Is Renting the Right Option for You

Americans no matter what age or education level believe that buying a home is a good financial decision and more than two-thirds or 68% believe now is a good time to buy a home. Fifty-one percent of renters say that owning a home is one of their highest personal goals. Many believe that housing prices in their neighborhood are more expensive than there were a year ago.

Several issues prevent Americans from becoming homeowners such as: bad credit, little to no savings, student loan debt, other debt, low earnings, illness or experiencing a financial crisis.

There are advantages to renting such as:  

1. No costs associated with maintenance
2. Easier to maintain
3. Reduced financial responsibility
4. Increases your credit score
5. Proves that your are a responsible spender

There are disadvantages to renting such as:

1. No tax benefits
2. No equity
3. No control over rental increases
4. No control over who owns the building or property

If you are considering renting or moving to a new rental consider these 10 tips to help make the process easier.

1. Review. Review your credit report and credit score before signing a lease. If you have bad credit you may have to put down a larger security deposit or other upfront fees.
2. Energy Costs. Energy costs are higher when renting a home especially for older, concrete or brick homes where air escapes easier.
3. Insure. You should obtain renter’s insurance to ensure all of your items are protected. Your premium may be a little higher if renting a home but you should be able to get a policy for less than $500 a year. Try to purchase a policy from the same company as your car insurance policy.
4. Fees. You may have to pay additional fees if renting a home that is part of a homeowner’s association such as: parking spaces or storage, snow removal, garbage collection, and pets.
5. Don’t assume. Don’t assume the landlord will pay for utilities or whenever something is broken. Ensure the details of who is responsible for what are identified in the lease.
6. Ask. Ask the landlord to provide any verbal agreements in writing.
7. Privacy. Ask about privacy rights.
8. Safety. Use police department search tools to verify if the neighborhood is safe.
9. Budget. Create a housing budget to cover additional expenses such as: security alarm, utility costs, possible repair costs, additional fees, etc.
10. Furnish. Don’t go overboard or furnishings. Look for bargains to furnish your rental.

You Can Still Rent - Here's How

                                                                  

According to the 2013 National Housing Pulse Survey eight in ten Americans no matter what age or education level believe that buying a home is a good financial decision and more than two-thirds or 68% believe now is a good time to buy a home. Fifty-one percent of renters say that owning a home is one of their highest personal goals. Many believe that housing prices in their neighborhood are more expensive than there were a year ago.

Several issues prevent Americans from becoming homeowners such as:   bad credit, little to no savings, student loan debt, other debt, low earnings, illness or experiencing a financial crisis. There are advantages to renting such as:  

1. No costs associated with maintenance
2. Easier to maintain
3. Reduced financial responsibility
4. Increases your credit score
5. Proves that your are a responsible spender

There are disadvantages to renting such as:

1. No tax benefits
2. No equity
3. No control over rental increases
4. No control over who owns the building or property

If you are considering renting or moving to a new rental consider these 10 tips to help make the process easier.

1. Review. Review your credit report and credit score before signing a lease. If you have bad credit you may have to put down a larger security deposit or other upfront fees.
2. Energy Costs. Energy costs are higher when renting a home especially for older, concrete or brick homes where air escapes easier.
3. Insure. You should obtain renter’s insurance to ensure all of your items are protected. Your premium may be a little higher if renting a home but you should be able to get a policy for less than $500 a year. Try to purchase a policy from the same company as your car insurance policy.
4. Fees. You may have to pay additional fees if renting a home that is part of a homeowner’s association such as: parking spaces or storage, snow removal, garbage collection, and pets.
5. Don’t assume. Don’t assume the landlord will pay for utilities or whenever something is broken. Ensure the details of who is responsible for what are identified in the lease.
6. Ask. Ask the landlord to provide any verbal agreements in writing.
7. Privacy. Ask about privacy rights.
8. Safety. Use police department search tools to verify if the neighborhood is safe.
9. Budget. Create a housing budget to cover additional expenses such as: security alarm, utility costs, possible repair costs, additional fees, etc.
10. Furnish. Don’t go overboard or furnishings. Look for bargains to furnish your rental.

8 Credit Tips for Renters

According to Zillow, since May 2011 rents rose 14% in San Francisco and rose 11% San Jose, California. Last year in Minneapolis, rents rose 11% even though home values dropped 8%.  According to John Burns Real Estate Consulting, it is now cheaper to buy a home than it is to rent in virtually every major city in the United States.

Unfortunately, many renters still have bad credit from the effects of the 2008 recession and are still struggling to make ends meet.  Lenders are getting stricter with requirements for mortgage approvals leaving some renters paying higher rent than some homeowners pay for a mortgage.  Landlords generally use three main factors when approving renters: credit score, income and employment history.  If you are a renter and looking to become a homeowner, here are 8 tips to help increase your credit score:

1. Know before you show. Get a copy of your credit report. Verify all information and look for errors.
2. Fix any errors. Dispute online or in writing.
3. Pay down debt. Pay late accounts first such as:  collection accounts, judgments, liens and repossessions.
4. Cut back. Stop spending and pay with cash.
5. Stay still. Don’t open any new accounts.
6. Pay more. Put down a large security deposit.  Be willing to pay 2 months’ rent upfront.
7. Automate. Agree to setup automatic monthly payments.
8. Provide evidence. Show your previous payment history.  Print out payment receipts for rent for the last two years.

 Provide references.  Bring references from your landlord; character references from your pastor, friends, and supervisor; bring your resume, awards you’ve won, community service activities, career plan (mapped out with your supervisor).  

Remember, there is always someone with a higher credit score, that makes more money and has a better profile than you. Be honest about your financial situation and your credit.  The company does know you; just your credit score and you are a risk until you can prove otherwise.

Should You Lease

Some businesses are losing sales and are considering filing for bankruptcy or dissolving their business due to the recession. However, many businesses are thriving with increased sales and taking advantage of consumers needs. One such example is companies that provide rent-to-own merchandise.

Many of these companies are doing more advertisements to attract customers. Aaron's has 1,575 stores and had 1st Quarter 2009 sales of 474 million. Rent-A-Center also known as Rentway had 1st Quarter 2009 sales of 728.2 million. Just think if half of those customers changed their lifestyle and their spending habits and paid down their debt which helps to increase your credit score, that money could be used to start a savings account, start a retirement account, purchase a home or more importantly buy items with cash. Instead of going to a rent-a-center store to buy a tv you could go to Best Buy, comparison shop online at Amazon.com or go to a thrift store to get a good deal.

Many rent-a-center stores know how to find their customers and customize advertisements to attract the customers they are looking for. Managers sometimes attend local events with customers to help them determine if a customer has lost their jobs. Some stores also ask for references to determine if the customer will make their monthly payments. Some managers attend their customer's churches, get to know their customer's backgrounds, talk to their employers or ask about their financial status. All of this information is used to help make a sale and ensure that customers can continue to make their monthly payments.

Purchasing items from rent-a-center store can cost you 2 to 3 times the original cost of the item and in some cases the items are used or could be damaged. You can prevent all of this by only buying items that you can afford. Here are 5 ways to help find the best deal without having to lease a purchase.

1. Research. Do research on the item you wish to purchase. If you are looking for a tv, look for customer reviews or ask family or friends what brand they purchased and if they are happy with their purchase. Use that information to help find a brand the meets your requirements so you are able to make a wise purchase based on quality not merely on price.

2. Compare. Do comparison shopping at different stores – thrift stores, outlet stores, discounts stores or online. Spend at least 20 minutes comparison shopping. For every 5-10 minutes spent comparison shopping you save $1-$9. You can also buy used items to save money.

3. Buy Later. If you see something you want to buy but don't have the cash or have bad credit, save your money and then go purchase the item. If you absolutely have to have the item when you see it wait a few days, then go back to the store. See if the item is marked down or ask a sales clerk when the item will go on sale. Then compare that price with other stores to get the best deal.

4. Use competitors. Go to a store and comparison shop. Then go to a competitor store and tell them you found a cheaper price at their competitors store and ask them to match that price or offer a lower price. Some stores do this such as the Room Store, Target, Wal-Mart, etc. See which store gives you the best deal.

5. Needs vs. wants. You should buy more needs instead of wants. There should be a balance, if you are buying more items that you want then reevaluate your spending habits. Only buy items that you can pay cash for or that are within your budget. That designer purse or designer pair of jeans is not a need. The only 3 basic needs are food, clothing and shelter, and I'm adding a 4th - one prescriptions.

Used is the new "new" and "new" is the new "old".