Everywhere we turn it seems we are bombarded with the notion that buying a home is always preferable to renting. We hear statements like, “Young people need to build equity” or “Rent is just throwing money away” or “It is never better to rent than to own.” The key point to take from this is that any time you hear the words “always” or “never,” red flags should fly up and alarm bells should go off! Just remember, “never” is a very, very long time.
Making a Fair Comparison
In order to fairly evaluate the individual merits of owning a home versus renting, we must first place the cash flows required on equal footing, and then we can evaluate the future value of each option. For example, let’s say you want to buy a house that will require a monthly cash outlay of $1,000, which includes mortgage payment, basic fire insurance, principle mortgage insurance, neighborhood association dues, property taxes, basic maintenance, etc. The rental you are considering will cost you $500 per month, which includes rent and rental content insurance. To make a fair comparison, we would have to add an extra $500 in cash flow to the rental option, which we will invest into a stock index mutual fund returning 10% annually over the long term. If we estimate to live in the home for 10 years, we would next calculate what the value of the stock market investment would become, and then calculate the equity we will have built in the home, accounting for principle payments and price appreciation. The option with the largest total wins!
A racist letter has tenants terrified and the FBI is getting involved. A Virginia Beach landlord stands accused of making racist comments. A Neo-Nazi group is coming to the landlord’s defense by sending letters to the residents.
St. Catharines Coun. Joe Kushner - university professor and bar co-owner - has a real estate tip for you.
Don’t dabble in student housing.
“There is a large glut of student housing in south St. Catharines,” said the St. Andrew’s councillor at Monday night’s city council meeting, reporting on a recent meeting of the Brock University student housing liaison committee.
The number of vacant student houses continues to climb, agreed Brad Clarke, off-campus housing officer for Brock.
It is not big secret that there is one reason and one reason only that people become real estate investors, and that is because they want to get rich. Extremely rich. Fabulously wealthy. They want to be able to ride in limousines and drink champaign at giant parties with all of the right people. In short, they want t o live the lifestyle that they’ve always dreamed of.
Of course, in order to become extremely wealthy in the real estate business it is necessary first to purchase a property, then to make a profit on it. Sure everyone says that flipping properties is the way to go to make a profit in the real estate business. You buy a home for pennies on the dollar, fix it up and resell it for thousands more than you paid for it. You then take that money and reinvest in your next property, repeating the process over and over again.
Roommates can be both a blessing and a nightmare. On one hand, they can offer companionship and financial offloading, but on the other, they can be a social and financial nightmare. However, don’t fear, there are procedures you can follow to help abate the scenario where you have a bad roommate. Depending on the type of living arrangement you have with your roommate, you can either pronounce your situation as either painfully hopeless or just plain painful. Either way, resolving the situation, in most cases, is not going to be easy. There are essentially two cases, namely, the one where your roommate is not on your lease. For example, you are the sole signer on the lease and you effectively have a sublease agreement with your roommate. The other case is a bit more to your disadvantage, and that is the case where both of your names are on the lease. Starting with the case where you are the sole signer, you are now effectively playing the role of landlord. Note that in many places, a written contract may not even be necessary. Their simple presence in the property grants them an implied tenancy.
In a recent article I discussed your need to find and keep great contractors. But most landlords only rely on professional contractors for some maintenance and repair tasks. The reason, of course, is price. Why pay a contractor big money to do a job you could do yourself, or find an inexpensive handyman to take care of, or even leave to the tenants?
You must weigh at least three factors in deciding who will do a job. Those factors are cost, reliability, and quality. If you’re thinking about taking on the job yourself, consider time and something I’ll call “the fun factor” as well. The fun factor is the enjoyment you may get out of doing handyman jobs. In my next article, I’ll help you figure out where you should take these projects on.
Here’s how the different candidates to do work, other than yourself, typically grade on the performance factors.
Contractor - Worst on cost, but best on reliability and quality.
Handyman - Medium on all factors.
Tenant - Best on cost, but worst on reliability and quality.
Of course the actual results depend on your actual contractors, handymen, and tenants. For contractors in particular, however, quality and reliability should be absolutes. If your contractor isn’t the best in those areas, replace him.
Quick response and teamwork by both the Niagara Regional Police Service and Niagara College Officials are being credited in the peaceful ending to a potentially dangerous situation as a Niagara College student is arrested, armed with a weapon.
At 4:10 p.m. September 14, 2007 Niagara Regional Police received a call for assistance from Niagara College Security after a student reported that he saw a man get off a Welland Transit Bus with what appeared to be a handgun tucked into the waistband of his pants.
Acting Sergeant Simon Gichard and Constable Robert Kish arrived within minutes to the assistance call and immediately coordinated with Niagara College Security to initiate a lockdown of the Merritt Simcoe Complex, and a residence on the Niagara College Campus. Numerous units from both the uniform branch and the 3-district criminal investigations branch also responded to set up a security perimeter around the Merritt Simcoe Complex. An orderly, controlled evacuation was undertaken as students were safely removed from the building. As students evacuated the building, the suspect attempted to leave but was identified by officers and apprehended without incident. An unloaded weapon was found in his possession.
The Niagara Regional Police wish to inform the public of an increase of an old scam with a new twist. It is perpetrated via the Internet usually targeting Internet auction sites or domains that advertise items for sale or services available for rent. Recently a number of instances have emerged that target landlords offering rooms for rent to University or College students.
A landlord legitimately post rooms for rent and is contacted by a person wishing to rent the room. The potential buyer states they are the parent, guardian (or similar title) for a student that wishes to arrange for the room rental, someone that would pay the full-advertised price for the item.
A counterfeit or forged cheque is received by the victim for an amount far in excess of the agreed upon rent. The fraudulent buyer next explains the excess amount as an inconvenience and requests the victim to deposit the cheque to their bank account and wire the overpayment via Western Union back to an address provided by the buyer. The victim takes the cheque to his bank, deposits it to his account and wires the excess amount, minus the agreed upon price, to the address provided (usually a foreign Country).
The buyer next contacts the victim to inform them that the deal for the room rental has fallen through and requests the remaining money also be wired to the address provided. Afterwards the original issued cheque fails to clear through banking channels and is returned as a counterfeit item. The victim’s bank notifies him/her that the original cashier’s cheque was not negotiable. The bank provides the next surprise, by pursuing civil action against the victim for the entire amount wired from their account.
The public is reminded to exercise diligence when conducting financial transactions via the Internet and should question any transaction that meets similar circumstances.