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| How to screen properties before buying homes (Before Buying Homes before buying, homes, home, screen, property, real estate, neighborhood) |
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When you (or them) have found propective properties when buying homes, you must screen out any unwanted prospects. Always drive by before you actually make an appointment to see the home. This will save you a lot of time by eliminating any obviously bad neighborhoods or homes. Besides the obvious observation of the home you are thinking of buying, also look at the neighborhood around it. The condition of other homes on the block will tell you a lot about the neighbors. Look at the cars parked in the driveways, are they new and shiny - or rusty junkers? Take note of the parking situation on the block as well, you may want to drive by at different times on different days of the week. Is there sufficient parking, or will you have to park a mile away from your new house and walk it home? The homes immediately next to and around your prospective new home should be scrutinized, are they well maintained and worthy of living next door to? If a home is too delapilated, it is possible that it will be knocked down and rebuilt in the near future - do you want to have to live next to a construction site? And worse, what monstrosity will they build in its place?
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Are there any shopping centers or stores in the immediate vicinity of the home you are buying? This could create traffic and noise problems, as well as parking issues, patrons may block your driveway or hog your parking spaces in front of your home. Train stations and train tracks are the worst possible thing, both in noise and traffic - as well as vibrations. Trains are huge, heavy, and travel around the clock. Even several blocks away the vibration from a passing train will rattle the home you are buying. Commuters tend to drive to train stations and park in its vicinity, this could generate parking headaches during work hours if you are thinking of buying the home. Airports are by far the worst noise makers - even as far as 10 miles away. Be aware of any airports, even small commuter or private airports, in the area when buying homes. Airports often change flight paths of their air traffic, so even if it appears to be quiet when you check out the home to buy near an airport - it is more than likely that at some point airplanes will in fact pass over your new home. You really do not want to be anywhere near an airport.
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You should also walk around the neighborhood, up and down the block, side streets, and especially behind the home you are thinking of buying. Visit at different times, during quiet periods as well as when you would expect it to be a busy time. Do you feel safe walking around, remember you will be living in that neighborhood for a long time should you buy the home. How is the traffic around the area, is it noisy, a racetrack, buses puffing fumes, is it easy and safe to cross the streets? Avoid buying homes on corners or on main roads, just pulling out of your driveway into traffic could be a daily nerve wracking affair. Watch for bus stops, where there is a bus stop there will always be buses - and hordes of bus passengers. Do you want to live next to an incessant line of exhaust emitting buses, and an unending line of bus commuters (most of whom will be tossing their coffee cups and lunch wrappers on your lawn)? Are there any schools or parks or other public places around, that could attract excessive crowds and cars and noise? Is there a police station or firehouse within earshot? Emergency vehicles are very noisy, and they tend to be noisy around the clock as they respond to emergencies. It is good to have emergency services NEAR the home you are buying, just not NEXT to it. (continued to top right) 
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If you have friends or family members that live in the area, or are familiar with the area, you should talk to them before you buy homes there. As local residents, they will know about any safety/crime issues in the area, as well as other important things such as flooding during heavy rains. They will also know about traffic conditions, parking issues, transit (such as bus routes, distance to train tracks, airport, etc). And you will also be able to find out about schools, parks and shopping in the area - after all you are thinking of buying a home and moving into that neighborhood. Most importantly, they may know something about the people who will be living next door to you - especially if that neighbor has a sensational past. The last (but not least) thing to find out about the neighborhood before buying homes - if there is any planned road expansion, highways, or other major development in the area. Road widening could gobble up your new lawn (eminent domain) leaving you with less property than when you buy the home. Road rebuilding or new sewers/water mains will bring years of noise, dirt and grief in the new home you are buying. A new highway or entry/exit ramp on your doorstep will really ruin your remaining days. So be sure to check out the area before buying homes there, life can be full of surprises but at least you can try to eliminate some of the obvious problems before buying the home.
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| Benefits of Buying Homes instead of Renting (Benefits of Buying Homes benefit, buying, home, renting, own, loan, real estate, property) |
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There are several benefits of buying homes, instead of renting. The most obvious is the fact that your monthly rental payments are simply gone - monthly mortgage payments on the other hand, add to the equity in your own home. Rental payments are essentially flushed down the toilet as you have nothing to show for them after the current month (for which you paid the rent) is over. Mortgage payments pay down the principal (that is, part of the loan amount) in addition to the interest that the mortgage bank is charging you. Under current US tax laws (as of 2006-2007), you can write off the entire interest amount from your annual tax liability. Note that ONLY the interest can be used as a deduction (not any part of the principal amount, or other fees, that are included in each mortgage payment). The tax savings from this nifty loophole can add several thousand to your yearly income tax refund! Note however, that in some cases where you own a home-based business, you may be allowed to write off part of any home rental fees too. Usually this is strictly interpreted as the portion of the home that you are using for the home business (not the entire rental amount). When you buy a home, the property immediately becomes an asset - at least the portion of the value of the home that , you know, you have paid for. Normally there is a down payment (10%, 20% or more) - plus over time as you make regular mortgage payments it increases your equity in the home. Property values almost always rise, this results in higher equity for you - as your liability on the mortgage is for the original loan amount (minus your payments). Your credit rating also improves dramatically when you have a home mortgage and you pay the mortgage on time regularly. Creditors see the original loan amount, and the current loan balance - thus they can immediately see the direct cash value that you have in your home. Note that property value increases usually don't reflect in credit scores - however it is likely that a 10 year (or longer) history of timely mortgage payments also takes into account property value increases over the large time period.
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On the other side of the coin, when you own a home you are responsible for all repairs. If you happen to be handy with tools, this may not be too much of a problem. But you have to consider that there will be expenses for materials or new appliances. Most men love to work on their own home, they don their Ralph Lauren toolbelt and watch their Bob Vila videos before spitting on their hands and getting to work. Really, there are some things that are best done by professionals - plumbing and electrical being the two most important (dangerous) items. It often costs more if a plumber (or electrician) has to undo your "repairs" before actually performing the repair. Building a shelf, or patching drywall, or changing a lightbulb is one thing - trying to sweat a hot water line to make it fit your new gold plated faucet is another story altogether! Here is a useful do it yourself blog. Yes, there are many things that the King of the Castle can do by himself. Without much risk of damage to himself or to the thing being repaired. Some home improvement stores offer do it yourself classes - it can be fun and fulfilling, not to mention cost saving. And lest any charges of chauvinism fly, yes, women too are very good with tools and home repairs/improvements!
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If you rent a home, you are at the mercy of the landlord (or owner) of the house or building. As all repairs are paid for by the landlord, you are also at their mercy to get things fixed, such as an overflowing toilet or broken refrigerator. You may not be permitted to make any major changes to the rooms or home, since you do not own it. Landlords often refuse any requests for structural changes such as combining smaller rooms. Some landlords or property owners may even refuse to allow your choice of colors, or they may seize your security deposit if they decree that your color choices have damaged the property. Pets too are something many landlords refuse to allow. Even keeping a goldfish could violate your rental lease contract. Yes, tenants do get evicted for owning a fish - NO PETS means NO PETS, if so stated on the rental agreement. Rental rates can rise annually, there are local laws and regulations that permit landlords to raise rent based on a local index and/or any improvements they make to their property (note that these vary greatly, each town or community has their own rules). Even a simple paint job done by the landlord could raise your rent dramatically. Additionally, should the landlord or property owner decide to sell the property, you could find yourself evicted or at the mercy of another landlord who could be a worse specimen. When family and children are involved, such instability can pose problems. Owning your home gives you peace of mind, not having to worry about getting kicked out whenever the landlord decides so.
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Buying homes when one is young(er) allows one to pay off the mortgage before their retirement age (most mortgages are 30 years). Taking into account property appreciation over three or more decades, you would be sitting on a nice size nest egg for your doddering denture days. If you have children, the home is a nice tax free gift you can leave them when you shuffle off the mortal coil and ascend playing your harp. There are loopholes to avoid probate court and death taxes, such as having the child(ren) name(s) on the property deed. This gives them possession of the property upon your bucket kicking, and if they sell it, (under current tax laws 2006-2007) they will likely only be hit with capital gain taxes on the price of the property on the day you depart (NOT your original purchase price) less the current market price when they do sell. Obviously, seek a good lawyer before making this decision, as well as other things in your will. While on the topic of mortgage payments, here is a little known secret that no bank will ever tell you about. With each monthly mortgage payment, make an additional payment equal to at least the principal amount contained in that payment - apply it against the principal of the loan. This will reduce your mortgage period by HALF, that is, a 30 year mortgage will be paid off in 15 years! As an example, if a monthly mortgage payment is $2000 and consists of $1100 interest + $200 escrow + $700 principal; make an additional $700 principal payment to cut your mortgage period in half. Be careful though, banks will try to be sneaky and apply any extra payments toward the LAST payment (therefore continuing to charge you interest on the paid off portion). Always check monthly statements and fight to have your extra principal payments recorded correctly. If more money is available, such as after a good tax return, you (or anyone else) could apply more money to the principal amount of the loan. It saves you a ton of money over the lifetime of the loan by reducing the interest amount.
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