Right now, there are more people 65 and up in the United States than there have been at any other time in our nation's history. Currently, that figure stands at 15.1 percent. Granted, not all people in their mid-60s are retired. (According to stats from 2017, 19 percent of the 65-plus crowd are still working). Nonetheless, many people who have the chance to retire or who get older and decide it's time to cross items off their bucket list, start taking more vacations -- and many are diving into the investment of purchasing a vacation home. And that can be a very good thing. Taking a vacation has been shown to lower stress, improve your cardiovascular system, and even strengthen your marriage. If you're a retiree in the market for a vacation home, here are some tips and advice to consider.
The Finances
Many of us idealize retirement as a time of globetrotting and time-sharing on beaches as soft as powdered sugar, free of all worries about money. But since 14.5 percent of seniors in the US, who should be basking in retirement, live below the federal poverty line, that story isn’t as realistic as we’d like to think. For the vast majority of us, no matter how old we are, money is still a consideration. Just because you’ve escaped the 9-to-5 daily grind doesn’t mean you shouldn’t ponder these questions when looking for a vacation spot:
Square all this away, and you’ll be able to relax a lot more after you get the papers signed.
Doing Your Research
Now that you’ve got your finances in order, think about your desired area, and then do your research. As with searching for any property, it’s best to scroll through online databases, talk to a trusted realtor, or both. Expect a property’s asking price to fluctuate depending on where it is. Keep in mind that if you don’t have the cash to pay for a vacation home outright, you’ll need to take out a mortgage to get it — and if you’re already a homeowner, that won’t be your only home loan. If you can afford it, great! But if not, don’t be afraid to pull out of that plan. In the long run, you’ll feel far better in retirement if you’re not stressed out.
If you’re using a secondary property as a vacation rental, you might need to think about how to store some of your possessions. If you have heirlooms you want to be secured or anything you want to protect from accidental breakage, consider adding a storage building or garage to your property. Many people go with steel when constructing these buildings, as they are relatively easy to assemble and designed for durability. If you need more information, Armstrong Steel has an informative guide to the world of steel buildings.
Holding Down the Fort
Before you pull the trigger on buying your vacation home, read up on all the hidden costs that you’re likely to encounter. These include tax implications and stricter mortgage terms, as well as the cost of maintaining it when you’re not there. If you buy a condo or a townhouse, your homeowners association fees should cover your expenses in this regard. But if you have a single-family home, you’re on the hook for all repairs, great or small. If you hire a property management company, you’ll probably shell out at least $75 per month (not including repairs). Meanwhile, there’s also homeowner's insurance to consider.
Here are some ways to keep those costs in check:
Buying a vacation home in retirement is an investment, but it’s one that could make this next chapter of your life even more exciting. Know what you can afford, research your ideal area, and make plans for upkeep and maintenance, and you’ll be able to make the most of your new home away from home.
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Are you thinking of renting out your home? In that case, you need to ask these 10 questions to anyone wanting to rent your house:
1. When are you planning to move in?
This is the question that shapes the rest of your engagement with the potential tenant. The answer here will help you determine whether or not the tenant’s timelines synchronize with yours. If, for example, a tenant wants to move in a month from now but you want to rent it out sooner than that, then there is no point in engaging the person any further.
2. Why are you relocating?
If the tenant is moving into your property after falling out with their previous landlord, you need to know what led to the fallout. Was it because of dishonoring their rent obligations? Was it because of neglecting their other tenant responsibilities as per the lease agreement? The answers they give will tell you whether or not to let them rent your property. In the same vein, ask them how long they have lived in the previous apartment and how long they intend to live in yours. If you establish that they have a habit of hopping from one apartment to another within unreasonably short durations, politely decline their application.
3. Have you ever been evicted for any reason?
This question seeks to clarify the #2 question even further. Maybe they weren’t evicted in their immediate former home, but you cannot conclude that they have never been evicted in the past. Ensure that they give you sufficient details about their journey since they started renting.
4. How stable are you financially?
If they are unstable, chances are that they will give you problems with the rent. Experts say that a good tenant is the one whose monthly rent doesn’t exceed 40% of their total monthly earnings. That is to say that if you expect the tenant to pay $1000 in monthly rent, they should be earning at least $2500 per month. And because monthly income isn’t a perfect indicator of financial stability, make a point of running a credit check to determine how much debt the tenant is in. If your new tenant is in the Gig economy, you might want to ask more questions if they are financially stable.
5. How many people will you be living with?
The last thing you want is to rent your house out to an individual, only to realize later that he brought in his extended family and some of his friends to live with him. There is nothing wrong with housing a needy friend or relative, except that more people mean more wear and tear to your property. Besides, overcrowding in homes is listed by most fire departments and health professionals as a major health and safety risk.
6. Do you own any pets or support animals?
If yes, how many do you have? This is important to know if you have a renting policy that doesn’t allow pet ownership. If you have a set monthly/annual deposit for pets or a limit as to how many pets a tenant can have, make it clear to them beforehand.
7. How clean is your criminal record?
As a tenant’s credit history is significant to your property’s financial future, so is their criminal history to your - as well as your other tenants' - security. Don’t underestimate the number of ex-convicts looking for rental homes in the US today. In 2015, a tenant screening by SmartMove showed that at least 22% of all tenants-to-be had a criminal record. Even if you don’t have a problem renting out to an ex-convict, having this information with you is necessary when planning your rental unit's overall security.
8. Are you prepared to pay all moving costs upfront?
Some landlords require tenants to pay a security deposit, one month rent deposit, and first month rent in full upon signing the lease. If you are such a tenant, or if there are other moving costs attached to your house, then let the tenant know beforehand.
9. What kind of a neighbor can you describe yourself as?
A new tenant can be so unruly that they force their neighbors to end their lease earlier than intended. If they like to play loud music or bring home too many friends, you need to know so that you can append a rule within the lease that will keep their unruly behavior in check.
10. Do you have any follow-up questions?
This sounds obvious but it is very important. You need the tenant as much as they need your property, so you will be wrong not to give them the chance to ask you the follow-up questions they could have. This presents you with the opportunity to appeal to the tenant.
If you’re planning to buy a home, it’s critical to understand the relationship between mortgage rates and your purchasing power. Purchasing power is the amount of home you can afford to buy that’s within your financial reach. Mortgage rates directly impact the monthly payment you’ll have on the home you purchase. So, when rates rise, so does the monthly payment you’re able to lock in on your home loan. In a rising-rate environment like we’re in today, that could limit your future purchasing power.
Today, the average 30-year fixed mortgage rate is above 5%, and in the near term, experts say that’ll likely go up in the months ahead. You have the opportunity to get ahead of that increase if you buy now before that impacts your purchasing power.
The chart below can help you understand the general relationship between mortgage rates and a typical monthly mortgage payment within a range of loan amounts. Let’s say your budget allows for a monthly mortgage payment in the $2,100-$2,200 range. The green in the chart indicates a payment within that range, while the red is a payment that exceeds it (see chart below):
As the chart shows, you’re more likely to exceed your target payment range as mortgage rates increase unless you pursue a lower home loan amount. If you’re ready to buy a home, use this as your motivation to purchase now so you can get ahead of rising rates before you have to make the decision to decrease what you borrow in order to stay comfortably within your budget.
It’s critical to keep your budget top of mind as you’re searching for a home. Danielle Hale, Chief Economist at realtor.com, puts it best, advising that buyers should:
“Get preapproved with where rates are today, but also consider what would happen if rates were to go up, say another quarter of a point, . . . Know what that would do to your monthly costs and how comfortable you are with that, so that if rates do move higher, you already know how you need to adjust in response.”
No matter what, the best strategy is to work with your real estate advisor and a trusted lender to create a plan that takes rising mortgage rates into consideration. Together, you can look at your budget based on where rates are today and craft a strategy so you’re ready to adjust as rates change.
Even small increases in mortgage rates can impact your purchasing power. If you’re in the process of buying a home, it’s more important than ever to have a strong plan. Let’s connect so you have a trusted real estate advisor and a lender on your side who can help you strategize to achieve your dream of homeownership this season.
Outdated kitchen. Overrun backyard. Unusable basement space. If you have a home renovation project on the mind, the first thing you have to consider is how you are going to finance it. Here are the most common options to make your dreams become a reality.
Cash. Paying in cash is the most straightforward financing option, just save until you have enough money to cover the expenses. This will help eliminate spending outside your budget; however, it can also extend your timeline.
Mortgage Refinance. If you’ve been making payments on your home for a few years and your interest rate is higher than current market rates, you may be eligible for a mortgage refinance, reducing your payments and freeing up some money.
Cash-Out Refinance. You can tap into your home equity and borrow up to 80 percent of your home’s value to pay off your current mortgage plus take out more cash to cover the renovations. This option is encouraged only when you’re making improvements that will increase the value of your home, as it can add a lot of interest and fees.
Home Equity. Getting a home equity line of credit allows you to borrow money against the value of your home. You receive usually up to 80 percent of your home’s value, minus the amount of your loan.
Retirement Funds. Homeowners can consider pulling money from a 401K or IRA account, even though they aren’t specifically meant to cover a home renovation. This option might incur additional penalties or tax payments, but may be worth it when making improvements that will benefit them financially in the long run.
Inspections are necessary to ensure that there are no health and safety issues and that a home will not need major repairs after close of escrow. Inspections can be done for any one or more of the following items: pest, roof, well, soil, septic tank, and natural hazards. The cost of or payment for the inspections and the cost of any recommended or required repairs is negotiable between you and the seller.
If an inspection report calls out significant damage or any health and safety issues, lenders will require that repairs be made prior to close of escrow, unless a property is purchased “as is.” An “as is” purchase is a purchase offer with no inspection contingencies.
If a purchase is not “as is” and inspections illuminate significant repair needs that you, the buyer, were unaware of at the time of the offer, you can use the inspection report as a reason to back out of the purchase. You can also use inspection reports as a reason to renegotiate the terms of your offer, such as a seller credit for closing costs or a reduced price.
It is very disheartening when the plants in your garden fall prey to disease. The question everyone asks is how exactly this came about. In the event that it spreads out will it destroy all your plants? For a fact, preventing disease when it comes to plants depends on the host, pathogens that attack the plants, and the prevailing environmental conditions. It takes all these factors to bring about disease. In that regard, the simplest way of preventing the occurrence of the disease is knocking out one of these factors.
You cannot consider your plants productive and healthy if they are not planted on the right soil. If the soil is not fertile, loamy or permeable then the plants are at risk of infection. Good healthy soil helps develop strong and productive plants. The choice of using chemical soil treatments has raised lots of debate lately. More industry experts seem to be in favor of using organic soil.
Just because you saw an attractive plant while on vacation and noted down its name, it does not mean it will grow in your garden. Before going planting ensure they match the surrounding areas planting conditions. Narrow your choice on those that adjust well to moisture, dimensions, soil quality, and light. Plants resistant to diseases and pests can save you from disappointment.
Always ensure there is adequate space for planting as it contributes to the plants' health. Every plant has its own unique set of needs. A few tips worth considering is the air circulation room and size of the pot when planting. If you opted for ground cover species, ensure they are grouped together in beds away from public pathways. If you group them accurately, the need for weeding will be minimized alongside the uneconomical water usage. The rows in between should have ample space to allow for maintenance that way fungal attacks are repelled. There are those who plant tomatoes alongside their fresh organic plants or non-hybrid beans - that way they maximize on the space.
You must have a regular watering schedule as it is a must-have requirement for any plants survival. Watering does not mean you have to make them wet. Not all plants demand an equal amount of water. In that regard, do your homework to get the right watering schedule for the particular species. The mornings happen to be the best time for watering plants given the atmosphere is cool and chilled. Unlike noon when the sun is overhead and the place is hot, water loss from evaporation is minimal in the mornings.
Tender flowers thrive in hot climates and can result in occasional heat waves. Water your lawn as recommended by an experienced botanist. Good examples are the canna, agapanthus, petunias, eucomis, dahlias, zinnia, and lots more. Where planting is required to fill the planting holes and drain it out before setting in the plants. Weeds can easily be killed so this is the best chance of getting them out.
If you are planning to drop a dime on high-value plants for your garden landscaping, get an expert opinion on the place you will have them positioned. Surprisingly, some plants thrive when under shade. Also, look at the planting position and ensure its well-drained. If the planting was done in a container ensure there are adequate drainage holes at the bottom of the pot.
If there is too much exposure to sunshine there might be adverse effects on your crops. For instance, potatoes will fill up with starch, beetroots and carrots will ripen. Tomatoes need the sunshine to ripen to perfection. Plums and pears equally respond well to light and warmth. If there is an extended rainy season there is a high chance of the brown rot disease affecting them.
Pests to look out for during the hot weather season are the caterpillars, red spider mites and blackflies. If you have to simply squash by hand. Diseases like potato blight are also affected by the weather.
If you intend to fix some greenhouses in your backyard, beware that they easily overheat so manage the temperature. This can be done by shading or taking out some panels.
About the Author:
Lena is an interior designer at Homes in London, and she loves to be able to help her clients create their dream home because she believes that home isn't just a place, it's a feeling. She is confident that her experiences can help a lot of people so she expresses it through writings. If you need design advice, feel free to reach out to her as she will always be available for those in need. :)
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