetes that could put you or your baby in danger, a home birth is less likely to result in emergency hospital expenses. 
  • You Have a Solid Backup Plan. Even if you don’t have risk factors, you need to prepare for an emergency hospital trip. That means setting up an emergency fund. If you don’t use it, you can spend it on the baby or set up a college fund.
  • You Live Near a Hospital. Don’t plan for a home birth unless you can get to a hospital quickly if something goes wrong during delivery. Emergency care will probably be more expensive than a hospital package, especially if you have to be air-lifted.
  • You Have a Trusted Midwife and Amazing Support Team. A doula or midwife with solid credentials (ideally a certified nurse-midwife) can save you money by providing similar care for less money, working with (not against) your medical team, and calling for medical intervention as early as necessary.
  • Your Insurance Covers Home Births. If your insurance covers home births, crunch the numbers to determine how much it can save you. While home births are already cheaper than hospital births, insurance can make it even cheaper.
  • You Don’t Have Insurance. If you’re uninsured, a home birth can save you a ton if you’re healthy. But it’s still a gamble. Complications could land you in the hospital anyway. It may be better to see if you qualify for open enrollment or wait until you do to try to become pregnant.

A Hospital Birth Makes Financial Sense If…

There are some circumstances in which a hospital birth is the best choice. In fact, medical professionals overwhelmingly recommend hospital births. Regardless of the cost, you should have your baby in a hospital or birthing center in the following situations. 

  • You Prefer the Greatest Level of Access to Medical Care. Opting for a hospital birth means having licensed OB-GYNs available on-site and top treatment and surgical options. Many things can impact labor and delivery, and the hospital can provide access to a C-section and pain medication as needed.   
  • Your Insurance Has Better Hospital Birth Coverage. Insurance can make hospital birth competitive with home birth. And you can always have a midwife or doula with you in the delivery room. 
  • You Have Contraindications to Home Births. If you have risk factors like diabetes or obesity, are carrying multiples, have had a prior cesarean delivery, or there are any issues with the fetus, plan a hospital birth. Home birth won’t save you money if you have to go to the hospital anyway, and it’s safer to be there from the beginning.

Both Make Financial Sense If…

Both home and hospital birth can be a high-quality childbirth experience as long as you have top-notch care. Choose the one that makes the most sense to you in these situations.  

  • You Have a High Income. If your household income is high enough that the cost difference between a home and hospital birth doesn’t matter, go with your preference. 
  • Cost Is Equal in Both Situations. Some people will find that the financial cost of using a midwife to facilitate a home birth is quite comparable to that of a hospital birth. If the cost is similar for both options, go with your personal preference. 
  • You Want the Best of Both Worlds. A hybrid approach in which you do much of the laboring process at home and then move to the hospital as labor progresses may lessen the amount of time spent in the hospital since early labor can be quite a long ordeal. 

Final Word

The choice between home birth and hospital birth isn’t purely a financial issue. 

A home birth has other distinct advantages: the potential for greater freedom in choosing your birth plan, a more intimate experience, and a more comfortable environment in which to bring your baby into the world. 

If you’re underinsured and worried about the costs of a hospital birth, in some situations, a home birth can be a safe alternative, especially if you’re healthy and build your emergency fund to cover unexpected hospital expenses. 

On the other hand, hospital births are safer, and infant mortality is much lower. You have access to more advanced care and licensed physicians, which can bring immense peace of mind during what can be a very uncertain and emotional few days. And insurance coverage can help lower hospital costs, even if you need a C-section.

Overall, the decision is an important and personal one. Examine your insurance coverage to help you evaluate the options and choose the right birth plan for your family.

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Kate Underwood is a former high school French and English teacher who has turned her obsession with personal finance into a career. Her work is featured at Money Crashers and elsewhere on the web, covering side hustles, debt payoff, investing strategies, and more. She loves making finance more accessible to everyone. In her free time, she loves to hike and hang out with her husband and kids.

Source: moneycrashers.com