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Apache is functioning normally

June 3, 2023 by Brett Tams

When it comes to renting an apartment, understanding the different types of leases available is essential for both tenants and landlords. A lease agreement serves as a legally binding contract that outlines the terms and conditions of the rental arrangement. While the most common lease is the standard one-year lease, there are other types of leases that offer different durations and flexibility.

From month-to-month leases for those seeking short-term arrangements to fixed-term leases for individuals looking for a longer commitment, exploring the various lease options allows both landlords and tenants to find an agreement that best suits their needs. We’re covering the four different types of leases for apartments, providing insights into their benefits and considerations and enabling you to make an informed decision when entering into a rental agreement.

Fixed term lease

A fixed-term lease, also known as a lease for a specific term, is a type of rental agreement that establishes a period during which the renter agrees to occupy the rental property. Typically, fixed-term leases last for one year, but they can also range from several months to several years, depending on the agreement between the landlord and the tenant.

One of the key features of a fixed-term lease is its stability and predictability. Both the tenant and the landlord enter into a contract agreement that outlines the start and end dates of the lease, as well as any terms and conditions that the renter has to abide by. This provides a sense of security for both parties, as they know the duration of the lease and can plan accordingly or resign when their lease is up.

Ideal renter type: students, stable-income renters and families.

Month-to-month lease

A month-to-month lease is a type of rental arrangement that operates on a short-term basis without a fixed end date. Unlike a fixed-term lease, which has a specific duration, a month-to-month lease automatically renews on a monthly basis until either the tenant or the landlord provides proper notice to terminate the agreement.

One of the key advantages of a month-to-month lease is its flexibility. Renters have the freedom to continue renting the property on a month-to-month basis without being locked into a long-term commitment. This flexibility is particularly beneficial for individuals who may have uncertain or changing plans.

Ideal renter type: renters with jobs that relocate, students and renters who need flexibility and renters who want to test out a living area.

Joint lease

A joint lease, also known as a co-tenancy or shared lease, is a type of rental agreement in which two or more individuals sign the lease together. In a joint lease, all tenants are equally responsible for the obligations and terms outlined in the lease agreement.

One of the primary advantages of a joint lease is that it allows roommates to share the responsibility of renting a property. This is commonly seen among roommates or friends who wish to live together and split the rent and other expenses. By signing a joint lease, all tenants are liable, meaning that each tenant is individually responsible for the full rent payment and any other terms outlined in the lease. If one tenant fails to fulfill their obligations, the other roommates are responsible for covering the shortfall.

Ideal renter type: couples, close friends, relatives and students who want to live with others.

Sublease

A sublease, also known as a sublet, is an arrangement in which a tenant rents out all or part of their leased property to another individual. In this arrangement, the original tenant becomes the sublessor, while the new occupant becomes the sublessee. The sublessee pays rent directly to the sublessor, who then forwards that payment to the original landlord.

Subleasing is useful for certain situations. For example, if a tenant needs to relocate temporarily but doesn’t want to break their lease, they can find someone else to take over the remaining lease term.

Before entering into a sublease, it’s important to review the original lease agreement with the landlord. Some leases prohibit subleasing without the landlord’s consent, while others allow it under certain conditions. If the original lease permits subleasing, the tenant must typically seek the landlord’s approval before proceeding.

Ideal renter type: renters who get relocated, renters studying abroad or moving for an internship.

To lease or not to lease

Understanding the different types of apartment leases is essential to determine the right fit for you as a renter. By considering factors such as lifestyle, financial situation and future plans, renters can make informed decisions about the most suitable lease type for their specific circumstances. Regardless of the lease type chosen, clear communication, attention to detail and mutual understanding between landlords and tenants are key to fostering a positive renting experience.Ready to sign one of these types of leases in your dream apartment? Start here!

Source: apartmentguide.com

Posted in: Extra Income Tagged: About, All, apartment, Apartment Living, apartment tips, apartments, before, Benefits, best, clear, communication, couples, decision, decisions, dream, expenses, experience, Features, Financial Wize, FinancialWize, fixed, freedom, future, in, Income, Insights, jobs, landlord, landlords, lease, Leases, Lifestyle, Live, Living, Main, Make, month-to-month lease, More, Moving, needs, new, offer, one year, or, Original, Other, parties, Permits, plan, plans, property, ready, relocate, Rent, rent payment, rental, rental property, renter, renters, renting, renting an apartment, Review, right, roommates, security, short, stable, students, studying, tenant, tips, under

Apache is functioning normally

June 1, 2023 by Brett Tams

As the housing market improves, apartment communities are looking for new ways to attract renters – which means improvements to apartments around the country could be coming soon.

According to a survey of 6,800 property managers conducted by Apartment Guide, 76 percent of those polled believe they need to give their properties a facelift if they want to keep renters. And to know where best to invest their dollars, landlords are turning to residents for advice – meaning online ratings and reviews provide important feedback not just for prospective tenants, but for property managers as well.

Several of the apartment communities featured on Apartment Guide include a forum where residents can provide feedback. The site has topped 67,000 ratings and reviews and is growing all the time.

Want to learn more about the ratings and reviews service on Apartment Guide? Check out feedback from certified residents of apartments all over the country. Properties are rated on a five-point scale, and reviews are certified to make sure the writer is an actual resident of the community and the content is appropriate.

Among the most important features renters look for when searching for a new apartment, according to the survey: Square footage, storage space, ideal floor plans, pools and fitness centers, updated kitchen appliances, and the ability to pay rent online.

Among the other findings in the Apartment Guide survey:

  • Communities are increasingly turning to Facebook, Twitter and other social media channels to keep the lines of communication open with residents.
  • More and more communities are making their listings available for mobile, so prospective renters can search for the perfect apartment from their smartphones or tablets.

What else can renters expect to see from apartments in the future? We’ve got some ideas:

What sorts of improvements would you like to see in apartments?

Photo credit: Opera Tower, Miami, FL

Posted in: Home Loans Guide Tagged: About, actual, advice, All, apartment, Apartment Living, apartment tips, apartment-community, apartments, appliances, best, communication, country, Credit, facebook, Featured, Features, Financial Wize, FinancialWize, fitness, fl, floor, floor plans, future, guide, Housing, Housing market, ideas, improvements, in, Invest, kitchen, kitchen appliances, landlords, Learn, Listings, Living, Make, making, market, Media, Miami, mobile, More, new, new apartment, or, Other, percent, plans, property, property managers, ratings, Rent, renters, Reviews, search, searching, social, Social Media, space, square, square footage, storage, survey, time, tips, Twitter

Apache is functioning normally

May 30, 2023 by Brett Tams

In some rental markets, apartment hunting can be as competitive as a job search. In fact, modern, savvy apartment seekers often visit apartments as prepared as if they’re on a job interview. If your apartment search lies in a highly-competitive rental market, like New York City, you may want to employ a few clever approaches to help secure your tenancy. Here are some tactics to help you nab your first choice apartment and seal the deal on the spot!

Dress for the apartment you want

Remember the old saying “dress for the job you want?” It applies to your apartment search, as well.

If your first-choice apartment is in a swanky high-rise building, then ditch the Saturday sweats and dress up for an in-person visit. A variation of the same rule applies if you are hoping for a hip pad in an up-and-coming neighborhood. Skinny jeans, a flannel shirt, and nerd-chic glasses might help your future landlord visualize you living there. Within reason, do what it takes to look like you are the perfect fit for the new space!

Tips to Help You Nab Your First-Choice ApartmentOver-prepare

Most folks who land great jobs do their homework, carefully studying the company they are interviewing with. Borrow this best practice to convince a property manager that you’re the right person.

Come prepared with knowledge about the community. Use search engines like Apartment Guide as a resource to study the amenities and features the community offers, then let the leasing agent know how much you value those options. You can also use sites like Yelp to learn more about the neighborhood and rave about how much you love restaurant X and coffee shop Y. Community managers may well appreciate your knowledge – and compliments!

You can also borrow this job search tip: bring a cover letter to introduce yourself. This will get a property manager’s attention and help them remember you after your initial tour.

Think like a networker

Once you’ve made a positive first impression, you might dig a little deeper to make a personal connection with the landlord. If the decision comes down to two renters with similarly positive credentials, the landlord might choose the one he feels most comfortable relating with.

Think like a networker. As in business networking, you should ask questions and then really listen. Keep your ears open for commonalities with the community manager. You might be from the same hometown, have attended the same college, or share the same favorite restaurants. Develop a rapport with the property manager by paying attention to and highlighting these details.

Follow up with a friendly thank-you

Best behaviors for job hunting – and apartment hunting – include a proper “thank you.” Once you’ve nailed the interview, send a note to thank a landlord or apartment community manager for their time, perhaps mentioning specific things you like about the apartment. Be sincere, and let them know it’s your first choice.

Because time is of the essence in apartment searches, email might be your best form of communication, though it never hurts to drop a handwritten note in the mail. (Even if the note arrives after you’ve signed the lease, your community manager will be glad she chose you!)

Remember your rental reputation

Of course, all of these strategies rely on the basis that you are prepared to be an excellent resident. Keep in mind you must also meet any legal apartment community requirements, including perhaps passing a credit check, to be the best candidate for an apartment that is in demand. You may be asked for referrals from former landlords, as well.

If you’re confident, prepared and sincere, however, you’ll likely have a much better shot at nabbing your favorite apartment on the first try!

Photo credits: Shutterstock / auremar, Robert Kneschke

Posted in: Apartment Hunting, Home Loans Guide Tagged: About, agent, All, Amenities, apartment, Apartment Hunting, Apartment Living, apartment search, apartment tips, apartment-community, apartments, Appreciate, ask, best, Borrow, building, business, choice, city, coffee, College, communication, company, Credit, credit check, credits, decision, Features, Financial Wize, FinancialWize, first impression, friendly, future, glasses, great, guide, hunting, in, interview, job, job hunting, Job Search, jobs, Land, landlord, landlords, Learn, lease, leasing, Legal, Living, Make, market, markets, modern, More, networking, new, new york, new york city, offers, or, Personal, property, questions, referrals, rental, rental market, renters, restaurant, restaurants, right, rise, search, Sites, space, Strategies, studying, The Neighborhood, time, tips, tour, value, will

Apache is functioning normally

May 30, 2023 by Brett Tams

If you can make a strategic decision about the time of year to search, choosing the right month could save you a few headaches and even a few dollars. Though the ideal time to rent an apartment varies according to a number of factors, here are a few details to consider.

Be realistic about the impact

While all of these can have an impact on the cost of your apartment, there’s nothing that’s going to work miracles for you here. You’re most likely to get a difference of about 5% between the peak and low season. It’s not nothing, but you’re not going to find yourself with an apartment in Manhattan for $1000 a month. It’s going to help, just calibrate your expectations appropriately.

The best moving season

The busiest season for moves happens between May and September. This makes sense when you consider that summer time is when kids get out of school, college students graduate, and the weather turns nice for outdoor activities like moving.

All of these factors make summer an ideal time for choice, but not for price. Demand is at is peak, so you’ll be best off financially waiting for the winter. The holiday season leaves a lot of people with little energy or money, so fewer renters are looking for apartments. Since an empty apartment makes no money, you can probably find landlords willing to trade lower rent for filling the apartment immediately during the winter. You can also get a good deal by signing a longer or shorter than normal lease that puts the unit back on the market in the summer, during peak moving times.

More apartment hunting articles for you:
How to Find the Best Apartment for YouHow to Choose Your Ideal NeighborhoodHow to Get Started with Your Apartment Search

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Best time of the month for apartment hunting

So, you’re already looking for an apartment in the winter, between November and March but you think you can do better than just the month. Just when in the month is the best time to look for an apartment?

Most leases expire at the end of the month, so you’re going to have the most going on the market right at the end of the month or beginning of the next. Since you have to give notice 30 days in advance, listings going up will be available the next month, so if you want the most choice, look right about a month before you have to move.

But what if you’re interested in saving money? This is where you play into desperation and look in the middle of the month. The units that are still available in the middle of the month either have been or are at risk of sitting vacant for a while. Like looking for apartments in the winter, you might be able to get a better deal if property managers are scrambling to fill the unit and you’re willing to move in immediately.

The best time of day

Want to get really specific? Start looking at listings between 9 and 10 AM local time. This is when the business day is just getting started, so any new listings should be going up first thing in the morning.

Different cities have different peak times

The trends above are generally true, but depending on where you’re moving, there may be different trends. For example, if you’re moving to a college town or city with a significant student population, the best time to look is right after school starts in September, but you might not be able to move into a unit until the end of the school year in April.

Whatever you do, timing is everything. There are better times than others to rent an apartment, and finding the right timing can help you find the perfect place or save a little money.

Related: Change of Address: Who to Tell!

Photo by Melissa Askew on Unsplash

Posted in: Apartment Hunting, Home Loans Guide Tagged: About, Activities, All, apartment, Apartment Hunting, Apartment Living, apartment search, apartment tips, apartments, at risk, before, best, business, change of address, choice, Cities, city, College, college students, cost, decision, energy, expectations, Financial Wize, FinancialWize, get started, Getting Started, good, holiday, holiday season, How To, hunting, impact, in, kids, landlords, lease, Leases, Listings, Living, Local, low, LOWER, Make, Manhattan, market, money, More, Move, Moving, new, new listings, or, outdoor, place, play, price, property, property managers, Rent, renters, right, risk, save, Saving, saving money, School, search, september, student, students, summer, time, timing, tips, town, trends, weather, when to move, will, winter, work

Apache is functioning normally

May 30, 2023 by Brett Tams

Office real estate investments trusts are trading at their lowest level since 2009 as the trend toward remote work leaves desks empty and economic pressures tighten corporate budgets.

The S&P Composite 1500 Office REITs index is down 27% in 2023, plunging to its worst reading since July 22, 2009. Office landlords comprise just 6% of the REIT sector, which explains why the broader S&P Composite Equity REITs index is down just 5.2% year-to-date and the S&P 500 Real Estate sector has dropped 4.5%. Offices are what’s weighing on the group.

“There’s two ways to lose money: You can own a boat, or you can own an office building,” Piper Sandler analyst Alexander Goldfarb said. “At least with the boat you can take your friends out on a sunset cruise.”

While the stress on the office sector may not be new, the shift to working from home has exacerbated the problem. However, much of the damage could already be priced into the stocks after this latest selloff, analysts said. 

In addition, fears about commercial real estate have added to the woes of regional bank stocks that typically fund local projects like strip malls and small office buildings. The sector has been pressured since the collapse of Silicon Valley Bank in March sparked industrywide turmoil. Now some investors fear that its exposure to office weakness could be the next shoe to drop. 

However, those worries may be overblown. 

“There’s probably going to be some heartburn in the bank space and probably some charge-offs,” said Ben Gerlinger, an analyst at Hovde Group. “But I think a lot of smaller and community regional banks are well-positioned.”

Quality Counts

What’s more, the outlook for office landlords could improve as companies encourage workers to return to their desks and restrict remote work policies. 

“We’re starting to see some of that reversal,” RBC Capital Markets analyst Michael Carroll said. “You’re seeing the first steps of people starting to reutilize their office spaces when they weren’t just a few years ago.”

The age and quality of each building will be a key differentiator in which offices succeed over the long term and which don’t. Newer office buildings with modern amenities will likely benefit the most as companies seek out spaces that will entice workers back into the office.

And of course, the financial makeup of each office landlord is key. Industrial and senior housing landlords could prove to be potential bright spots due to their healthy fundamentals and strong cash flow generation, according to Carroll. 

Similarly, Piper Sandler’s Goldfarb recently upgraded Douglas Emmett Inc. to overweight because of its small tenant focus and lower cost of leasing. On the opposite end of the spectrum, he slapped an underweight rating on New York-based Vornado Realty Trust due to its struggling balance sheet and development exposure around Manhattan’s Penn Station expansion project. 

So identifying winners and losers among office REITs remains a stock-picker’s game. But in the end, the damage may not turn out to be as bad as investors’ angst.

“There are a lot headwinds out there,” Goldfarb said. “But when you really look into it, the fear is much bigger than reality.” 

Source: nationalmortgagenews.com

Posted in: Real Estate, Refinance, Renting Tagged: 2, 2023, About, age, Amenities, balance, balance sheet, Bank, bank stocks, banks, ben, budgets, building, Capital markets, Commercial, Commercial mortgages, Commercial Real Estate, companies, cost, Development, equity, estate, Financial Wize, FinancialWize, fund, healthy, home, Housing, in, index, industrial, investments, investors, landlord, landlords, leasing, Local, low, LOWER, makeup, Manhattan, markets, modern, money, More, new, new york, office, office buildings, office real estate, office spaces, Offices, or, overweight, policies, project, projects, quality, Real Estate, real estate investments, reit, REITs, return, s&p, S&P 500, sector, Silicon Valley, silicon valley bank, space, stock, stocks, stress, tenant, trading, trend, trust, trusts, underweight, weighing, will, work, workers, working, working from home

Apache is functioning normally

May 27, 2023 by Brett Tams
By Evlin DuBose · Wednesday, 24 May 2023
· 8 min read


Fact Checked

Advertiser disclosure

Mortgage experts answering questions about home loans

Look, we’ve all had a moment wondering something bonkers, bizarre, random – you name it. And nothing can be more confusing than the wide world of property and home loans. 

So let’s look at some of the silliest and awkwardly-phrased mortgage questions asked on Google, seriously answered by an expert writer.

How home loan works

Want buy house. Not enough money. What do? Ask bank nicely. Bank let you borrow money. If it think you good for it. Then you buy house. Or unit. Pay bank back. It take long time. You give bank extra money, too. This called interest. That how home loan works.

Other stuff too. Less important. 

Is home loan same as mortgage

Sort of? Mostly? Yes. Ish. A home loan is the financial product banks and lenders offer. Your mortgage is a home loan that you are currently paying off. 

However, finance writers will often use terms like “home loan borrowers” and “mortgage borrowers” interchangeably, since when you’re making repayments, a home loan and mortgage are functionally similar. 

So yes, a home loan is basically the same as a mortgage. (Unless you’re pedantic and write about them for a living).

Woman learning about home loan on laptop collage

Is home loan interest tax deductible in Australia

Yes! If you’re a property investor in Australia, you can claim the interest from your home loan on your taxes. In fact, landlords get a whole bunch of tax perks. Lucky them! 

(Just make sure you talk to a tax expert before filing). 

How is home loan interest calculated

Good question! Home loan interest is calculated and compounded daily. Your monthly mortgage repayment therefore incorporates interest from the last 30 – 31 days.

This is actually why making more frequent home loan repayments can sometimes save you interest in the long run. By shortening the number of days included in your repayment (fourteen instead of thirty) while keeping your principal in consistent chunks, you can pay off your mortgage faster with less interest over time.

However, this hack will depend on how your lender calculates a fortnightly vs. monthly payment size. If your fortnightly repayments pay less than half of the principal amount you would in a monthly repayment, it actually slows down how fast you pay off your mortgage. (Math involved, but that’s how the sausage sizzles).

Does home loan include GST

GST, or the “Goods and Services Tax”, is a government charge applied to most transactions in Australia. From lattes to Uber, most things you buy will have GST built into the final price. Financial services and bank products, however, do not include GST – therefore, neither will your home loan.

But: this doesn’t mean buying a home is tax-free. When you first purchase a property, you may have to pay stamp duty or an annual land tax. Later when you sell your home, you may also have to pay capital gains tax. 

Always seek help from a tax professional and financial advisor.

Man struggling under credit card collage

Home loan spouse has bad credit

Ruh-roh. Spouse buy too many things on Amazon. Maybe get screwed with BNPL. Whoops. Work on credit score together. (But don’t control their money – that financial abuse). 

Also. Could apply for home loan as just you? Think about joint tenancy vs. tenancy in common. Talk to financial planner.

Remember: team work make dream work.

Do home loans look at TransUnion or Equifax

TransUnion and Equifax are credit score reporting bodies, along with Experian and Illion. Whenever you apply for a home loan, lenders will run a credit check to assess your risk as a borrower. If your credit score isn’t good, they may reject your application. 

Equifax, Experian, and Illion are the main credit bureaus in Australia, so your lender may check with one, two, or all of them when assessing your borrowing power. 

Before applying for a home loan, send for a free credit report from one or more of these agencies so that you can see your score for yourself. Not happy with your results? Give your application a boost by improving your credit score. 

Can mortgage be paid with credit card

NO! Technically, yes – but don’t do this! BAD IDEA. A credit card may buy things in the short term (and have more money on it than your debit card), but you’ll still have to pay it back with interest – and the interest rates on credit cards are much, much steeper than those on home loans.

By using a credit card to make mortgage repayments, you’re doubling down on the interest you’re paying overall. This could also potentially hurt your credit score and ability to refinance, because if you miss either a mortgage payment or a credit card payment, it goes down on your credit report. 

If you’re really struggling with your mortgage repayments, talk to your lender. You may be able to negotiate a lower interest rate and work out a repayment plan that works best for your situation. 

Recent law changes also mean that it’s far, far better for your credit score to declare financial hardship than skip payments altogether. You actually get rewarded for asking for help. Huzzah!

Just whatever you do: don’t put your home loan on credit. 

Can I pay an auction deposit with a credit card

NOOOO! If you’re paying a housing deposit at auction, do not put it on your credit card. Not only will vendors not accept this as a valid form of payment, but putting a deposit on your credit card defeats the whole purpose of a deposit.

A deposit is a down payment: your home loan will cover the remaining cost of the property. Your deposit is therefore the only part of your home loan you don’t pay interest on (besides money in your offset account). By using your credit card, you create interest on the only interest-free part of your loan – and at a much steeper rate than mortgage interest. 

Bad idea. BAD. No. Don’t put your home loan on credit. 

Collage of a man walking up his home loan repayment timeline arrow.

Is mortgage a liability or an asset

A financial liability is something that drains your finances, such as debt, while an asset is something that improves or holds your wealth. A mortgage is therefore a liability, because it is a kind of debt. 

However, the property you own, i.e. your equity, is an asset, since it can provide a source of wealth and security. Your equity can be unlocked to do many things for you, like refinance your mortgage or finance another property. 

Does mortgage cover stamp duty

Stamp duty is a government charge for transferring property from one owner to another. For those who have to pay it, stamp duty can cost tens of thousands of dollars.

Your mortgage, however, won’t cover stamp duty, so when budgeting to buy a home, you’ll need to factor it in as an extra cost, on top of any conveyancing, agent, settlement, and valuation fees. 

Does mortgage mean death grip

Fun fact: sort of! The word “mortgage” comes from the Old French mort + gage, meaning “death” and “pledge”. In mediaeval times, land that was mortgaged was fully pledged to the lender until the borrower fully paid it off or was dead. 

So, same as today – basically.

Whose property am I on

Depends, but the safest answer is, “Whoever owns it.” Not sure who owns it? Follow this handy flowchart.

Have interest rates gone up

Yes – due to high inflation, the Reserve Bank of Australia has tightened its monetary policy and made 3.75% worth of increases to the official cash rate since May 2022, which in turn drives up the interest rates on home loans, term deposits, and savings accounts.

Do interest rates rise in a recession

No, interest rates do not rise during a recession. In fact, the opposite is true. Whenever the economy enters a recession, the central bank will cut interest rates to encourage people to spend money.

As a result, home loan interest rates will fall, making financing a property cheaper, while savings accounts and term deposits won’t be as attractive, so people will be less inclined to park their money. 

Interest rates rise whenever there is high inflation, and high inflation is not the same thing as a recession. High inflation (usually) means demand is out of control and consumers are driving up prices, thus raising the cost of living.

To discourage spending, the central bank will raise interest rates, therefore making savings accounts a better place to stash cash while mortgage repayments become more expensive. 

Who owns the Reserve Bank of Australia

Australia.

Can you bank with the Reserve Bank of Australia

No. The Reserve Bank of Australia, also known as the RBA, is a central bank in charge of monitoring the Australian economy and setting Australia’s monetary policy. Unless you are the Australian government, the RBA cannot manage your finances.

If you are in the market for a new bank, however, you can compare bank accounts using our hub page.

Will housing prices drop

While the housing market may experience temporary dips and falls, studies show that long-term, property prices will always rise. This is primarily due to inflation, but increased competition doesn’t help, either.

Hurray…

How buy first home

Try government help. Move away from big city. Maybe buy unit instead? Cry. But no give up.

In all seriousness, first home buying can be a daunting task, but there are still plenty of ways to break into the housing market – even with the odds stacked against you.

You’ll need to navigate the hurdle of rising interest rates, outrageous prices, and the cost of living, but with careful planning and research, these can all be managed. 

For more information on how to get started, head over to our first home buyer hub.

LVR what? LMI who? Learn home loan terms with our handy glossary.

Compare low-interest rate offers in the table below.

Compare low interest rate home loans

– last updated 27 May 2023




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    Principal & Interest
    Availability
    Owner Occupier
    Repayment options
    Weekly, Fortnightly, Monthly
    Special Offers
    –
  • ubank logo
    Own Home Loan

    Owner Occupier, Principal & Interest, LVR <60%

    interest rate
    comparison rate

    Initial monthly repayment


    5.54% p.a. variable

    5.79% p.a.

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    Compare

    Compare

    Details
    Close

    Own Home Loan

    Competitive variable rate. Multiple offset accounts available. Borrowers can also make extra repayments. Redraw facility available. Simple online application process. 40% deposit required.

    interest rate
    5.54% p.a. variable
    comparison rate
    5.79% p.a.
    interest rate
    5.54% p.a. variable
    comparison rate
    5.79% p.a.
    Upfront fees
    $250
    Ongoing fees
    $250.00 yearly
    Discharge Fee
    $300.00
    Extra repayments
    yes – free
    Redraw facility
    yes – free
    Offset account
    yes
    Maximum loan to value ratio
    60.00%
    minimum borrowing amount
    –
    maximum borrowing amount
    –
    type of mortgage
    Variable
    Repayment types
    Principal & Interest
    Availability
    Owner Occupier
    Repayment options
    Weekly, Fortnightly, Monthly
    Special Offers
    –
  • Macquarie logo
    Offset Home Loan

    Package, Owner Occupier, LVR<60%, Principal & Interest

    interest rate
    comparison rate

    Initial monthly repayment


    5.54% p.a. variable

    5.79% p.a.

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

    Compare

    Compare

    Details
    Close

    Offset Home Loan

    Ability to open up to 10 offset accounts per loan account. Fast online application. Linked Debit Mastercard® with fee-free access at ATMs across Australia. Package a credit card with your home loan and the annual card fee will be waived (T&Cs apply). 40% deposit required.

    interest rate
    5.54% p.a. variable
    comparison rate
    5.79% p.a.
    interest rate
    5.54% p.a. variable
    comparison rate
    5.79% p.a.
    Upfront fees
    $350
    Ongoing fees
    $248.00 yearly
    Discharge Fee
    $400.00
    Extra repayments
    yes – free
    Redraw facility
    yes – free
    Offset account
    yes
    Maximum loan to value ratio
    60.00%
    minimum borrowing amount
    $150,000
    maximum borrowing amount
    $10,000,000
    type of mortgage
    Variable
    Repayment types
    Principal & Interest
    Availability
    Owner Occupier
    Repayment options
    Monthly
    Special Offers
    –
  • loans.com.au logo
    Solar Home Loan

    Owner Occupier, Principal & Interest, LVR <90%

    interest rate
    comparison rate

    Initial monthly repayment


    5.39% p.a.variable for 60 months and then 6.23% p.a. variable

    5.98% p.a.

    Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.

    Compare

    Compare

    Details
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    Solar Home Loan

    Enjoy a lower interest rate for the first 5 years if you have solar panels or plan to get them. Get up to a 30 year loan term. Unlimited additional repayments. Option offset sub-account. No ongoing fees to pay. Free unlimited redraws.

    interest rate
    5.39% p.a.variable for 60 months and then 6.23% p.a. variable
    comparison rate
    5.98% p.a.
    interest rate
    5.39% p.a.variable for 60 months and then 6.23% p.a. variable
    comparison rate
    5.98% p.a.
    Upfront fees
    $530
    Ongoing fees
    $0.00
    Discharge Fee
    $300.00
    Extra repayments
    yes – free
    Redraw facility
    yes – free
    Offset account
    yes
    Maximum loan to value ratio
    90.00%
    minimum borrowing amount
    $50,000
    maximum borrowing amount
    $1,500,000
    type of mortgage
    Variable
    Repayment types
    Principal & Interest
    Availability
    Owner Occupier
    Repayment options
    Weekly, Fortnightly, Monthly
    Special Offers
    –

*
WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

**
Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

^See information about the Mozo Experts Choice Home Loan Awards

Mozo provides general product information. We don’t consider your personal objectives, financial situation or needs and we aren’t recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don’t cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.

Source: mozo.com.au

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Apache is functioning normally

May 27, 2023 by Brett Tams

When I worked in management consulting, one of my responsibilities was to help my company figure out ways to make money while we slept. As a consulting business, our revenue stream came from selling the hours of the people who worked at our company. But to grow our margins, we knew we had to scale our time. This is where I first learned about passive income — the Holy Grail of the business world.

Now that I’m in my 30s, I think a lot about how to direct my active streams of income into passive income opportunities. Here are some things I’ve learned about active and passive income in my wealth-building journey.

What’s Ahead:

What Is Active Income?

Active income is earned by trading your time for money. Most people at the beginning of their careers are focused solely on earning active income to make a living.

What Is Passive Income?

Passive income is earned from income-producing assets. Someone who has passive income is not trading their time for money. Instead, the assets they own produce income without much involvement from the owner of the asset.

With the rise of financial influencers and the FIRE movement, finding ways to earn passive income has become a popular topic in the personal finance community.

Is Any Income Truly ‘Passive’?

The idea of earning truly passive income sounds amazing, right? But what’s often not discussed about passive income is that unless you inherit passive income-producing assets, creating passive income streams actually requires a substantial amount of active work.

Famous American entrepreneur Gary Vaynerchuk has gone as far as to say that truly passive income doesn’t exist outside of passive public market investing and rental income.

I tend to agree with Gary that the term ‘passive’ income is something of a misnomer. Creating passive income is never truly passive; there is no free lunch when it comes to financial mobility!

But thinking of income in active and passive terms might nonetheless have some benefits for those who are assessing their current financial status and crafting their wealth-building strategy. For that reason, I’ll break down the broad differences between active and passive income streams, as well as the most prominent ways to generate active or passive income.

Pros & Cons of Active Income

Pros

  • Allows you to develop a specific skill or expertise consistently
  • May provide social interaction and camaraderie associated with a traditional worksite

Cons

  • Trades time for money
  • Takes time away from doing other things
  • Cannot scale income potential beyond time constraints
  • Can be taxed at high rates

Pros & Cons of Passive Income

Pros

  • Generates money while sleeping, vacationing, etc.
  • Frees up more time for recreational activities
  • Subject to potential tax deductions
  • Scales income potential beyond time constraints
  • Does not require physical presence at a work site

Cons

  • Often requires you to create active income first
  • Usually harder to create than active income

Types of Active Income

Salary and Wages

The most basic and obvious form of active income is the salary that you earn from a typical job. A salary is a fixed amount received for working a regular schedule like 9 to 5, Monday through Friday. While a salary is a consistent form of active income, it can be taken away at a moment’s notice due to layoffs or downsizing. Most people earn their living from this type of income.

Bonuses and Commissions

Bonuses and commissions are other forms of active income. This type of income is not fixed and can vary dramatically based on the type of work performed. Many jobs can have a bonus or commission element added to a base salary, while other jobs can be 100% commission based.

Real estate agents, commercial real estate sales professionals, and other types of salespeople tend to fall into this income category. 100% commission-based jobs tend to have higher earning potential compared to salaried positions. However, they are also highly competitive, and their profitability is subject to ups and downs based on the economy, seasonality, and other factors.

Read more: How to Become a Real Estate Agent

Consulting and Freelancing

Freelancing and consulting fees are other types of active income that can either make up 100% of one’s income or serve as a side hustle. Those with valuable skills in high demand are often able to build side businesses, selling their time for specific short-term projects or long-term contracts. As of August 2021, there are 57 million freelancers working in the U.S., with 10 million more considering freelancing.

Looking ahead, more and more businesses are noting they’re willing to hire freelancers to support their mission, growth, and revenue.

Being a freelancer or consultant requires an entrepreneurial spirit, as this type of work can be very inconsistent and requires building a strong brand/reputation. Some of the most popular types of freelance work include graphic design, software development, copywriting, and photography.

Read more: 35+ Side Hustle Ideas

Equity Compensation

Equity compensation is a type of bonus that is given out at public or private companies to senior individuals or particularly valuable employees. Different types of equity compensation include straight shares, stock options, and Restricted Stock Units (RSUs).

It’s not uncommon for equity compensation to make up most of an individual’s income. For example, in 2020, 85% of an average CEO’s income was stock-related compensation.

Capital Gains

Buying and selling certain types of assets, like stocks and real estate, can generate capital gains if the asset’s sale price was higher than its original purchase price. For example, you might buy shares in a company while its stock price is low and then sell those shares later after the stock’s price has increased. The difference between the price you paid and the price you sold at is a capital gain.

Generating capital gains as a means of consistent income requires a significant amount of work, expertise, and risk-taking. Capital gains also have different tax treatments depending on how and when they are generated.

Read more: Claiming Capital Gains and Losses

Renting Out Property

Listing your property on sites like Airbnb can help you earn active income. While listing your property for rent may not require a significant investment of time and energy upfront, it’s not a set-it-and-forget-it income source.

Actively managing your listings, communicating with renters, and maintaining your property certainly requires active effort (unless you have a property manager).

Old Goods and Furniture Flipping

I’ve seen lots of people recently on TikTok and Instagram building side businesses by taking old or broken furniture, refurbishing it, and selling it for a profit. If you are handy and have an eye for design, this can be a great way of making active income given the low startup costs.

In addition to making money from selling the furniture, after you’ve built an audience you can sign brand partners and feature their products on your social media pages to generate even more income. Lastly, this type of business is a great way to help recycle old products that would have otherwise been thrown out.

Types of Passive Income

Interest and Dividends

Interest from your savings can be generated from high-yield savings accounts or by investing in CDs or bonds.

Dividends are paid to the shareholders of public companies. Not all companies pay dividends and the amount of dividends paid varies significantly. While earning dividends is passive income, choosing the right investments that generate dividends is a very active and time-consuming process.

In my experience, those looking to earn dividends can typically expect returns of 1–5%.

Rental Income

You can earn passive income from real estate by investing in rental properties, commercial real estate, public real estate investment trusts, or real estate crowdfunding platforms. Income-generating real estate can also provide landlords with tax benefits by deducting depreciation costs, property management expenses, insurance, and other expenses.

But there’s always an active element of real estate investing, no matter what type of real estate you invest in. This includes property management, dealing with tenants, managing relationships with lenders or investors, ensuring upkeep, or simply picking the right real estate projects to invest in. Some forms of real estate investing can become so time consuming that many personal finance experts question if real estate investing can be considered passive at all.

Read more: How to Invest in Real Estate

Peer-to-Peer (P2P) Lending

Peer-to-peer lending has attracted investors looking for an alternative to persistently low interest rates on savings accounts and bond yields. With P2P loans, investors make unsecured personal loans to others and can earn high returns.

While P2P lending has exploded in popularity (check out Lending Club and Prosper), these investments are very risky. The loans are often not secured against collateral, are not FDIC insured, and money invested in P2P lending can be difficult to access in times of economic stress.

Digital Product, Online Course, or Community Development

Creating digital products, courses, or online communities can be one of the best ways to earn passive income if you can package your skills and knowledge and sell it to a group of customers. In today’s digital age, the costs of creating a course, digital product, or community have never been lower, and all you really need is a computer and some creativity.

While there are lots of instances of everyday people earning millions on their digital products, don’t forget that getting to that point likely required a lot of work. Keeping these types of products relevant and up to date after launch also requires time, effort, and attention, not to mention having to market your product and keep up community engagement.

If you are interested in starting something like this up, platforms like Thinkific, Teachable, and Patreon are all options to explore.

YouTube/TikTok Ad Revenue

I became fascinated by the prospect of earning money on YouTube after coming across financial influencer Graham Stephan. Earning money on YouTube or Tik Tok generally comes down to building your channel’s audience and monetizing content through ads or affiliate marketing links. Once your presence meets a critical mass, every video you create has the potential to become an income-generating asset.

On the surface, making money on YouTube seems amazing, but again, it takes a lot of work and dedication to get there. For example, Graham has mentioned having to post videos at least three times a week for several years to get traction. And it often takes audiences of tens of thousands or hundreds of thousands of followers to earn any money.

But there’s lots of potential to earn sizable passive income from YouTube after you build an audience. The average YouTuber can make $3 to $5 per 1,000 video views and the top YouTubers can make millions annually.

Final Thoughts

Passive income can be a great way to earn more while working a regular 9 to 5, or it could fully replace your current stream(s) of active income entirely.

When it comes to building real wealth, however, the discussion around active vs. passive income is more nuanced.

According to a five-year study of 233 wealthy individuals, a common thread between them was that self-made millionaires generated income from multiple sources. 65% of them had three streams of income, 45% had four streams of income, and 29% had five or more streams of income.

These figures suggest that when it comes to building wealth, it’s not just a question of prioritizing passive vs. active income. Rather, it’s about generating multiple streams of income and scaling your time.

Personally, I have four streams of income:

  1. The income I make from my 9 to 5
  2. Investment capital gains
  3. Dividends
  4. Freelancing work

You can leave it to your own creativity and aspirations to find what constellation of passive and active income streams works best for you. But remember, whether you are looking to create passive or active income, there is no free lunch, and any source of income that ultimately becomes passive will likely start as a highly active pursuit.

Read More:

Source: moneyunder30.com

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Apache is functioning normally

May 27, 2023 by Brett Tams

Two rent-related lawsuits were lodged by separate property companies against Atlanta-based Equity Prime Mortgage LLC, adding to the outstanding number of litigation battles the multi-channel lender has to resolve, including one filed by a NASCAR team in late-December.

The lease lawsuits were lodged in Florida and Missouri two months apart by landlords accusing the mortgage company of not paying rent for office spaces.

A suit filed in Florida by TGT Maitland, LLC in April accuses the lender of “failing and refusing to pay the rent and other amounts owed under the lease” for an office space it has been renting since 2019. The sum owed as of March 6 totals close to $30,000.

A month prior, litigation was filed on behalf of Weldon Centre, LLC, a company that owns buildings in Missouri. The company filed a rent and possession lawsuit, a method commonly used by landlords when tenants do not pay rent. 

Details regarding the lawsuit are sparse, but as of April 3 the case has been marked as resolved. The attorney representing Weldon Centre would not provide further information about the case.

According to the lawsuit filed in Florida, EPM, which has headquarters in Atlanta, has been renting the office owned by TGT Maitland since May 2019. In September 2022 the mortgage shop renewed the lease for an additional three years. The rent currently due by EPM totals at least three months, with the monthly rate of the property coming in at $8,817, documents show.

The landlord of the property is seeking damages in excess of $50,000 to cover the lease, attorney’s fees and court costs. TGT Maitland is also holding onto a $9 thousand security deposit from EPM, which it will apply to the sum owed, the lawsuit said.

EPM did not immediately respond to a request for comment.

The back-to-back lawsuits come after Jesse Iwuji Motorsports announced that it was suing EPM for $4.1 million in a Florida federal court, claiming the firm stopped making six-figure monthly payments last September for commitments including stock car signage.

Per the lawsuit, an EPM executive told the team it wouldn’t make further sponsorship payments because of a “margin call” and was suffering financially from mortgage rate hikes. 

“Though JIM sympathized with EPM’s predicament and proposed measures in good faith in order to benefit EPM and continue the parties’ relationship, EPM again reiterated in communications with JIM that the effect of the ‘margin call’ was the reason why future payments would not be made,” said Darren Heitner, attorney at Heitner Legal and JIM’s legal representation.

The mortgage shop fired back with a countersuit in February denying accusations of having financial issues and placed the blame of the sponsorship breakdown on the racing team’s own alleged admission of liability. Negotiations between both parties are still ongoing.

EPM has been in the mortgage business since 2008 and is currently licensed in 50 states, with 75 loan officers on board. The company originated $1.9 billion in residential loans between Jan. 1, 2022 and Oct. 31, 2022, according to data from by S&P Global.

Source: nationalmortgagenews.com

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Apache is functioning normally

May 26, 2023 by Brett Tams

How to take a good rental property listing photo

“Invest during a pandemic? Are you crazy?”

That’s a reasonable question. Why would anyone want to invest in a volatile market and in the midst of economic uncertainty?

But recessions create opportunities. Yes, it’s terrible that millions have lost jobs and suffered huge portfolio losses, but the unfortunate reality is recessions happen. Like it or not, this is our current situation. By looking at the market and asking “what opportunities can I find?,” we contribute to the recovery.

We contribute to the recovery in all types of investments: stocks, real estate, side hustles.

When we buy stocks, we infuse capital into companies that we believe in and/or into the market as a whole.

When we buy, renovate and rent properties, we create jobs for contractors, agents and property managers and we offer our tenants a safe, comfortable and well-maintained home.

When we start a side hustle, we build products or services that thrill our clients and create jobs for our team.

When we invest, we participate in the recovery. Recessions are an unfortunate fact of life, but they carry a silver lining. And for newbie investors in particular, recessions can open the door.

Unfortunately, during times of uncertainty, many people surrender to their fear of investing. They sit in cash until it’s too late.

To be clear, I’m not talking about people who don’t have the capital to invest. If someone is financially unstable — if they lack an adequate emergency fund, for example, or if they’re buried in high-interest credit card debt — then they should be applauded for focusing on the fundamentals first. Build the foundation; everything else rests on that.

But many financially stable people will sit on excess piles of cash.

I get it. Investing is scary during a recession.

It’s normal to feel scared of buying index funds, only to watch them drop the next day. It’s natural to feel scared to start a side hustle, when you know this is a tough time for small businesses. It’s normal to feel scared about buying a rental property; what if your tenants lose their jobs?

But by sitting on too much cash, you miss the opportunity to pick up undervalued deals.

You also miss the chance to start building momentum, so that when the economy starts rebounding, you’re already established. You’ve started the side hustle. You own the rental property. You’re not scrambling to get started after the recovery is underway; your projects are in place.

You might not have enough cash to buy cheap assets at this moment. That’s okay. Focus on the fundamentals (like building an emergency fund) and don’t worry.

If you’re fortunate enough to be able to invest, though, don’t sit out this opportunity due to fear.


We discussed stocks at length in this podcast episode, and we talked broadly about how to finish 2020 financially stronger than you started in this episode.

In this article, we’ll focus on real estate.

Should you invest in rentals during a pandemic? Might we see another housing crash, 2008-style? Is this a good time to buy? To sell? Let’s explore.

“Is the real estate market going to crash again?”

Have you heard of the availability heuristic?

It’s defined as “the tendency to overestimate the likelihood of events with greater ‘availability’ in memory.”

We overvalue examples that can easily come to mind, while we undervalue examples that are harder to imagine or recall.

If something happened recently or if something is emotionally charged, then it’ll easily come to mind. And if it easily comes to mind, we overestimate the likelihood that it’ll happen again.

Prior to the pandemic, the 2008 housing crash was the most recent recession. It comes to mind quickly: it was recent and suuuuper emotionally charged.

And so it’s natural — it’s logically flawed, but natural — to assume that this current recession will resemble the last one, to overestimate the likelihood of another housing crash.

But the factors that led to the 2008 recession (subprime lending, speculative building, shady credit-default swaps) are nothing like the factors that led to the 2020 economic collapse (a deadly virus).

The Great Recession was created by weakness in the housing market. The chain of events in 2008 wasn’t: “a recession struck, therefore home prices collapsed.” It was the opposite: “home prices collapsed, therefore recession struck.”

If you started investing before the 2002 dot-com burst, or if you were already an adult during the 1987 market crash, you’ve experienced bear markets that didn’t coincide with a housing crash. But if you’re under 40, the Great Recession was the first major recession in your adult life.

If that’s your situation, then it’s especially tempting to associate recessions with real estate crashes. After all, as a millennial, 100 percent of the recessions of your adult life — 1 out of 1!! — have been tied to a massive real estate crash.

But that was a dozen years ago. The underlying economic factors are different today.

There may or may not be a temporary slight dip in housing prices. (I doubt it, but it’s possible.) If that happens, clickbait headlines will refer to this minor dip as a “crash,” because that’s eminently more clickable. Don’t be fooled by the phrasing.

Study the housing market. Read the price-per-square-foot declines. Look at the average days-on-market of homes for sale. Scan for the number of new mortgage loan originations. This data will tell you far more than any screaming headline.

“What if my tenants can’t pay rent?”

Let’s look at statistics:

In a normal market, around 20 percent of tenants are late in paying their rent, according to data from the National Multifamily Housing Council, which tracks 11.5 million apartment units nationwide.

In April 2020, that number increased from 20 percent to 31 percent. That’s not as bad as many landlords feared.

  • In normal conditions, 80 percent of tenants pay rent on time, and 20 percent are late.
  • In pandemic conditions, 69 percent of tenants pay rent on time, and 31 percent are late.

But wait! It gets better.

The NMHC surveyed apartment managers again one week later. They found a huge improvement: 84 percent of apartment households paid rent by April 12th.

Tenants might not be able to pay rent on the 1st of the month. But the overwhelming majority — 84 percent — were able to pay after a delay of less than two weeks.

As far as the data shows so far, worries that tenants won’t be able to pay rent have largely not come to pass. Most tenants are still able to pay rent; they just need extra time.

(The NMHC noted that a huge number of apartment managers volunteered to waive late fees or offer flexible payment plans.)

That said, millions of people have been helped by a combination of stimulus checks, enhanced unemployment benefits (which currently provides an extra $600 per week in addition to normal state unemployment benefits), or payroll protection if either they or their employer qualifies for Paycheck Protection Program funds. Will these programs get renewed or extended? What will happen if they don’t? There are many lingering questions, and the future remains to be seen.

The simple truth is that nobody can accurately predict the future. We can look at data about our current situation, and as of now, we know that 84 percent of tenants (out of 11.5 million household units) paid rent within two weeks of its due date. But we do not know if or how that number will change in the future. Variables that cannot be predicted — such as the speed of recovery, the level of government intervention — will play a major role in shaping these answers. We don’t know how those variables will take shape.

The greatest risk is assuming that we know the future. Beware of certainty. Those who pretend to know the future are clinging to security at the expense of honesty and accuracy. Don’t listen to any economic or market projections that are expressed with too much confidence. We don’t have a crystal ball. Nobody knows what the future holds. The wise ones recognize this and accept it.

We cannot state what will happen. We can only state what IS happening. And from that, we make preparations for what is and what might be.

“What risks should I be wary of?”

Of course, there are serious risks ahead. We do not know:

  1. … how long the pandemic and global shutdown will continue.
  2. … how long such a large portion of the population will remain unemployed.
  3. … how many employees have had their hours reduced or accepted a temporary paycut, and how this will reverberate throughout the economy.
  4. … how long the recovery will take.
  5. … whether or not there will be a tragic second wave, or third wave, which triggers an unavoidable second or third shutdown.

How can you approach smart real estate investing in this context?

Here are a few Do’s and Don’ts:

Don’t avoid investing. The people who made that mistake during the Great Recession — those who avoided making new investments from 2009-2012 — missed out on massive, opportunity-of-a-lifetime recovery gains.

Do thoroughly analyze any new rental investment that you’re eyeing. Run a variety of “what if” scenarios on a spreadsheet, crunching the numbers with different assumptions.

What if occupancy rates fell by an additional 10 percent? What if you reduced the rent by 20 percent for the next six months? How would this affect your returns?

In our course, Your First Rental Property, we provide robust, detailed spreadsheets for heavy number-crunching.

We teach our students that the cliché thrown around by other investors — who tell you to “calculate the return” — is too simplistic.

You’re not calculating “the” return; you’re calculating a range of possible returns.

You’re not stubbornly insisting that a given rental property will have an 8 percent cap rate. You’re calculating a range of cap rates in best-case, worst-case and middle-case scenarios.

Unfortunately, there are sellers who will advertise properties as having an “X” cap rate, and there are investors who take that information as a fixed number. That’s baloney.

Properties don’t have a single fixed cap rate; they have a range of cap rates, and we teach our students how to assess this range before they commit to a six-figure investment.

Don’t over-leverage. You don’t need to borrow every penny you qualify to receive.

Ignore the real estate investors who are fixated on cash-on-cash return, a popular formula that inherently rewards overleveraging.

Instead, focus on an investing strategy that prioritizes the property’s cap rate (essentially its dividend stream). This is the investment philosophy and strategy that we teach in our course.

Do maintain strong cash reserves. We teach our students to keep a minimum of three months’ gross rent, which translates to six months of operating expenses.

Don’t jump in without a specific, carefully-thought-out written plan. Before you start investing in rental properties, write your personal investor statement.

Your written investment statement should articulate how many properties you want to purchase, the speed or rate of acquisition, the type of financing you want to use, your ideal debt-to-equity ratio or leverage maximum, the type of neighborhood you want to target, the age and condition of properties you want to purchase, and more.

We provide a fill-in-the-blank template to guide you through this exercise in our course.

Do prepare a variety of ways that you can accommodate tenants who are financially struggling. Here are some examples:

Offer an incentive: 
Offer your tenants one month of free rent — which they can use immediately — if they extend their lease by an additional year.

This is a win-win scenario. You’re spared from the costs of a turnover and vacancy. You pass these savings directly to your tenant.

Waive late fees: 
If your tenant is waiting on unemployment benefits, they may not be able to pay rent on the 1st of the month. That’s fine; they’ll have the money once their benefits arrive.

Offer to waive late fees, under the condition that they stay communicative.

You want to avoid a tenant ‘ghosting’ you, screening and dodging calls from you or your property manager.

You can avert this situation by (1) letting them know you’re flexible and accommodating, and (2) telling them you’ll waive late fees as long as they send you frequent updates about their situation, like a quick text message or email, every two to three days.

Set specific and measurable communication criteria, such as: “Please text me with an update at least once every three days, even if your text is as simple as ‘hey I’m still waiting on my benefits to start’.”

Spread the payments:
Another option? If your tenant is waiting for their unemployment benefits to arrive, offer to spread next months’ payment across the rest of their lease.

Let’s say their rent is $800 per month, and they have 9 more months remaining on their lease. In this example, they would pay $0 next month, and their rent would rise by $100 per month for the remaining 8 months.


The Bottom Line: Recessions are tragic, but they also carry the hope and promise of a recovery. If you have money to invest, don’t let fear hold you back. Invest in the market, start a side hustle, or invest in rental properties. Don’t let another year or two slip by, and then scramble to get a foothold after the recovery is well underway.


Our flagship course, Your First Rental Property, opens for enrollment again on Monday, November 30th.

Learn about the course in this video below, or check out this page for FAQs, testimonials, and your chance to join our VIP waitlist. When you join, you get a free 7-day crash course on the fundamentals of residential real estate investing.

If you’re interested in investing in rental properties and want an A-to-Z guide of everything you need to know, learn all the details here.

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Source: affordanything.com

Posted in: Paying Off Debts, Real Estate, Renting Tagged: 2, About, acquisition, age, agents, All, apartment, assets, assumptions, average, ball, bear markets, before, Benefits, best, Borrow, build, building, Buy, Buying, chance, clear, communication, companies, confidence, contractors, crash, Credit, credit card, Credit Card Debt, data, Deals, Debt, dividend, Economy, Emergency, Emergency Fund, employer, equity, estate, events, exercise, expense, expenses, Fees, Financial Wize, FinancialWize, financing, first rental, fixed, formula, foundation, Free, free rent, fund, funds, future, get started, good, government, great, guide, hold, home, home prices, homes, homes for sale, hours, household, Housing, housing crash, Housing market, housing prices, How To, improvement, in, index, index funds, interest, Invest, invest in real estate, Investing, Investing Strategy, investment, investments, Investor, investors, jobs, jump, landlords, late fees, Learn, lease, lending, leverage, Life, loan, Make, making, market, markets, millennial, mistake, money, More, Mortgage, mortgage loan, Multifamily, multifamily housing, National Multifamily Housing Council, natural, new, offer, opportunity, or, Originations, Other, pandemic, paycheck, payments, penny, percent, Personal, place, plan, plans, play, podcast, Popular, portfolio, price, Prices, PRIOR, products, programs, projects, property, property managers, protection, Purchase, questions, rate, Rates, Real Estate, Real Estate Investing, Real Estate Investors, real estate market, Recession, renovate, Rent, rental, rental properties, rental property, Rentals, Residential, residential real estate, return, returns, rewards, rise, risk, safe, sale, savings, second, security, Sell, sellers, shutdown, Side, Side Hustle, Side Hustles, simple, single, smart, spreadsheet, spreadsheets, square, stable, statistics, stimulus, stocks, students, Style, surrender, target, tenant, time, under, Unemployment, update, updates, Video, will, your first rental property

Apache is functioning normally

May 26, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

When it comes to your financial health, what you don’t know can cost you. Just like the annual physical with your doctor keeps your body’s health on track, knowing your financial vital signs can save you money and help you keep fiscally fit. Match your financial knowledge in the categories below to see where you can shape up!

Net Worth

Do you know what your net worth is? If the answer is no, you’re not alone: most Americans don’t! But knowing your net worth, the value of your assets (your savings and retirement accounts, your house, collectibles, your car) minus your total debts (including house payments and car payments) – is key to tracking your financial health. Knowing your net worth offers a clear picture of your financial state, showing you how you spend your money. Calculate your net worth regularly—ideally once a quarter—to identify areas where there’s room for improvement.

Mortgage Rate

According to a new Bankrate.com report, a whopping 35% of Americans don’t know their mortgage interest rate. How about you?  Rates have bounced around historical lows for years, yet many homeowners who could benefit from refinancing haven’t taken advantage of the potential savings because they were unaware of their current rate. With rates expected to rise from 4.2% to over 5% in 2015, now is the time to do some easy research and stop leaving thousands of dollars on the table.

Credit Score

Your credit score – a three-digit number that represents your credit risk with a number that ranges from about 300 to 850 – is looked at by everyone from lenders to landlords. The National Foundation for Credit Counseling recently found that 60% of adults hadn’t reviewed their credit score within the previous 12 months.  Big mistake, particularly if you’re in the market for a loan.  Why is this number so important? Score high (mid 700s) and you could save thousands of dollars in low interest rates. Score low (below 620) and when you apply for a loan you’ll be offered a higher rate, favorable terms or even worse, you may not be able to obtain financing at all. Want to know where you stand? You can get your score for free from any number of providers including Mint.com. If your score is low, work on improving it by making your payments on time (try Mint Bills to get reminders when bills are due, stay organized, and pay on the spot). Also, cut back on using credit cards; a good rule of thumb is to avoid using more than 10% of your available credit on any card.

Make Friends with Your Credit Report

Your credit report contains detailed information about your credit history including things like credit-card use, auto loans and debts that were sent for collection. For such important information, an alarming number of credit reports contain mistakes. In fact, an FTC study indicates that as many as 40 million Americans have a mistake on their credit report. Since fewer than one-in-five consumers check their reports, chances are most people don’t know about the errors. Yet if a mistake is serious, it can lower your credit score and possibly result in your being denied credit. Get a free copy of your credit report on AnnualCreditReport.com and review it carefully.

–Vera Gibbons, Mint Contributor and Personal Finance expert

This post was corrected on March 6, 2015.

Save more, spend smarter, and make your money go further

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