Should You Buy Or Rent A Home? This Secret Will Help You Decide

The buy versus rent debate is currently a hot topic when it comes to housing and personal finance.

Personally, I think too many people get too caught up in the numbers.

Yes, numbers are important, but there is something even more important. Buying or renting a home is a lifestyle choice in addition to a financial choice.

You shouldn’t make your decision on only one of these factors.

You must consider both.

Financial Decisions

Renting and buying a home are two totally different beasts when it comes to money. Renting offers a fair amount of financial certainty for your housing expenses.

You will know exactly how much your rent will be for the period of your lease. You won’t likely have to pay much else for your basic housing costs.

When you buy a home, your mortgage payment will stay close to the same if you have a fixed rate mortgage. Of course, it may increase or decrease based on changing real estate taxes and insurance rates.

Additionally, if you have a variable rate mortgage, the payment can change as interest rates change.

Utility expenses are another large cost that are associated with your housing. If you rent, you might luck out and have some of your utilities included in your rent. However, if you buy a home, you’re stuck with all of the utility bills in most cases.

The benefit of owning a home is the fact that you can make your home more efficient with regards to heating, cooling, electricity and water usage if it is a smart financial move.

As a renter, it wouldn’t make sense to make these improvements as they’d likely be cost prohibitive. They wouldn’t pay off before you had to move again.

Yard maintenance is sometimes covered in your rent as a renter and could potentially be included in homeowners association fees if you own a home.

However, this particular cost will vary widely depending on your specific situation regardless of whether you’re a renter or you buy your home.

Regular home maintenance is almost always paid for by your landlord if you’re renting. If you own your home, you need to make sure you can afford all of the maintenance that is necessary or your home could end up losing value quickly.

Once you take all of these factors into consideration, you should have a good idea if buying or renting will be cheaper on a monthly basis. If buying ends up cheaper, remember that you’ll have to include money for a down payment and closing costs as well.

Even with all of these financial considerations, you still need to consider the lifestyle choice you’d be making when you choose if you’ll rent or if you’ll buy a home.

Lifestyle Decisions

Unfortunately, the better financial decision doesn’t always make sense when you consider your lifestyle.

The secret that will help you make a sound decision about whether to buy or rent is matching your finances with your lifestyle. Owning and renting a home are two very different lifestyle decisions.

If your lifestyle doesn’t fit your choice, you could end up in a world of hurt, financially speaking.

The first lifestyle choice is the length of time you’ll live in a home. If you’re not sure where you’ll be in one year, let alone five years from now, then you’re most likely better off renting a home.

You can sign short leases and minimize the financial impact a mobile lifestyle would have on your wallet.

However, if you’re certain you’ll be in a particular area for decades, you might want to put down roots and avoid the costs of rent increases. After all, moving every couple of years sucks when your landlord doesn’t want to renew your lease.

If you hate yard work and performing maintenance tasks around the house, renting will definitely fit your lifestyle better. Since these things aren’t normally the responsibility of the renter, you’ll alleviate that stress on your life.

If you live for having the perfect yard, you probably would want to own the home so you don’t spend a ton of money fixing up a yard before the landlord decides not to renew your lease.

As you can see, deciding whether to own or rent a home isn’t a simple decision. It takes a lot of reflection on your situation to determine what is best for you. Don’t let others bully you into a situation you aren’t comfortable with. Do what’s best for you!

What do you think about the buy vs rent debate? Which side to you fall on, or do you run the numbers for every scenario?

Are Homeowners Associations Good Or Bad? It Depends!

Homeowners associations (HOAs) or Condominium Associations often have a bad image.

The first thought that normally pops in someone’s mind about HOAs are the strict neighborhoods that fine you for any tiny violation of the neighborhood covenants.

Why?

It seems everyone has a horror story from either themselves or a friend who had something not go their way.

But are HOAs really as bad as you always hear? Let’s explore!

Different Types of HOAs

Not all HOAs are the same. There are a wide variety of homeowners associations that offer a huge range of different services. You could have an HOA that simply makes sure that everyone follows the covenants that keep the neighborhood up to a certain standard.

Alternatively, you could have an HOA that offers everything under the sun including a clubhouse, golf course, pool, gym and they might even maintain all of the landscaping in the neighborhood.

Due to the wide variety of potential amenities, HOA fees can range from just a few bucks a month to hundreds or even thousands of dollars a month.

Some fees, especially in condo associations, even include utilities such as basic cable, internet, phone, electricity, water and trash. You’ll need to do the math yourself to figure out if the financial cost of an HOA fee is worth it to you.

HOAs Don’t Just Charge Money For Services

The sole value of an HOA isn’t in providing services at a charge. They enforce covenants that can help ensure that the homes and areas within the neighborhood or condo are kept up to a certain standard.

This can greatly increase the value of homes within a neighborhood when you eventually sell your home.

HOAs Can Be A Huge Pain

If you’ve decided that HOAs provide enough value for you financially, then you need to consider one of the biggest complaints about HOAs. A HOA has a set of covenants that everyone in that neighborhood must follow.

These covenants can restrict anything from what colors you’re allowed to paint your house to how you use your home and your yard.

They can regulate whether or not you can build a fence. If you can build a fence, they can regulate what materials you must use and what color it will be.

Your HOA can control where you park and how many cars you can park in your driveway. They can restrict you from being able to park boats, RVs or other recreational vehicles on your property where others can see them.

They can even require you to keep your trash can out of sight from the road!

Some people absolutely hate having someone else tell them what to do. Before you buy any home that has covenants and restrictions, be sure to read through all of the documents and fully understand them.

Once you buy, you’re bound to them and must follow the rules.

HOAs Can Be A Blessing In Disguise

HOAs aren’t all bad. While they restrict you from doing certain things, they also restrict your neighbors from doing the same things.

If you can’t stand living in a neighborhood with boats, RVs and trash cans in sight of the road, an HOA may be perfect for you! If you can’t stand bright orange and purple homes in your neighborhood you can find one that won’t allow crazy paint colors.

These restrictions create a certain level of uniformity that can increase home values if you don’t mind playing by the rules. That’s in addition to the benefits of the amenities!

Overall, if you can find an HOA that aligns with your values, I think they’re a great deal. Just make sure you’re ready to play by all of the rules in case you have a nit picky board that will blast you for every small violation.

What’s your stance on homeowners associations? Do you love them or hate them? Do you have a horror story or a great story about a condominium or homeowners association to share?

Top 4 Secrets To Help Sell Your Used Car For More Money

4 secrets for selling your used car for more moneyThere comes a time in most cars’ lives when their owner decides it is time to move on.

When most people make the decision to move on to a new (or new to them) car, they focus on the new car and completely ignore their old faithful car that they will soon be parting with.

That is a MAJOR mistake that can easily cost you thousands of dollars.

Don’t Forget About Your Old Car

When everyone is focusing on their new cars, they’ll likely just trade their old car in for anything that sounds reasonable.

Some people will even trade it in for less than the blue book trade-in price because they just want to get rid of it.

Car dealerships love this because it makes them lots of money. However, with a little bit of effort, and I mean just a little, you can keep this money for yourself. Sometimes it can be thousands of dollars for just a little bit of effort.

How To Get Maximum Value For Your Car

When you decide it is time to move on to your next car, you’re stuck with the way you’ve treated old car up until this point.

The car might be immaculate or your car might be in horrible shape. Either way, there are a few things you can do to get the most value from your car that you can.

Clean Your Car Up

My first tip is very key in getting the most money out of your old car. You should thoroughly clean both the outside and inside of your car.

Go as far as cleaning out the engine compartment and the trunk. Pretend you’re a detailer and clean out all of the little spots you’ve let get dirty over the past year.

When people see how clean your car is, it’ll be one less thing for them to use to negotiate against you on price.

Take Outstanding Pictures of What Matters

Now that your car is as spotless as it is going to get, take some amazing pictures of it. Don’t just take one or two pictures of the outside of the car. Take pictures of all of the highlights of the car and all of the things that matter most to car buyers.

I’d take a couple of pictures of the outside of the car and a couple pictures of the cabin in general.

Next, I’d make sure to get a picture of the odometer, any custom or higher end features, the rims and/or tires (if they’re nice) and anything else that will make someone want to buy your car.

Think like a car buyer, not a car seller.

Make An Awesome Listing Description

Now that you have the pictures ready, sit down in front of your computer and write an awesome listing for your car.

Make sure to list the model year, make, model, any options packages, odometer reading, any recent or major preventative maintenance performed and anything else that makes your car stand out.

Next, think about what questions you’d have if you were buying your old car. Make sure you answer all of these questions in the listing. This will save you time with phone calls and tire kickers.

When you have someone call they’ll hopefully be serious after all of the details you’ve already provided.

List Your Car For More Than What You Think You Can Get

Most people look up their car on Kelley Blue Book (KBB) to get a value for selling to a private party. They accept the KBB number as a gospel and list their car for that amount of money. BIG MISTAKE! You should never, ever do this.

You should go check KBB and see what they say the value is for a car in your condition, but instead of listing it at that price you should list it for more. People like to negotiate and this gives you room to lower your price to the KBB price, if necessary.

However, if you get a ton of responses for your ad, you might not need to lower the price at all. You can always lower your price on future postings, but you can’t very easily raise the price if you have a ton of interest because people would laugh at you.

Earning Extra Money On Your Car Sale Is Easy

If you take just a little bit of time, put effort into cleaning your car, take awesome descriptive pictures, make an awesome car sales description and research your price point, then selling your car yourself can earn you hundreds or thousands of dollars above the average used car trade-in.

Why wouldn’t you want to put that money in your pocket? You could use it to pay off debt, invest it for retirement or spend it on a fun vacation for the family. Trust me, a little bit of time and effort can make a big difference in the price when you’re selling your used car.

Have you ever sold one of your old cars yourself? Do you have any additional tips to share?

Photo by: The National Roads and Motorists’ Association Text added by: Lance Cothern

Consumer Reports Made Shopping For Appliances Easier

we bought consumer reports for appliancesMy wife and I have been shopping for kitchen appliances for a while now.

If you’ve never shopped for appliances before, it is super frustrating!

We decided to buy four separate appliances, a refrigerator, a dishwasher, a microwave and a range.

That means we didn’t have to just make one decision, we had to make four decisions!

There are so many options out to choose from and the reviews are all a mixed bag on the store websites.

Some people hate an appliance while others love the very same appliance. So how did we make a decision?

We Bought A Subscription To Consumer Reports

With so many opinions available online, it’s hard to tell who is simply complaining about making a bad decision versus those that have serious problems with an appliance.

Unfortunately, some people even manipulate reviews by maliciously posting false statements that are either amazing or awful to try to persuade potential buyers.

Luckily, Consumer Reports tests many kitchen appliances in an objective fashion and shares that knowledge with their subscribers.

I did some research and found out that Consumer Reports actually buys their appliances from the same place you or I would to ensure they get the same quality appliance a consumer would.

That’s right, Consumer Reports doesn’t get their appliances they test for free. They pay for them to ensure that they’re representative of every other appliance sold by that manufacturer. They don’t want special treatment.

After finding this out, we decided to spend $6.95 per month for a subscription to get access to their reviews and I’m so glad we did.

Just a quick note, the subscription auto renews so if you sign up, make sure to cancel if you are no longer using the service. We’ll be cancelling in a couple weeks after we’re done exploring information on any future purchases we may want to make.

What We Learned For Consumer Reports

The first thing we noticed after logging in is that Consumer Reports doesn’t have reviews on every single appliance model ever. However, you can use the reviews they have done to find some trends for certain brands or features offered on different appliances.

Before looking at Consumer Reports’ data, we assumed there would be one brand that has the highest reliability across all appliances.

We couldn’t be more wrong. While one brand might have the lowest rate of major problems for dishwashers, that same manufacturer may have the highest rate of major problems with refrigerators.

Those facts quickly made us realize we wouldn’t be buying a suite of appliances all from the same brand. This was huge because all of the major appliance sellers want you to buy all from the same manufacturer to get a package deal with a slightly better price.

If the appliances don’t work well, it doesn’t matter how much you pay for them so we decided we weren’t getting a package deal.

Next, we learned that price doesn’t equate to quality. Some of the higher rated appliances were some of the cheaper or mid-level priced appliances. This was huge because it saved us a ton of money and headache. We didn’t have to buy expensive appliances to get the performance we wanted.

Finally, we were able to decide on each individual appliance either based on the ratings of that specific appliance or a similar appliance from the same brand. We looked at the factors that mattered the most to us and made our decisions based on those factors.

Consumer Reports Probably Saved Us A Ton Of Headache And Money

If we simply made our decisions based on the marketing by the appliance selling companies and the appliance manufacturers, it is clear we would have made some awful choices. That’s why we always research major purchases in advance.

While our normal method of reading online reviews on the company websites that sell the products didn’t work, we found a more reliable way to decide what appliances to buy. Even though it cost us $6.95 to buy a one month Consumer Reports subscription, it was money well spent.

If you’re making a major purchase and you’re clueless on what to look for, seriously consider giving Consumer Reports a few of your hard earned dollars so they can do the research for you. It’s worth every penny.

Have you ever used Consumer Reports to make a purchase before? Did it make your life easier? Let me know your thoughts in the comments.

Photo by: nessman Text added by: Lance Cothern

Big Ticket Household Items You Shouldn’t Cheap Out On

Budgeting for household items can get expensive, especially if you're just moving into a new home. Specifically, there are four particular items you shouldn't cheap out on. Find out what they are.This post is by our former staff writer, Daisy.

Many personal finance buffs preach frugality, which is great. Frugality is an important part of a well-rounded financial individual.

However, frugality does not always mean buying the cheapest item; it means making the best financial decision for yourself when faced with a purchasing decision.

The cheapest item is rarely the best financial decision.

See, cheap items usually don’t last for very long, causing you to spend money on the same item in the future, much sooner than you would have to if you purchased a quality item.

Sure, a quality item may cost 200% more than the cheap item, but if the item is actually good quality, it will last longer. It will require fewer repairs, costing you less in the long run.

Some furniture items (ie bar stools) you can cheap out on and it will be fine. If you don’t use the furniture item on a regular basis, or if it’s more for a decorative purpose, Ikea is a great shopping option.

However, for your health and for your wallet, there are some major items that you should not be cheaping out on:

Your Mattress

Your mattress has a lot to do with your ability to fall and stay asleep. I know that sounds really obvious, but it’s surprising how few people realize that some of their sleeping issues have to do with their mattress.

Splurge on your mattress, because it has a direct relation to your quality of life. Also, a bad mattress that isn’t right for your spine can cause back issues, which can be costly in chiropractic and massage therapy fees.

The Couch

Gone are the days that people spent more of their time off the couch than on it. Even if you are a reasonably active person, it’s likely that you log at least a couple of hours of couch time every day.

Because you use your couch so often, it should be comfortable and supportive. If you buy a good quality couch, it’s likely that it will last you for a long time.

Computer Desk & Chair

If you spend a lot of time on your computer, which many of us do, it’s crucial to have a good ergonomic setup. Your desk should be the right height for your body while you are sitting. It also needs to have proper placement of a keyboard tray and mouse.

Your computer chair needs to be able to support sitting marathons and provide comfort and posture support.

Vacuum

When I first moved out on my own, I bought the cheapest vacuum I could find. I didn’t have much money because I was a college student and I needed a vacuum because the basement suite I lived in had carpet.

The vacuum did a terrible job of sucking up the dust in the carpet. It did make it look clean, so for the first few months I couldn’t figure out why I had such bad allergies. It wasn’t even hay fever season.

I went to my doctor time and time again to get allergy medication. At one point, she asked whether or not I had carpet, and if so, what I was doing to get rid of dust.

I informed her that I had a vacuum that I did use on a regular basis, but she told me that it might not be enough unless it was a pretty good vacuum. I borrowed my mom’s more expensive (and better quality) model and found that my allergies cleared up almost right away.

Don’t cheap out on your vacuum. There are some great quality models for a decent price, so just make sure you are doing your research. If you buy your vacuum online, make sure to use one step checkout to speed the process up.

Frugality isn’t always about buying the cheapest model of something. You can get ahead by buying a better quality model (which is not to say you can’t find it on sale).

What have you splurged on around the house that has been worth it? Do you have certain items you’re willing to pay more for in order to get better quality? Let me know in the comments below!

Photo by: livarea Text added by: Lance Cothern