Tag Archives: location

Acquiring a Domicile: How to Rent an Apartment

Most people have or will rent at some point in their life. What often comes up is concern about rising prices or lack of adequate amenities. These issues will always be a concern. However the following steps will help prepare you for a move into someone else’s rental.

1. Determine your Renting Criteria

As soon as you decide that you want to rent, you need to determine what you’re after. What kind of budget are you looking at? What square footage? What types of Amenities do you want? What are your needs verse what are your wants? In which location specifically does this rental need to be?

Answering these questions will give clarity, allowing you to start the next step…

2. Narrow Search to 10 Rentals

As soon as you’ve determined your renting criteria you will be ready to begin screening. Similar to how a landlord screens potential tenants, you will be screen potential landlords. Find ten places that most closely meet your criteria.

Some places you can find rentals include:

Pad Mapper, HotPads, Lovely, Trulia and Walkscore

3. Visit Your List and Come Prepared

With your list in mind you can begin visiting each one. To come prepared, bring a checkbook, wallet, or some means of payment in case they want to charge you for an application fee. Also bring proof of income such as a pay stub or other documentation. Lastly, you’re going to want a photo ID.

At this point you should be well on your way to both knowing which locations fit your needs, and entering yourself into the landlords application process. Assuming you meet the rental criteria, you will probably get one of your applications responded to within a week or to.

You’re on your way! I hope this helps you on your rental journey.

A Logical Approach to Getting into Debt

The largest expense most folks in the U.S. incur is a home. When buying a home most Americans choose to take out a home mortgage. So how do you go about buying a home? I’ll share that with you in the steps below.

To be honest, I have never purchased a home of my own, however, I plan to. These are the steps I will take in a couple years when buying my first place. I also will incorporate the experience and knowledge I’ve learned from my Father who was both a home builder, carpenter and owner multiple times during my teen years and still is today.

Place and Purpose

Where and why you want to purchase a home are some of the most fundamental questions. For example are you wanting to buy in San Fransisco, CA? In that case you’re probably okay with a price range of $300K-$400K+. Thinking about Lansing, MI? It’ll cost you around $75K-$250K. These ranges are drastically different so deciding on where you want to buy is the first step.

Then ask, why am I buying? Maybe you intend to “house hack” and move out a year later to turn it into a rental, or maybe you want a quiet family home in the country that you can live in for 30 years. Maybe you just want a place large enough to house your aging parents as well as your growing family? There are many reasons for buying.

With those two things in mind, your location and your reasons behind buying, you are ready for the next crucial step, Financing and Finances.

Financing and Finances

Financing and Finances are the most analytical and numbers-based part of purchasing a home. First look at your finances. How much house can you afford? How much home do you actually want or need for your situation? In which ways will a home limit or help you financially?

Financing a home is fairly straightforward and complex at the same time. One one hand all you have to do is go to a bank, get approved for a loan, and then pick a house to buy right? While this is certainly the gist of it, there are most considerations and steps involved.

For example how much downpayment are you putting down? This will determine whether or not you need an FHA loan or conventional loan. What interest rate will you most likely have? What kind of monthly payment will that mean and will you be able to afford it? This kind of ties back into the realm of Financial analysis.

Comparing, Choosing and Closing

In you first step you decided on what you wanted generally speaking and where you wanted to live. In the second step you got approved for a loan and made sure you knew how much you were willing to spend and if you could afford it. Now it’s time to find a place.

First you’re going to need a realtor. This real estate agent will be able to help you locate properties in the area you identified. As they show you properties you will get a feel for the characteristics that you like and the ones you don’t. You’ll ask questions like, “would I  be willing to pay more for a pool?” Or, “Should I pay less for no garage?”

After looking at enough properties you will decide upon one or two that suite you. Get you Realtor to put in offer and you may have to negotiate a little. After agreeing on a price and terms (which is often a long process) you will come to sign the contract. As the day of closing comes near you will have to be aware of the following closing costs:

Realtor Commission

Property Appraisal Fee

Due diligence costs

Attorney fees

Other closing costs

These closing costs and others will usually range between 5% to sometimes even 10%.

Next you’ll have to start moving in, which is a whole different process. But for now I hope I’ve helped you develop a plan for your own home buying.

Renting Vs Buying – 4 Factors to Look At

Most people will spend the largest percentage of their income on housing. Deciding what kind of housing, and how much can be the most crucial financial decision you’ll make. Choosing between renting or buying can literally be the difference between retiring in the next decade or not.

I am going to cover the largest factors that determine which option is better. In a later post I will outline what my math and research has shown, and which options work best for which situations.

Time-frame

For the vast majority of cases, the rent vs buy scenario comes down to timing. If, for example, you plan on moving in the next few years, renting is almost always better because of the closing costs associated with buying. However as we begin to look at longer time horizons, renting generally becomes more and more expensive, relatively speaking.

Location

In certain locations, like San Fransisco for example, it makes proportionally more sense to rent than it does to buy over shorter periods of time. This is due to the fact that there lies what I call a “Cali Premium” for people who buy real estate in any of the large metropolitan areas along the California coast. Because of this higher pricing, the cost to rent is comparatively lower than most areas of the country.

Discipline

The numbers only make sense if the person doing the renting is investing the difference (assuming there is a difference between renting and owning) consistently. If someone simply rents over buying, the numbers skew back in favor of the homebuyer, who has automatically enrolled in a “forced savings plan.”

The Numbers

The last major factor to look at is the actual numbers and data. These are questions like, what is the interest rate on the loan, what is my rate of return on my investments, how fast does my property increase in value, and how fast does the rent rise year-over-year? These four questions are some of the most impactful when it comes to analyzing the numbers, but there are a host of others to ask as well.

Hopefully these insights are beneficial when making these important decisions. I looking forward to seeing how the actual numbers pan out in real life in the years to come.